A bitcoin ATM or kiosk visually resembles with traditional bank ATMs. However, instead of being connected with customers’ bank accounts, a bitcoin ATM functions as a system on the Internet that enables users to buy and sell bitcoins in exchange of cash. Bitcoin ATMs can be bi-directional in nature, which means they allow both purchase and selling of bitcoins for cash. In some cases, the providers of bitcoin ATMs require their users to open accounts before they can enjoy transaction through these machines.
Owing to the additional infrastructure cost, transactions via bitcoin ATMs can be costlier than online transactions. Businesses use bitcoin ATMs as money transmitting tools. In order to avail the status of a money transmitter, businesses must not only follow FinCEN ruling but also should exhibit regulatory compliance with Know Your Client and Anti Money Laundering procedures, or AML and KYC. Completion of these processes puts monetary burden on businesses, which they compensate by nudging up transaction fee. Typically, the transaction fees are 5 percent and can go as high as 7 percent.
Types of Bitcoin ATMs
The most frequently used bitcoin ATMs are:
- Genesis1 bitcoin ATM: Manufactured by San Diego based Genesis Coin, this device functions as a two-way machine that you can use for both buying and selling bitcoins.
- Satoshi2 bitcoin ATM: It is the last generation of machines produced by Genesis Coin. Though its hardware configuration pretty much resembles Satoshi1 bitcoin ATM, the inclusion of a cash dispenser on the bottom right makes it a two-way machine. According to the available data, globally 51 of such machines are installed and they comprise 7.6% of all bitcoin ATMs.
- Lamassu bitcoin ATM: These are, arguably the most popular one-way machines. Lamassu is users’ favorite owing to its seamless bitcoin purchase process within 15 seconds. There are 164 of these machines are installed across the globe.
- Lamassu with Santo Tirso: Lamassu and Santo Triso worked together to produce a two-way bitcoin ATM machine that combines the traditional Lamassu bitcoin ATM and Santo Tirso floor stand with cash dispensing facility.
- BATM2 bitcoin ATM: BATM2 is a second generation one-way machine that embeds a fingerprint scanner and allows buying bitcoins only.
- BATM3 bitcoin ATM: It is a two-way machine that General Bytes launched during the first half of 2015. As per the latest information, there are 20 BATM3 bitcoin ATMs across the world.
A few other popular choices include, BitAccess, BitXatm, Robocoin and Skyhook.
- How to Use a Bitcoin ATM for Purchasing Bitcoins.
- Start the process with selecting your preferred language for transaction.
- Opt for the ‘buy bitcoins’ option
- Enter the total amount of bitcoins you wish to purchase
- Enter your registered mobile number for verification via a unique code, which will be sent to your mobile through SMS
- Enter the code
- In case of large amount of purchase, you will be asked to submit scanned copy of ID proof
- If you have a bitcoin wallet, scan it later – if you don’t have one, generate your wallet and print it. With Belfrics you can create a secure digital wallet instantly.
- Scan QR code
- Insert the right cash amount
- Press ‘send’ to finalize your transaction and collect your receipt
How to Use a Bitcoin ATM for Selling Bitcoins
Start with selecting the preferred language for your transaction
- Opt for ‘Sell bitcoins’ option
- Choose the amount you wish to sell
- Complete verification process with the unique code that you will receive via SMS at your registered mobile number
- Submit scanned ID proof for the transaction of larger amount
- Define the amount of fiat currency that you would prefer receiving in cash
- Collect the QR code from the ATM for the destination, where the bitcoins should be sent
- Send bitcoins using your wallet
- You may receive the cash immediately in case of small transaction
- In case of larger amount, you will receive a receipt with a printed redeem code
- Revisit the machine later and process the redeem code for cash dispensation
In some instances, users are allowed to initiate the process of bitcoin selling, remotely. It implies that users can send bitcoins from any place of their preference. Once the successful completion of their delivery is confirmed via SMS, they can visit the closest bitcoin kiosk and collect the cash.