Bitcoin ATM is the name for a machine that can be used to buy and sell Bitcoin. Some Bitcoin Automatic Teller Machines require a user ID to transact according to the regulations in force in their country. With this machine, users with Bitcoin and Bitcoin wallets on their smartphones can sell/buy Bitcoins without having to have an account on a Bitcoin exchange. Currently, there are hundreds of Bitcoin ATMs in the world.
Bitcoin ATMs work in a similar way to conventional ATM machines — but instead of showing their bank account details, users are presented with a series of options for trading Bitcoins in exchange for cash.
BATMs that only offer buy options are referred to as one-way, while those that offer to buy and sell functions are known as two-way. Behind the scenes, BATM is different from conventional ATMs. Most importantly, they are not connected to the user’s bank or to the banking network.
Instead, they are essentially internet-enabled interfaces that allow users to interact with specific exchanges.
It is generally thought that the first Bitcoin ATM opened in 2013, in a coffee shop in the Canadian city of Vancouver. In 2020, there are reportedly as many as 2,500 BATMs in the US.
They are most commonly found in transportation hubs such as airports and train stations, as well as in specialty shops and cafes. To install the BATM on-site, the owner will enter into a contract with the BATM provider that manufactures and, if applicable, installs the device on-site.
There are a growing number of BATM providers, and most of the world is now fairly well served. Some providers offer unidirectional and bidirectional hardware, while others offer additional services such as vouchers and customer retention schemes. Although Bitcoin ATMs are growing in popularity, they have been criticized for imposing high transaction fees on users.
The US Bureau of Consumer Financial Protection issues official warnings to consumers regarding fees and exchange rates. Meanwhile other jurisdictions including Canada and the UK have targeted Bitcoin ATM operators in tax investigations.