A Bitcoin automated teller machine (ATM or cashpoint) enables users to purchase and trade Bitcoin.
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An automated teller machine (ATM or cashpoint) that allows the user to buy and sell Bitcoin.
What Is a Bitcoin ATM?
Bitcoin ATMs (BTMs) work in a similar fashion to conventional cash machines — but instead of being shown their bank account details, users are presented with a series of options for exchanging Bitcoin for cash, denominated in fiat currencies.
BTMs that only offer buying options are referred to as unidirectional, while those that offer both buy and sell functionality are known as bidirectional. Behind the scenes, BTMs are distinct from conventional ATMs. Most importantly, they do not connect to a user’s bank or to a banking network. Instead, they are essentially internet-enabled interfaces that allow the user to interact with a specific exchange.
It is generally thought that the first public Bitcoin ATM — a Robocoin machine — was opened in 2013 at a coffee shop in the Canadian city of Vancouver. As of November 2022, there are reported to be as many as 39,000 BTMs all over the world, with most located in the United States. A large majority of crypto ATMs support Bitcoin, alongside other altcoins like Ethereum, Litecoin, Dogecoin and Bitcoin Cash.
In order to install a BTM in business premises, the owner will enter into a contract with a BTM provider who manufactures and, where applicable, installs the device on-site. There is a growing range of crypto ATM operators, such as Bitcoin Depot, Coincloud, Coinflip, Bitcoin of America, Bitstop, Rockitcoin and more. Some providers offer both unidirectional and bidirectional hardware, while others offer additional services such as voucher and customer retention schemes. Although Bitcoin ATMs are growing in popularity, they have been criticized for imposing high transaction fees on users, which can go as high as 20%. The U.S. Consumer Financial Protection Bureau published an official warning to consumers regarding fees and exchange rates. Meanwhile, other jurisdictions including Canada and the U.K. have targeted Bitcoin ATM operators in tax investigations.