Bitcoin’s ATMs

Key takeaways

• They spawn new business models while simultaneously touching and influencing the lives of millions.
• Instead, they are kiosks that connect to the Bitcoin network and allow customers to purchase crypt tokens with deposited money.
• But, for now, my grocery store only accepts debit or a credit cards.

Making buying BTC & other digital currencies easier for the mainstream #

Revolutionary innovation constantly expands possibilities. They spawn new business models while simultaneously touching and influencing the lives of millions. For instance, the internet facilitated e-commerce. The smartphone and GPS made ride-sharing a reality. Similarly, advancements in batteries gave way to electric-powered vehicles.

Bitcoin, the first of the digital currencies, is no different. The range of merchants that accept it is small but growing; look for the telltale ₿ symbol at the cash register. And entrepreneurial Bitcoiners are working to make it much easier to use the currency, building everything from point-of-service machines, a.k.a the Bitcoin ATM to even coming up with PayPal alternatives.

For crypt evangelists, the dream is finally coming true. A recent trip to downtown Toronto showed how much cryptocurrencies and their many offerings had finally proliferated everyday lives. From small mom & pop shops, displaying neon boards of ‘Ethereum Sold Here’ to finding a Bitcoin ATM emphatically tucked away in the corner of a mainstream café, right beside – mind you – a conventional ATM.

The going hasn’t been easy for Bitcoin. After a relative slumber over the past years, the pandemic infused furor in the stock market saw Bitcoin rapidly rise to its highest levels. And like much of what goes up, it’s also seen a bit of a tumble in recent days. But one thing is for sure; digital currencies seem to be here to stay (for the near future), and with it stays all its bells and whistles.

Bitcoin ATM’s #

So, where exactly does the Bitcoin ATM fit in? With widespread interest in Bitcoin over the recent years, companies hope that these ATM’s can make purchasing and withdrawing digital currency a whole lot easier.

The world’s first Bitcoin ATM was installed at a Vancouver, Canada, coffee shop owned by Waves Coffee House in October 2013. The ATM was manufactured by Las Vegas-based Robocoin and supplied by Bitcoiniacs. Customers could insert cash into the ATM and receive Bitcoin or convert Bitcoin to cash, with currency conversion taking place through a Canadian Bitcoin exchange.

Since then, almost 29,000 crypt ATMs have already been installed, according to CoinATMRadar, of which the lions share are located in the USA and Canada. The rapid expansion of the ATM’s is oft based on one critical argument – ATM’s give quick access to crypt vs an exchange. For Bitcoin or any similar currency to be accepted as an alternative to traditional paper money, Bitcoin ATM could be the most convenient distribution channel available to consumers.

In May 2021, an article in Newsweek revealed that about 46 million Americans now own at least a share of Bitcoin – that equals about 17% of the adult population. With the hype generated in the recent months by influential names like Melon Musk and Twitters Jack Dorsey, it might be safe to say that these numbers are only set to increase.

However, the ambiguity or the perceived difficulty of opening a digital wallet and converting physical money into digital currency has left the majority of baby boomers and millennial on the fence about its adoption.

That’s the gap major providers are looking to fill with the hopes that many people looking to get started with crypt value the tactile element of a physical machine, such as an ATM. Aiming at the group of unbaked and underbanked, major ATM vendors try to make the crypt ATM the most straightforward way of purchasing crypt.

With no waiting times for verification, ATM’s let you have your share of Bitcoin even before you reach your parked vehicles. Broadly speaking – everyone understands an ATM and crypt ATMs are not too unique of a concept.

Understanding Bitcoin ATMs #

Yes, the use of the acronym “ATM” might be a contradiction. If it wasn’t already evident, Bitcoin ATM’s help, you buy and sell cryptocurrency. But, the machines don’t actually dispense physical cash. Instead, they are kiosks that connect to the Bitcoin network and allow customers to purchase crypt tokens with deposited money.

Digital currency buyers need to scan a quick response (QR) code corresponding to their digital wallet address, much like an account number. Purchased coins are transferred to the wallet in a matter of seconds. For first time buyers, especially those without a wallet, a new one can easily be generated. After the purchase, a record of the Bitcoin gets created. The online ledger is also formed, and the digital currency proceeds to appear in the customer’s wallet. The two types of Bitcoin ATM’s are

• One-way Bitcoin ATMs– Termed as fiat to crypt - Fiat money is legal tender whose value is tied to a government-issued currency. These machines help users exchange cash by using your bank card, for Bitcoin
• Two-way Bitcoin ATMs– These don’t just allow you to purchase Bitcoin, but it also helps **’Cash-Out’ your existing digital currency

For novice users, these ATM’s provide an ideal touchpoint into the web of crypt. Using the traditional bank card or cash unlocks access to an expanding world of digital currencies. In September 2021, El Salvador became the first country to adopt Bitcoin as legal tender paving the way for 200 ATM’s across the country to do the heavy hauling. Miami, too recently announced its plan to pay government workers in Bitcoin. NFL has brokered deals with some of its star players in Bitcoin, and who can forget NFT’s and the unconventional marketplace for digital art.

Breaking Down Banking Barriers #

This increase in adoption demonstrates the advancement of digital payments. Could this be the transition to real-world financial models that crypt enthusiasts were hoping for? Perhaps. Ideologically speaking, cryptocurrency ATMs are an ideal stepping point to solving one of the world’s biggest problems - banking barriers.

A 2017 study by World Bank showed that approximately 1.7 billion people worldwide and roughly 56% of adults in the developing world don’t have a bank account. Yes, the study is a bit old, but how far could we have come? Did the pandemic serve to accelerate an already prevalent condition?

Now here is another interesting fact. Many of these unbaked folks do have a cell phone, which allows them to have a digital wallet to store cryptocurrencies.

Crypt ATM vendors are actively looking to target this section of society. The concept of Bitcoin ATMs is pioneering in itself. Taking it a step further to help break down traditional banking barriers is what the original creators of Bitcoin hoped would one day happen. The increased worldwide use would reduce the dependence on centralized banks and give way to currencies like Bitcoin, which can be instantly managed via an internet connection in any part of the world. From there, cryptocurrency ATM models enter the scene, with crypt holders using their digital assets to cash out and convert to physical currency when needed.

Of course, much like anything around us, there is always a flip side. The risk of hacks and digital thefts is already on the rise. KYC (Know Your Customer) compliance, created initially by banks to put a dent in money laundering, is still unavailable, giving way to a darker use of the currency. And we can put up the climate change impact of Bitcoin mining for a later discussion.

Yes, the future of Bitcoin and its ATM’s seems to shimmer with possibility. But, for now, my grocery store only accepts debit or a credit cards. So most certainly, serious adoption is still a while away.

Related reading

• Bitcoin 101 for Beginners
• How Accepting Bitcoin Can Help Your Business Increase Profit
• Intel May Be Working on a Chip Specializing in Bitcoin Mining

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Questions and answers

So, where exactly does the Bitcoin ATM fit in? #

With widespread interest in Bitcoin over the recent years, companies hope that these ATM’s can make purchasing and withdrawing digital currency a whole lot easier.

Could this be the transition to real-world financial models that crypt enthusiasts were hoping for? #

Ideologically speaking, cryptocurrency ATMs are an ideal stepping point to solving one of the world’s biggest problems - banking barriers.