Also called Bitcoin Teller Machines (BTMs), Bitcoin ATMs are terminals or kiosks that allow people to buy or sell Bitcoin and other cryptocurrencies using cash. They function very similarly to typical ATMs, giving people the convenience of accessing their digital assets and transacting with them.

BTMs work by connecting users to reputable crypto exchanges, linking to cryptocurrency wallets and facilitating the movement of funds. Despite being called Bitcoin ATMs, it is noteworthy that the machines typically accept transactions in other cryptocurrencies in addition to Bitcoin. Ethereum, Bitcoin Cash, Litecoin, and Dash are among the popular digital assets compatible with some BTMs.

Understanding the History of Bitcoin ATMs

The first operational Bitcoin ATM appeared in Vancouver, Canada on October 29, 2013. This was a significant development in the cryptocurrency world, bringing an unprecedented innovation that simplifies the act of exchanging cash for Bitcoin in an accessible and user-friendly manner. Shortly after the first, another Bitcoin ATM opened in Bratislava, Slovakia on December 8, 2013. This unfurled the door for other BTMs that flooded locations all over the world. There are currently 34,604 Bitcoin ATMs globally, according to Coin ATM Radar.

Source: Coin ATM Radar — Image showing the current number of BTMs installed globally

Despite the widespread presence of Bitcoin ATMs all over the world, they are faced with regulatory challenges. After their inception, Bitcoin ATMs were mandated to adhere to the same laws that guide traditional ATMs. This included a limit to the daily transaction per person and verification processes.

The obvious consequence resulted. The regulations stripped Bitcoin ATMs of their founding principles of decentralization and anonymity. Depending on the transaction volume, some Bitcoin ATMs need users’ phone numbers. Some may even require users to scan their government-issued identification cards to complete certain transactions.

Even though this regulatory condition caused significant dismay within the crypto community, Bitcoin ATMs have been thriving globally. Although most BTMs are located in North America, they are widely dispersed all over the world. Cafes, speciality shops, and transport hubs are now among the common spots where you can find Bitcoin ATMs.

How Do They Work?

Source: Techopedia

Instead of being connected to a bank like traditional ATMs, BTMs communicate directly with the blockchain. Consequently, they are constantly in connection with the internet to power crypto transactions and provide real-time exchange rates. They typically allow users to connect their crypto wallets to the machines via QR codes to facilitate transfer to and from their wallet.

There are two types of Bitcoin ATMs:

1) Unidirectional BTMs: These machines support either the buying or selling of cryptocurrencies.

2) Bi-directional BTMs: These machines support both the buying and selling of cryptocurrencies.

Image source: Breet