Automated teller machines (ATMs) in the banking industry are not a new concept in the world. A bank ATM facilitates customers to make physical withdrawals and deposits without visiting the bank. On the other hand, Bitcoins are also familiar around the globe. Many investors around the world are investing in Bitcoin. According to many, Bitcoin is a better method of gaining passive income. However, the Bitcoin ATM is some kind of new play on an existing concept. Simply, it is about adopting ATM concepts to the Bitcoin industry. But it is important to remember that Bitcoin ATMs are not the same as bank ATMs. What exactly are Bitcoin ATMs?
A Bitcoin ATM is an internet-connected device that often acts like a Kiosk. A Kiosk is a standalone booth that consumes a small area. Most of the time, these are implemented as temporary devices. The Bitcoin ATM facilitates users to purchase cryptocurrency, including Bitcoin, by depositing cash. Unlike bank automated teller machines, Bitcoin ATMs generate blockchain-based transactions that transmit cryptocurrency to a user’s digital wallet, usually by QR code. Because the device is connected to the Bitcoin network via the internet, users are able to purchase crypto tokens using fiat currency.
How do Bitcoin ATMs work?
According to the working mechanism of the device, buyers often scan a rapid response (QR) code that corresponds to their own Bitcoin wallet address. After the purchase, the acquired coins are sent to the above cryptocurrency wallet. However, if the buyer does not have an existing wallet, a new one can be created. A record of the Bitcoin will appear in the customer’s wallet after the purchase. However, the transaction may take several minutes to complete. Considering the overall procedure, Bitcoin ATMs generate blockchain-based transactions that transmit cryptocurrency to a user’s digital wallet, usually by QR code.
Currently, Bitcoin ATMs are operating in the United States. All the ATMs in the country have to register with the Financial Crimes Enforcement Network (FinCEN) and comply with the anti-money laundering provisions of the Bank Secrecy Act (BSA).
The amount of cash that can be deposited at most Bitcoin ATMs has a lower and upper limit. Depending on the transaction, a fee will be charged to the user. It is calculated according to a specific percentage of the transaction. According to the size of the transaction, a verification code will be sent to the users’ mobile phones. Therefore, the Bitcoin ATM requests a phone number in order to ensure security. Otherwise, users may be required to scan a government-issued identity, such as a driver’s license.
- The above discussion is neither financial advice nor financial recommendation. It is a basic study on cryptocurrency which is done based on resource sources. Therefore, our team accepts no responsibility or liability for any predictions/decisions you make in the industry.