ATMs or automated teller machines are not new. These technological innovations have revolutionized finance and the financial system. Before ATMs emerged, people would have to deposit or withdraw funds from their bank accounts through a long and often tedious process. For example, you would have to go to the bank and stand in a long line waiting to see one of the bank tellers. Typically, you need to use Bitcoin trading platforms like the Bitcoin Prime to access more Bitcoin.
Since ATMs came, you only need to go to an ATM to withdraw or deposit your funds. Modern ATMs have more services, like letting your transfer funds to a different bank account. Banks have embraced this revolutionary technology and have invested a lot in having them. Today, you will likely see an ATM at every street corner or shopping mall. However, have you heard about Bitcoin ATMs?
Defining a Bitcoin ATM
Bitcoin ATMs are similar to conventional bank ATMs. They look the same and typically serve the same purpose. Nevertheless, unlike a bank ATM, a Bitcoin ATM deals with Bitcoin and other cryptocurrencies. In the simplest terms, a Bitcoin ATM is a machine that allows users to buy and sell Bitcoin and other cryptocurrencies.
While a bank ATM connects to a bank, a Bitcoin ATM does not relate to a bank account like a conventional bank ATM. Instead, it connects to users’ Bitcoin wallets. The Bitcoin ATM looks like the typical bank ATM, with a similar interface. Visiting and using a Bitcoin ATM is akin to using a conventional bank ATM. The main difference is the type of currency and services each supports.
The precise number of Bitcoin ATMs today remains to be determined. What is clear is that there are tens of thousands of these machines, and the number is growing steadily. Several factors are behind this trend. However, one stands out. Bitcoin ATMs provide an easy and fast way to access Bitcoin and other cryptocurrencies. Businesses and individuals can convert fiat money to Bitcoin and other virtual currencies without enduring long and tedious processes.
The app lets you trade Bitcoin by registering your account, funding it, and starting trading. While it works well, acquiring Bitcoin through the app may take longer than through a Bitcoin ATM.
How Bitcoin ATMs Work
Now that you understand what a Bitcoin ATM is let us focus on how these machines work. Overall, a Bitcoin ATM works by letting users use fiat money to buy Bitcoin. Some will also allow users to sell Bitcoin for fiat money. Since they are automated teller machines, they do this automatically without the direct involvement of a teller.
Let us consider the case of a user buying Bitcoin through a Bitcoin ATM. The user will first deposit fiat money, like US dollars, into the machine. The machine starts a transaction of transferring the Bitcoin equivalent to the cash deposited into the user’s Bitcoin wallet. The amount will depend on Bitcoin’s current price since cryptocurrency prices keep changing.
To withdraw money from a Bitcoin ATM, a user selects the amount of Bitcoin he wishes to sell, and the machine will let him know how much it is worth in fiat currency based on the current rate. After entering his Bitcoin wallet address and confirming the transaction, the ATM will supply the cash.
Bitcoin ATMs are becoming more commonplace than ever. These machines allow users to acquire Bitcoin or other cryptocurrencies using fiat currency. Some also allow users to make cash withdrawals after selling their Bitcoin. The convenience of Bitcoin ATMs in making it easier and faster to acquire and sell for fiat currency will continue to drive their growth.