What Is A Bitcoin ATM?
A Bitcoin ATM is a kiosk connected to the internet that allows users to buy, sell, and transfer Bitcoin or other cryptocurrencies.
Bitcoin ATMs are physical kiosks that allow cryptocurrency users to exchange fiat currencies such as the US dollar for its equivalent in Bitcoin or other altcoins. Typically, Bitcoin ATMs look similar to traditional banking ATMs, and you may find them in public places such as coffee shops, shopping malls, gas stations, etc.
Bitcoin ATMs allow people to purchase Bitcoin and other cryptocurrencies using cash or credit/debit card. There are mainly two types of Bitcoin ATMs:
Unidirectional Bitcoin ATM: With a unidirectional machine, users can only buy Bitcoin and other cryptocurrencies. It is the most common type of Bitcoin ATM operated across various locations.
Bi-directional Bitcoin ATM: With a bidirectional machine, not only can users buy Bitcoin and other altcoins, but they can also sell them for fiat.
Bitcoin ATMs are similar to conventional banking ATMs in some ways. For instance, they allow users to complete cryptocurrency transactions such as buying, selling, and transferring. However, they differ from conventional banking ATMs in the way that they operate. For instance, they do not connect to a user’s bank account; instead, they connect to their crypto wallet or an exchange platform.
Executing transactions on a Bitcoin ATM is relatively straightforward, unlike most crypto exchanges. That is why it appeals to many people, especially beginners. To use the machine, a user needs to scan the QR code of their bitcoin wallet address. If the user does not have an existing wallet address, they can generate a new one on the machine within seconds. Usually, Bitcoin ATM users pay a service fee for every transaction they perform on the device, and the price is often a percentage of the transaction rather than a fixed amount.
Depending on the jurisdiction, there are limits to the amount of money a person can spend when using a Bitcoin ATM. Machine operators set it according to the applicable AML/KYC standards and comply with the financial laws in the jurisdiction. For instance, in the United States, an operator must register with the Financial Crimes Enforcement Network (FinCEN) and comply with the Bank Secrecy Act (BSA).
Bitcoin ATM Example
Coinme is the first licensed Bitcoin ATM company in the United States and operates in over 8,500 locations in 48 states. Customers need to have a wallet and pass the KYC requirements before they can use the systems. Typically, Coinme Bitcoin ATMs offer both buying and selling options.« Back to Glossary Index