What is a Bitcoin ATM? Full Details
Today we are going to give you complete information about What is a Bitcoin ATM? In October 2021, Walmart, the biggest company in the US by revenue, announced that it would hosting Bitcoin ATMs in 200 of its 4,700 supermarkets. This caused a big ripple in the crypto world, given Walmart’s size and customer base, but if you’re among those who aren’t even sure what a Bitcoin ATM is, we’re here to help explain what they do, how they work and why you’re likely to see a lot more of them pop up.
What is a Bitcoin ATM?
The phrase “ATM” is one of those expressions that can be used to communicate in virtually every nation on the planet. You can withdraw money from your account using these devices, which are linked to the banking system.
The acronym ATM, which stands for Automated Teller Machine, doesn’t exactly describe the function well. An employee of a retail bank who processes deposits and withdrawals in person is known as a “teller” in America. A machine that performs this function continuously is an ATM.
The machines at Walmart and other locations around the world operate differently from your typical ATMs because Bitcoin is a digital money with no physical form and no centralised authority.
Actually, a crypto exchange kiosk would be a more accurate description, but it still can’t match with the acronym ATM’s ability to be instantly remembered.
What functions do a bitcoin ATM?
The main purposes of Bitcoin ATMs are to enable the purchase of Bitcoin (and other cryptocurrencies) using cash and the sale of Bitcoin for cash.
Given that cash is steadily losing its appeal as a medium of exchange, it is paradoxical that Bitcoin ATMs only accept cash as payment.
Due to the anonymity of Bitcoin, the main concern is that ATMs would turn into a haven for money laundering. As a result, they set restrictions on the amount you can purchase or sell, in some cases ask you to open an account with the ATM operator, and in some circumstances even request KYC.
How do Bitcoin ATMs operate?
Given what we’ve already said, you’ll need two things in order to purchase Bitcoin from an ATM. A Bitcoin wallet and cash. If you are uncertain as to what a Bitcoin wallet is or does, read this article first.
You must first enter your Bitcoin address information by allowing the machine to scan a QR code from a Bitcoin wallet on your phone. When you purchase Bitcoin from the ATM, it will be sent here. A public address system only permits money to enter the system, not to leave.
Next, you specify to the ATM how much cash you wish to convert to bitcoin. Based on the current exchange rate and heavy costs that could total 10%, the machine will give you a price.
Given the frequent price volatility, the quote will only be available for a short period of time after you accept it, during which you must put in the necessary funds.
The machine will conduct the transaction after accepting the cash, which you may later confirm on your mobile wallet. The machine will issue a receipt for the transaction, but you might need to wait to make sure it was confirmed.
The procedure will be reversed if you wish to sell bitcoin and get cash. You can scan a QR code that the device provides. You provide the quantity of bitcoin you wish to sell. Once the quote is accepted, you have a certain period of time to send the Bitcoin. Cash will be given out after it is received.
Problems with Bitcoin ATMs
Despite the eye-watering fees and the fact that Bitcoin ATMs only accept cash, they are comparable to another frequent method of conversion available at supermarkets: changing coins into cash.
Convenience is what draws people to coin-to-cash converters. In spite of the hefty rates, there will always be a need to convert huge numbers of pennies into something more handy because very few locations, including banks, offer the service.
Given that you require a wallet in order to purchase or sell bitcoins, you can’t really make the same case for a Bitcoin ATM. Some ATMs just dispense a paper voucher that must be scanned using a QR code; nevertheless, even in these cases, you still require a wallet.
Because of this, criminals have turned to them to launder money or commit various internet scams. Although ATMs do offer a pathway to actual currency, which is highly favoured by thieves, this is a minor but persistent aspect of cryptography generally and is not exclusive to ATMs.
It appears that the reason Walmart’s plan to test out ATMs is such a significant issue is because it puts Bitcoin in front of a broad audience of regular Americans. It is quite doubtful that people will use the machines on the spur of the moment, but as they slouch over their trolleys while waiting in line, some of that enormous audience may become curious in them, which, given Walmart’s reach, could result in increased adoption.
With Walmart’s initiative, there may be many more ATMs than the over 31,000 already located in 76 different countries, according to CoinATM Radar. 10% commission on bitcoin purchases is good business, just like the Coinstar-style coin converters, which are quite profitable.
