A usual ATM is pretty common and widely used in every country. As a result of advancements in cryptocurrencies, we are seeing machines by the name “Bitcoin ATM”.
As per recent data on coinatmradar.com, there are around 33,896 Bitcoin ATMs installed till December 31st,2021. Out of these, around 90% are in the US, followed by Canada, Europe, Spain, Austria, Switzerland, and the UK. We will cover the basics of Bitcoin ATMs and how they work.

What is a bitcoin ATM?

Bitcoin ATM is a kiosk machine that allows a user to buy or sell Bitcoin and other cryptocurrencies. The mode of payment can be either cash or a debit card. We have two major types of Bitcoin ATMs. One is a uni-directional machine. It only allows the purchase of bitcoin and other cryptocurrencies. On the other hand, we also have a bi-directional Bitcoin ATM. It allows the buying and as well as selling of cryptocurrencies.

All things considered, the “ATM” in Bitcoin ATM is a misnomer. They do not dispense cash. Also, most machines have an upper and lower limit on the cash that can be deposited. The Bitcoin ATMs also have a transaction fee. It can go ranging from 6.5% to 25% depending on many regulations and technicalities.

Brief History of Bitcoin ATMs

The first publicly available bitcoin ATM was launched in Vancouver, Canada in October 2013.
It was a Robocoin machine which is the most advanced digital wallet for Bitcoin.

Two months later in December 2013, Europe's first Bitcoin ATM was set up and launched in Bratislava, Slovakia.

A few months later in the next year of 2014, the first such ATM was installed in the United States. The location was in a cigar bar in Albuquerque, New Mexico. However, the first licensed Bitcoin ATM was developed by Coinme and launched in a Spitfire Grill in Seattle.

How does a Bitcoin ATM work?

A bitcoin ATM connects the user directly to the digital wallet instead of banks. Like other transactions, it will also verify the user’s identity and proceed with the transaction.

Before Buying/Selling a Bitcoin

i. Digital Wallet
Just like a physical wallet, our digital currency has to be kept in a digital wallet. Digital wallets which are highly recommended for Bitcoin ATMs are mobile-app based or web-based.

ii. Set You Digital Wallet
You need to set your digital wallet. It contains a unique key associated with it. It is an alphanumeric character-based key. You can note the key or simply scan the QR code assigned to it.

Using a Bitcoin ATM for Buying/Selling

i. Verification of User
For most machines, the user can verify their identity through their mobile numbers. You can enter your mobile number into the machine. You will receive a verification code that you can enter into the machine for final completion.

ii. Buying a Bitcoin
You can choose the amount in fiat currency and deposit the notes into the machine. After depositing the money, the machine would either send the amount into your Bitcoin Wallet or to your email address. It depends on your preferences. We can also transfer the bitcoins to our pre-existing wallet by scanning the QR code using the machine’s scanner.

iii. Selling a Bitcoin
Selling a Bitcoin is also quite easy. You can enter the number of bitcoins you want to sell. The machine will prompt to send the bitcoin to a particular address. In exchange, the machine will dispense the fiat currency.