What is a Bitcoin ATM?
More convenience stores are adding bitcoin ATMs to appeal to customers who trade cryptocurrency.
In tough economic times, businesses are looking for new avenues to explore, and one of them has been bitcoin – which is why convenience store operators are curious about bitcoin ATMs.
Bitcoin is a decentralized digital currency. It can be transferred on a peer-to-peer bitcoin network. Transactions are verified and recorded in a publicly distributed ledger called a blockchain.
Some economists and entrepreneurs have praised bitcoin for its accessibility and liquidity, as well as for the user anonymity and transparency it provides. They also like its relative independence from a central authority and the seductive possibility of high returns. Critics cite what they see as bitcoin’s volatility, relative lack of government regulation, limited use, and irreversibility.
A stand-alone bitcoin ATM is a type of kiosk that allows users to purchase bitcoin and other types of cryptocurrencies with cash or a debit card. Interestingly, a bitcoin ATM is not really an ATM, although they look like them. Unlike ATMs, they do not dispense cash or link to a bank account. Instead, they allow the user to connect to the bitcoin network or wallet to buy crypto tokens with deposited cash. Some terminal providers insist that users already have an account in order to perform transactions.
Several convenience retailers are seeing an advantage in adding bitcoin ATMs to their stores to appeal to a growing customer base of customers who conduct cryptocurrency transactions as they look to increase their financial services to customers.
Bitcoin ATMs come in two varieties: one-way and two-way. About 70% of bitcoin ATMs worldwide are unidirectional, and nearly 80% are located in the United States. However, each of them connects to cyberspace to allow users to make cash purchases or sell bitcoin. Transaction fees typically range from a low of 6.5% to as much as 25%.
The terminals are most often owned and operated by companies that are actively part of the crypto industry. Less often, they are run by a firm with a proprietary trading platform or wallet.
Bitcoin ATMs are also said to be quite safe. Anyone operating one must register with the Financial Crimes Enforcement Network (FinCEN). In addition, the operator will have to comply with the anti-money laundering provisions of the Bank Secrecy Act (BSA). The cryptocurrencies can only be sent once the customers have shared key information – for example passwords and a QR (quick response) code. After a purchase, a transaction receipt is sent to the customer’s wallet.
