Did you know the Bitcoin ATM existed? Or do you know how to use a Bitcoin ATM? If your answer is no, then you are in the right place. In this cryptocurrency review, we will give you all the information that you will ever need to know about Bitcoin, what Bitcoin ATM is, and how it works.
You will also learn how to sell and buy Bitcoins using a Bitcoin ATM and how you can locate a Bitcoin ATM in your nearest location. XTRgate will help you to buy bitcoin.
Bitcoin ATM: A Detailed Guide
This guide will explain everything about Bitcoin, its uses, and how you can use it.
Bitcoin ATM Definition
Bitcoin ATM is an Internet-based and web-connected kiosk. It allows Bitcoin consumers to purchase Bitcoins cryptocurrency with their deposited cash. However, do not mistake a Bitcoin ATM to the regular ATMs you see at banks and financial institutions.
A Bitcoin ATM allows its user some privacy via some level of anonymity in comparison to traditional ATMs. These machines are also known as BTMs that you can use to deposit cash and dispense your Bitcoins in return. However, some BTMs do accept your Bitcoins and offer you cash withdrawals.
As Bitcoin ATM offers anonymity to its users, it also implements stringent limitations of buying Bitcoins, with some even imposing requirements such as the KYC process.
However, privacy does not come cheap or free. Bitcoin ATMs generally charge you anything between 7 percent to 10 percent for selling and buying Bitcoins; some cryptocurrency reviews may say that it is the fee worth paying for.
Some Bitcoins even offer bi-directional functionalities, so you can purchase Bitcoins and even sell Bitcoins for cash. In any case, Bitcoin ATM providers only allow a user with an existing Bitcoin account to carry a transaction on their ATMs.
Types of Bitcoin ATM
There are basically two types of Bitcoin ATM, which are cash Kiosk and BTMs. Both of these machines operate and stay connected to the Internet to allow consumers to buy and sell Bitcoins, using cash, debit, or credit card as a method of payment.
Once you make a purchase, these machines will give you a confirmation via a paper receipt, or it will move your deposited money on a blockchain to a public key. Bitcoin cash kiosk resembles a bank ATM, but it does not connect to your bank account whatsoever. Instead, it will directly connect you to a Bitcoin exchange.
Consumer Financial Protection Bureau issued an advisory that stated they might start charging high fees for transactions. Some of the media reports describe these transaction fees to be as high as 7 Percent with exchange rates with $50 over the rates you can buy from anywhere else than these BTMs, cash kiosks, etc.
A Quick History of BTMS
A Robocoin ATM was inaugurated in downtown Vancouver Canada in a Waves coffee shop in October 2013. This ATM is coined as probably the very first Bitcoin ATM in the world that was made available to the general public. However, it ceased its operations in January 2016.
The first-ever Bitcoin ATM was launched in the United States back in February 2014. This time the venue was a cigar bar in the locale of Albuquerque, New Mexico, and even it was short-lived and was removed within 30 days of its installation.
In 2014, Coinme was the very first Bitcoin ATMs providers with a legitimate money transmitting license. They installed a BTM unit in the area of Belltown in Seattle, Washington. However, Europe did not stay behind in following the footstep. The very first Bitcoin ATM in Europe was installed back in December 2013 in the vicinity of Bratislava in Slovakia.
Bitcoin ATMs in the United States
You will be surprised to know that there were over 2300 Bitcoin ATMs available within the United States by January 2018, and these are the stats by Coin ATM Radar. Do you know that small shop owners are earning over $300 a month to rent out spaces for these Bitcoin ATMs?
The Bitcoin ATMs’ transaction fee within the US is 16 percent approximately. Whereas, online transaction fee to buy and sell Bitcoin runs at 7.5 percent approximately.
The parts of BTMs or Bitcoin ATMs operating within the United States are imported from different parts of the world. For example, General Bytes, which is a cryptocurrency or Bitcoin ATM service provider from Prague, Czech, has placed their BTMS in Las Vegas, Nevada. You will find similar types of Bitcoin ATMs in other major cities nationwide.
Next time you go out, see if you can spot one in your locale.
Bitcoin ATMs in Canada
Do you know that Bitcoin ATMs are not under regulation in Canada as of yet? However, recommendations have been officially proposed for the regulation of Bitcoin ATMs for all Canadian Bitcoin exchangers.
Back in 2014, one of the Canadian finance ministers mentioned the Canadian government’s plans to introduce anti-terrorist financial regulations and anti-money laundering laws for cryptocurrencies, including Bitcoin.
In 2018, the Department of Finance in Canada circulated a draft that stated proposed regulations to handle cryptocurrencies legally. However, there are still no further developments in this arena.
A Complete Breakup of a Bitcoin ATM
During the whole course of financial history, it was not till the recent times we live in that a consumer or individual can make a deposit or get cash anywhere they want, other than their bank account. A traditional Automated Teller Machine or ATM was first introduced to the public in the 1970s.
It is now such a common thing to see around that you can see an ATM almost in most nearby places, markets, superstores, banks, and post offices, etc.
We all know that the evolution of technology and mobile devices and applications has caused the demand for ATMs and their traditional features to drop. However, the ATM has found itself in an arena that is driven by the ever-increasing popularity and trend of cryptocurrencies such as Bitcoin.
This BTM or Bitcoin ATM allows all cryptocurrency users to purchase and sell their Bitcoins. However, using the abbreviation of “ATM” can be misleading because, as you know by now, it does function anything like your mundane ATMs. These are just internet-connected machines that look like traditional ATMs, and that is all the commonality these Bitcoin ATMs share with the former.
The kiosk of BTM will connect the cryptocurrency consumer to an exchange where transactions for Bitcoin take place. Whatever transaction you make, its record will be provided to you by the kiosk as a paper receipt. However, you can choose for the Bitcoin ATM to either issue you a paper receipt like a standard ATM or let the record be saved in the digital domain.
Again, while Bitcoin ATMs resemble an ATM, they will not be dispensing out any notes or cash of any kind. Also, depending on who your Bitcoin ATM service provider is. You may be asked to connect to the exchange using your e-wallet to be able to make a transaction successfully.
It is highly unlikely that any of the Bitcoin ATMs are ever operated by a traditional bank or any of the financial institutions. Neither do they connect the users to their bank accounts? Customers only use these ATMs to deposit their cash so they can purchase Bitcoins and use these Bitcoins to purchase cryptocurrency.
Now the chances are, upper cash deposit limit will be lower than the price value of a single Bitcoin token. It means consumers will only be able to buy a fraction of a Bitcoin. After a successful transaction is completed, a digital record of this Bitcoin transaction will appear in a consumer’s e-wallet; however, it may take quite a few minutes for this process to happen.
Bitcoin ATMs Security Checks
There are some Bitcoin ATMs that require cryptocurrency reviews to successfully go through certain security checks before they can make successful transactions. It may include the customers to verify their identity via the two-factor identification feature.
This two-factor authentication will require a consumer to enter two valid pieces of information to verify that they are who they claim to be. These two pieces of information may ask the consumer to enter their registered phone number into the Bitcoin ATM.
The BTM service provider will send a verification code to the consumer’s phone, which the consumer will need to enter into the Bitcoin ATM. The Bitcoin cash kiosk may also require the consumer to scan their legitimate and valid government-issued identification card, such as their driver’s license.
In our cryptocurrency review, Bitcoin ATMs are still not a widely available facility. You will find a Bitcoin ATM/kiosk in a few of the chosen major cities around the world. Bitcoin ATMs are probably going to be regulated, owned, and operated by private companies that are focused and enthusiastic about the cryptocurrency industry.
In rare instances, a Bitcoin ATM may be offered or operated by the companies with their own e-wallet and trading platform. In this case, these companies will require the consumers to open up an account with them to carry out transactions using their platform, e-wallet, and Bitcoin ATMs. It is precisely like opening up a bank account with a bank to use their ATMs, vaults, and using credit and debit cards for transactions.
We would like to reiterate here again that you must remember that consumers are charged with a service fee for using a Bitcoin ATM. This fee is not a fixed dollar value, which is charged by traditional ATMs. Bitcoin Service is a percentage value of each transaction.
The United States Consumer Financial Protection Bureau (CFPB) have already expressed their concerns to the consumers that this transaction fee may be too high, and customers will be better off getting better and more competitive exchange rates from somewhere else than a Bitcoin ATM.
Best Bitcoin ATMs in the World
Here is a list of some of the world’s leading Bitcoin ATM Machines.
- General Bytes
- Genesis Coin
- Genesis 1
- Satoshi 1
- Finney 3
- Sintra Forte
- Douro II
10 Bitcoin ATM Manufacturers in the World
The list of all the Bitcoin ATM manufacturers is as follows:
- Genesis Coin
- General Bytes
- Digital Mint
Where Can You Find a Bitcoin ATM?
You can find the complete list of all the Bitcoin ATMs in the world by using services such as CoinATMRadar. Just go this link, enter your location and it will tell you all the nearest Bitcoin ATMs in your locale.
This map also allows consumers to see other cryptocurrencies’ ATMs too. Each of these ATMs will charge you a certain amount of commission from your transaction. The commission rates may vary from one ATM to another. Make sure to check the transaction fee or commission; they are usually stated on each Bitcoin ATM.
US Regulations to Operate Bitcoin ATMs
There are four major regulations for a company to operate a Bitcoin ATM, and they are:
- Research requirements to transmit money in the state you wish to operate.
- Register your business with FinCEN as Money Services businesses or MSB.
- Implement a foolproof anti-money laundering (AML) policy
- Test your Anti-money laundering program for proper security.
Cryptocurrency review of Bitcoin ATM
Bitcoin ATMs are one of the most convenient ways to purchase and sell your Bitcoins. However, you have to safe as it is a relatively new and less common practice as far as the traditional financial system is concerned. Therefore, it would be wiser if you can video record your whole transaction using a smartphone. It would work as proof if anything went wrong.