A Bitcoin ATM is, as the name implies, is a special type of ATM that is specifically designed for buying and selling bitcoin. Bitcoin ATMs allow you to insert cash and buy BTC on the spot, or sell BTC and take out cash.
The majority of customers around the world use them to buy bitcoin rather than sell it. Because of this, it would not be inaccurate to say that for most customers, using a bitcoin ATM is more like using a vending machine than a traditional ATM. You simply insert cash, get your bitcoin, and go!
There are approximately 6,000 Bitcoin ATMs around the world, and that number is steadily increasing as demand for access to cryptocurrency continues to grow.
At Bitaccess, we’ve been designing and building Bitcoin ATMs since 2014. We call our models “Bitcoin Teller Machines” or “BTMs”. If you see our “BTM” logo on the screen, you’ll know you’re using a Bitaccess BTM.
What are the Advantages of Bitcoin ATMs?
The biggest advantage of using a Bitcoin ATM is that it is hands-down the fastest and most convenient way to get BTC.
The entire transaction is performed at the kiosk itself, and does not require users to pre-register or create an account elsewhere. All the user has to do is follow the simple instructions on the screen.
These machines are also important for increasing accessibility to cryptocurrency. In certain places, a Bitcoin ATM might be the only way to get access to cryptocurrency.
How do Bitcoin ATMs Make Money?
Bitcoin ATMs are a vital tool for enabling crypto access in the communities they serve. But who’s profiting from them, and how do they make money?
Well, each Bitcoin ATM is independently owned and operated. If you’ve ever seen one in a store, mall or other public space, the machine is usually owned by a small business owner.
Let’s say you see on a Bitcoin ATM in a local convenience store. Every time a customer uses it, a service fee is charged to sustain its operation. The operator of that Bitcoin ATM receives a portion of that fee, allowing them to earn ancillary income.
For many business owners, a Bitcoin ATM can be a great way to earn some extra income, and even attract more customers. Depending on the number of users, it can be a very lucrative investment.
Another benefit to running a Bitcoin ATM? They don’t require a lot of promotion or advertising. People who want bitcoin generally seek them out on their own, using Google to locate kiosks in their area, or being guided there by friend’s (word of mouth). If you’re an operator, you now have more customers coming in.
How Do You Use a Bitcoin ATM?
There are various models of Bitcoin ATMs, but they all generally follow the same process. Below are the steps for using a BTM:
The customer uses the touch screen to begin a transaction. They will enter their phone number, and receive a verification code via text message, which must be entered on the BTM screen.
The customer is then taken to a dashboard where they can choose to buy or sell BTC. Let’s walk through the steps for buying.
The customer will select the “buy” option, and the BTM will ask them if they already have a wallet. If yes, it will proceed to the scanning screen. If no, it will create and print out a “paper wallet” on the spot for the customer.
If the customer does have a wallet set up already, they will be taken to the scanning screen. BTMs have a camera in the front designed for reading customer wallet QR codes. The user can just show their QR code to the camera, and it will instantly recognize the address.
Once the address has been verified, the bill acceptor turns on and the user can begin inserting cash. They can keep inserting cash until their transaction limit is reached or until they tap “I’m Done” to confirm the transaction.
Once confirmed, the BTC will be sent to the customer’s address. Transactions are usually completed immediately, but may take up to 10 minutes on some occasions.
For selling bitcoin, the process just works in reverse, and the customer can take out their cash once the transaction is confirmed.
Can You Buy/Sell Other Cryptocurrencies with a Bitcoin ATM?
The majority of Bitcoin ATMs only allow users to buy and sell BTC. BTMs manufactured by Bitaccess however allow customers to choose from a variety of altcoins through the integration of Faa.st software.
At this time, there are 23 alternate cryptocurrencies available through our BTMs, including ETH, LTC, XRP, BAT and more (see our full list of supported altcoins here).
We hope you enjoyed this first installment in our Bitcoin ATM series. In our next article, we’ll explain how to get started running a successful BTM business.