• Crypto Lists
  • Bitcoin
  • Blockchain
  • Cryptocurrency
  • Altcoin
  • Advertise With Us
  • Join our Telegram Community
Newsletter
ItsBlockchain
  • Blockchain
  • Bitcoin
    crypto traders 2021

    Top 5 Crypto traders to follow on Twitter in 2021

    featured image

    Everything you need to know about Bitcoin IRA

    featured image

    How Bitcoin can be hacked?

    featured

    A starter guide to Bitcoin Options trading

    Featured Image

    With Bitcoin Mining Capitulation Coming to an End, Will Halving Pump Begin?

    featured image

    Technical Indicators suggests Bitcoin can crash to 7000$ in next few days

    featured image

    Why is Bitcoin a safe haven in a financial crisis

    featured image

    How to Make Money in Crypto When It Falls

    featured image

    Despite Resurrection of Old Bitcoiners, HODL Waves Indicate Bullish Accumulation

    Trending Tags

    • Altcoin
    • Crypto Lists
    • News
      bitcoin laser eyes

      Bitcoin Laser Eyes, What is it all about?

      Bitcoin Market’s Sentiments turned bullish after USA President’s recent press conference

      Bitcoin Market’s Sentiments turned bullish after USA President’s recent press conference

      featured image

      Breaking : Crypto Trading is now legal in South Korea

      RBI to allow crypto trading

      Supreme court of India decided to lift off RBI Banking BAN against Bitcoin

      featured image

      Steemit Joining TRON Ecosystem

      Reliance Jiocoin

      Reliance Jio is preparing for Jio Coin launch in 2020

      A $134 Million real estate has sold on ethereum blockchain

      A $134 Million real estate has sold on ethereum blockchain

      Hacking attacks on cryptocurrency exchanges

      Hacking Attacks on Cryptocurrency Exchanges are rising, Why?

      Bithumb Launches in India

      Bithumb Global Launches in India

    • Crypto Market
    • Guide
    • DEFI
    No Result
    View All Result
    • Blockchain
    • Bitcoin
      crypto traders 2021

      Top 5 Crypto traders to follow on Twitter in 2021

      featured image

      Everything you need to know about Bitcoin IRA

      featured image

      How Bitcoin can be hacked?

      featured

      A starter guide to Bitcoin Options trading

      Featured Image

      With Bitcoin Mining Capitulation Coming to an End, Will Halving Pump Begin?

      featured image

      Technical Indicators suggests Bitcoin can crash to 7000$ in next few days

      featured image

      Why is Bitcoin a safe haven in a financial crisis

      featured image

      How to Make Money in Crypto When It Falls

      featured image

      Despite Resurrection of Old Bitcoiners, HODL Waves Indicate Bullish Accumulation

      Trending Tags

      • Altcoin
      • Crypto Lists
      • News
        bitcoin laser eyes

        Bitcoin Laser Eyes, What is it all about?

        Bitcoin Market’s Sentiments turned bullish after USA President’s recent press conference

        Bitcoin Market’s Sentiments turned bullish after USA President’s recent press conference

        featured image

        Breaking : Crypto Trading is now legal in South Korea

        RBI to allow crypto trading

        Supreme court of India decided to lift off RBI Banking BAN against Bitcoin

        featured image

        Steemit Joining TRON Ecosystem

        Reliance Jiocoin

        Reliance Jio is preparing for Jio Coin launch in 2020

        A $134 Million real estate has sold on ethereum blockchain

        A $134 Million real estate has sold on ethereum blockchain

        Hacking attacks on cryptocurrency exchanges

        Hacking Attacks on Cryptocurrency Exchanges are rising, Why?

        Bithumb Launches in India

        Bithumb Global Launches in India

      • Crypto Market
      • Guide
      • DEFI
      No Result
      View All Result
      ItsBlockchain
      No Result
      View All Result
      Home Guide

      Bitcoin ATM: Everything you Need to Know About Them

      Nivesh Rustgi by Nivesh Rustgi
      March 7, 2020
      in Guide
      0 0
      0
      featured image
      27
      SHARES
      398
      VIEWS
      Share on FacebookShare on Twitter

      A Bitcoin ATM is a kiosk or a physical access point that enables buying or selling of Bitcoins using physical cash.

      Instead of interacting with the centralized servers of banks, the ATM service providers enable buy/sell of specific cryptocurrencies, which can be used as a medium of exchange globally. Apart from Bitcoin, there are ‘cryptocurrency ATMs’,which provide cash-based transactions for other cryptocurrencies like Litecoin [LTC] and Ethereum [ETH].

      Moreover, there are some teller machines which allow for purchase via debit cards as well. There is usually a percentage charge involved in the process which varies from 3-10% globally.

      Buying Bitcoins

      The ATM either generates a new offline wallet (paper wallet) with the purchase, or funds are transferred to a user specified wallet.

      Best Bitcoin Wallets

      The service providers more often than not need to comply with KYC/AML rules on these ATMs. Therefore, along with physical cash, it also requires a document for identity proof. The machines come with an optional scanner which performs the verification process, and scans QR codes as well.

      After the verification process is complete, the user can buy Bitcoins using cash bills. Nevertheless, there is usually a daily limit to the buying amount using an ATM. It varies between $3,000-$10,000 depending on the service provider, and levels of verification cleared by each customer. 

      Selling Bitcoins

      Entering the full Bitcoin private key can be a cumbersome process, and also creates a security risk. Moreover, transferring funds using one’s mobile or hardware wallet to the ATM address can create various disputes. Hence, selling Bitcoins using the ATMs can be tricky.

      What is Bitcoin Private Key

      Therefore, the basic operation of Bitcoin ATMs usually allow buying of Bitcoins only.

      The ‘selling’ process usually requires registration with the service providers of the ATM. KYC and AML verification along with regulatory adherence is mandatory. Moreover, the wallet on the service provider’s account can be used to sell Bitcoin without any hassle. However, in this case it is required to trust a third party with your private keys. 

      Bitcoin ATM History

      Canada is credited for installing the first ever Bitcoin ATM on 29th October 2013. Nevertheless, there was an attempt to launch an ATM in the US earlier that year. A cigar bar in Albuquerque, New Mexico opened the unit in February. However, it was shut down in the next 30 days due to lack of regulatory compliance.

      The initial idea of Bitcoin ATMs included the anonymity feature providing for direct purchase with cash. However, it opens up opportunities for converting and sending unaccounted wealth world-wide, which can be a challenge for authorities.

      Eventually, in April 2014, the first ever regulatory complaint ATM was launched in the US in Seattle, Washington. Operating an ATM requires a money transmitter’s license and the provider must comply with other specific regulations in the country as well.

      However, in India no progress has been made, the founders of Unocoin attempted to bypass the ban by the country’s central bank in providing banking services to firms engaging in virtual currency by the ATM. It was seized within weeks of installation and the founders were arrested by the police as well.

      Bitcoin ATMs Around the World

      According to Coinatmradar, the total number of ATMs in the world is just short of one short of 7000 at press time – 6999.

      You can find ATM nearby on Coinatmradar.

      Beginning in 2013, it took around 4 years for the number to reach a 1000 in February 2017. Nevertheless, it has increased 7 seven fold in the following years; growing at a rate of 166 new units every month.

      Number of Bitcoin ATM units world-wide since Feb 2017 (Source)

      Furthermore, the US is currently leading the race for the total number of ATM units around the world. Out of 6997 ATM units, more than 5000 units are in the US alone (> 70%). Whereas, Europe hosts around 831 ATM units and the United Kingdom has around 303 ATM locations in the country. 

      Canada, which installed the first ever Bitcoin ATM, currently has over 750 ATM units. In the east, Hong-Kong and Russia have both more than 50 ATM units. There are other small scattered units in China, Australia, Japan and South Korea as well.

      A large number of manufactures and service providers have also entered the space.

      Regulations 

      Bitcoin ATM access points record the transactions directly onto the public ledger; Hence, no custody or banking license is involved per se. However, like Western Union and MoneyGram they must adhere to the compliance under Money Transmitter Business (MSB).

      Currently, the FinCEN (Financial Crimes Enforcement Network) and Office of Foreign Assets Control (OFAC) in the US oversee the law and regulations related to Bitcoin ATM. 

      Like Venmo and Western Union, the Bitcoin ATM providers must comply with “Non-bank money transmitter” rules under state and federal law as well. According to them, since Bitcoin/crypto ATM provides an exchange of FIAT to cryptocurrencies or vice versa, it comes under Money Service Business (MSB).

      There is still considerable ambiguity on the classification of specific cryptocurrency as a security or a commodity. Hence, in the US the CFTC and SEC do not currently restrict some crypto ATM. 

      Nevertheless, the SEC oversees the activities related to investment assets. Hence, while there are no specific licenses to be procured from them, the SEC FinHub must be notified of the operations. 

      The FAFT (Financial Action Task Force) is the international organization that draws out guidelines and rules for the 39 member countries, including the US and European countries. 

      Manufacturers and Service Providers

      To set up an ATM, the business owner must contact both the manufacturers and service providers to enable the service.

      Genesis Coin and General Bytes are two leading firms that perform manufacturing of the units. These firms have offices primarily in the US and Europe. Lamassu and Coinsource have also been recognized as reliable sources for ATM units. 

      Nevertheless, the electronic city of Shenzhen plays a role in providing for the basic unit, which are later customized by the manufacturers. 

      The price of each ATM unit varies between $3500 – $10,000 per unit. The older and cheaper models are usually unidirectional i.e. provides for buying only. The price also varies in relation to the size and other added functionalities. 

      crypto atm
      Bitcoin Manufacturer’s Share Pie Chart

      Apart from the importance of actual manufacturers of the machine, it’s the service operator that acts as the ‘exchange‘.

      Usually, the banks install ATM machines’ which enable interaction with centralized servers world-wide using an electronic chip card.

      crypto atm manufacturer and operator
      Crypto ATM Service Providers

      Similarly, the ATM operators provide a link to the decentralized Blockchain Networks. They charge a certain percentage over the price of Bitcoins for providing digital assistance. In some two-way ATM, the operators also manage temporary or long-term custody of the coins or share the private keys of their users.

      Pros and Cons of Using a Bitcoin ATM 

      The global adoption and awareness of Bitcoin and cryptocurrency is still below 5%, optimistically. Moreover, even now these are primarily used as an investment asset, rather than a medium of exchange. Hence, there is seldom an immediate need to buy Bitcoins using an ATM, an online exchange can be used for considerably cheaper.  

      Furthermore, less than 50% of the ATM units currently allow selling of Bitcoins, which in-turn requires registration with specific service providers. Hence, the actual use of the ATM is highly limited. 

      Using and operating an ATM can be expensive for both the customer, and service providers. 

      Nevertheless, there are various benefits of the ATM for the community. It provides for, 

      • Ease of Use: in obtaining cash, which would otherwise require an intermediary step of transferring FIAT to a bank account. In theory, Bitcoin ATMs eliminate the use of banks. 
      • Increasing Adoption: The presence of Bitcoin ATM units around the world help in increasing the adoption of Bitcoin for first time users. The units are now installed at airports, malls and so on establishing the cryptocurrency brand.
         
      • Remittance: In small amounts, the ATM units can act as a convenient medium for sending money across borders. The growing adoption of cryptocurrency in Latin America, Africa and other third world countries can enable low cost/hassle free remittance via these units. 

      Final Verdict 

      The rate of increase in adoption and price of Bitcoin could eventually reduce the cost of operating and manufacturing units due to economies of scale. Moreover, the innovation of Bitcoin ATM alone in the past couple of years suggests that growth is prevalent. 

      Currently, VISA and Mastercard along with the banks dominate the money transmission business. According to popular estimates, there are more than 3 million ‘traditional ATMs’ in the world. Nevertheless, in their cross border use these usually require a lot of clearances and permissions.

      In theory, with Bitcoin and other cryptocurrencies as a global medium of transfer the ATMs would increase globalization, tourism and even help in the development of trade and commerce without any restrictions. 

      IBC-Transparent-Logo-(1)

      Subscribe To Our Newsletter

      Join our mailing list to receive Cryptocurrency investing and trading recommendations to your mailbox.

      You have Successfully Subscribed!

      Tags: bitcoin atmfeatured
      Share27TweetPin

      Subscribe to get notified on latest posts.

      Unsubscribe

      Related Posts

      Handle crypto Trading Losses

      How to Handle Trading Losses

      by Ramaa Mohan
      February 21, 2021
      0

      Let's talk about how to handle trading losses. The cryptocurrency market, like any other market in the world, is volatile....

      featured image

      Different types of cryptocurrency you should know about

      by Nivesh Rustgi
      February 15, 2021
      0

      In this article, we will discuss different types of cryptocurrency which you should know about. A crypto-currency is a digital...

      featured image

      Everything you need to know about Bitcoin IRA

      by Nivesh Rustgi
      February 12, 2021
      0

      In this article, We will discuss Bitcoin IRAs, Laws and regulations, Service providers and future of bitcoin IRAs. The tax...

      featured image

      How to margin trade bitcoin and altcoins successfully

      by Hitesh Malviya
      February 7, 2021
      0

      In this article, we will discuss everything you need to know about Altcoins & Bitcoin Margin Trading from the definition,...

      featured

      A starter guide to Bitcoin Options trading

      by Nivesh Rustgi
      February 3, 2021
      0

      In this Guide, we will cover Bitcoin options trading, options trading platforms and how to trade bitcoin options on deribit....

      Load More

      About Us

      We share important articles on blockchain technology here. Our mission is to spread the awareness about blockchain technology to masses through content.

      • Trending
      • Comments
      • Latest
      Top 10 Cheap Cryptocurrencies with Huge Potential in 2021 | Best Penny Crypto Coins

      Top 10 Cheap Cryptocurrencies with Huge Potential in 2021 | Best Penny Crypto Coins

      February 22, 2021
      Top 10 Altcoins to buy on Uniswap – Part 1

      Top 10 Altcoins to buy on Uniswap – Part 1

      February 21, 2021
      non fungible token

      Non-fungible Token(NFT): The Next Big Thing in Crypto Market

      February 18, 2021
      crypto traders 2021

      Top 5 Crypto traders to follow on Twitter in 2021

      February 19, 2021
      TOP TEN altcoins to buy in february 2021

      Top Ten Altcoins You Should Buy in February 2021 – Part 2

      February 9, 2021
      featured image

      Top 10 Low market cap altcoins to invest in 2021

      February 24, 2021
      bitcoin laser eyes

      Bitcoin Laser Eyes, What is it all about?

      February 20, 2021
      A simple guide to understanding FTX Bull and Bear tokens

      A simple guide to understanding FTX Bull and Bear tokens

      February 24, 2021
      featured image

      Top 10 Low market cap altcoins to invest in 2021

      February 24, 2021
      featured image

      Top 10 Blockchain companies in the world

      February 22, 2021
      Handle crypto Trading Losses

      How to Handle Trading Losses

      February 21, 2021
      bitcoin laser eyes

      Bitcoin Laser Eyes, What is it all about?

      February 20, 2021
      Cofounders of Ethereum : The mystery revealed now

      Cofounders of Ethereum : The mystery revealed now

      February 20, 2021
      Top 10 Altcoins to buy on Uniswap – Part 1

      Top 10 Altcoins to buy on Uniswap – Part 1

      February 21, 2021
      • Top 10 Cheap Cryptocurrencies with Huge Potential in 2021 | Best Penny Crypto Coins

        Top 10 Cheap Cryptocurrencies with Huge Potential in 2021 | Best Penny Crypto Coins

        0 shares
        Share 0 Tweet 0
      • Top Ten Altcoins You Should Buy in February 2021 – Part 1

        0 shares
        Share 0 Tweet 0
      • Top Ten Altcoins You Should Buy in February 2021 – Part 2

        0 shares
        Share 0 Tweet 0
      • List of leading partners of Ripple, and How they use XRP?

        137 shares
        Share 137 Tweet 0
      • List of ChainLink Partnerships which skyrocketed the growth of LINK cryptocurrency

        55 shares
        Share 55 Tweet 0

      cointraffic

      ItsBlockchain

      We are India’s first and oldest Blockchain & Cryptocurrency publication platform started in 2016. We are a one-stop destination for technical analysis, cryptocurrency recommendations, and Blockchain technology resources.

      Buying Guides

      • Buy Bitcoins in India
      • Buy Bitcoins in China
      • Buy bitcoins in Russia
      • Buy Bitcoins in Japan
      • Buy Bitcoins in Turkey

      Important Links

      • Home
      • About US
      • Privacy Policy
      • Promote Your ICO
      • Submit post

      Follow Us

      Contact us

      support@itsblockchain.com

      © 2020 itsblockchain.com - Designed and maintained by Fanatic Coders

      No Result
      View All Result
      • About US
      • DEFI
      • Home
      • Newsletter
      • Privacy Policy
      • Promote Your ICO
      • Submit post

      © 2020 itsblockchain.com - Designed and maintained by Fanatic Coders

      Login to your account below

      Forgotten Password?

      Fill the forms bellow to register

      All fields are required. Log In

      Retrieve your password

      Please enter your username or email address to reset your password.

      Log In
      This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.