In any booming industry, once a product is created, thousands of ancillary businesses begin popping up to support that industry. As an example, think of all the iPhone accessory brands that launched after the iPhone first dropped.
In the world of cryptocurrency, this is no different — from digital wallets and exchanges, to media sites and influencers, Bitcoin and other cryptocurrencies have taken the business world by storm. One of the most interesting developments to come out of this craze is the Bitcoin ATM. In this blog post, Coin Cloud will be discussing what Bitcoin ATMs are and how they work.
A bitcoin ATM is an Internet-connected kiosk that allows customers to purchase bitcoins and/or other cryptocurrencies with deposited cash.
A bitcoin ATM allows customers to buy bitcoin and other cryptocurrencies. The use of “ATM” is a misnomer. The machines are not actually ATMs and do not dispense cash. Rather, they are kiosks that connect to the bitcoin network and allow customers to purchase crypto tokens with deposited cash. Bitcoin ATMs are rarely operated by major financial institutions and do not connect customers to a bank account.
A bitcoin ATM is not the same as an automated teller machine (ATM) that allows bank customers to physically withdraw, deposit, or transfer funds in one’s bank account. Rather, bitcoin ATMs produce blockchain-based transactions that send cryptocurrencies to the user’s digital wallet, often via the use of a QR code.
Buyers will typically scan a quick response (QR) code corresponding to their own bitcoin wallet address, to which purchased coins are transferred. If the buyer does not yet have a wallet, a new one can be generated. After the purchase, a record of the bitcoin will appear in the customer’s wallet, though this may take several minutes to process.
Most bitcoin ATMs will set a lower and upper limit on the cash that can be deposited. All bitcoin ATM operators in the United States must register with the Financial Crimes Enforcement Network (FinCEN) and comply with anti-money laundering provisions of the Bank Secrecy Act (BSA).2 Depending on the transaction size, the bitcoin ATM may ask you for a mobile phone number to receive a text verification code. Or it may require you to scan government-issued identification, such as a driver’s license, before completing a transaction.
Buying and/or selling Bitcoin using a Bitcoin ATM can be broken down into two (2) simple steps:
Step 1: Verify your identity. When a user first comes up to a machine, he or she must verify their identity. This can be done through a variety of different ways depending on the machine. For Coin Cloud machines, users must input their mobile phone numbers into the machine; they will then receive a verification code by text message to be entered into the machine. Once confirmed, users can proceed with the transaction.
Step 2: Decide to Buy or Sell. Once a user is logged into the BTM, he or she must decide whether or not they want to buy or sell Bitcoin. To buy Bitcoin, a user feeds cash into the machine, then generates a QR code from their cryptocurrency wallet on their mobile device, which is scanned to receive their purchased Bitcoin.
To sell Bitcoin, a user sends Bitcoin from their digital wallet to the QR code provided by the Bitcoin ATM. Depending on the machine, some Bitcoin ATMs will dispense cash to the user immediately, while others may take a bit of time to process the transaction. Nonetheless, these verification times are exponentially quicker than online exchanges. Check out how Coin Cloud makes buying and selling Bitcoin quick and easy for our users.
Customers are charged a service fee for using a bitcoin ATM. This fee is typically charged as a percentage of the transaction rather than a fixed dollar value. The Consumer Financial Protection Bureau (CFPB) has warned that fees to use Bitcoin ATMs can be very high, and the exchange rates offered may not be as competitive as what consumers could find elsewhere.3 Bitcoin ATM operator CoinFlip says its average fee for purchases is about 7% higher than the spot price for Bitcoin.4
ATM providers are third-party companies that sell the machines to merchants who want to install an ATM for their business. Adding an ATM to your location is one of the best ways to increase your business revenue.
Today, according to the crypto ATM tracker coinatmradar.com, there’s approximately 36,659 crypto ATMs hosted in 76 different countries. Crypto ATM numbers have grown significantly over the years, and 2021 saw the largest annual increase so far, with more than 20,000 machines added during the year.
As the first quarter of 2022 has come to an end, data from coinatmradar.com indicates there are 36,659 crypto ATMs available. On December 30, 2021, Bitcoin.com News reported that there were 33,900 crypto ATMs, which means that over the last 93 days, 2,759 crypto ATMs have been installed across the globe.
That’s an 8.13% increase since December 30, and currently, there are 612 operators managing the 36,659 machines. Operators include Bitcoin Depot, Coin Cloud, Coinflip, and Bitcoin of America. Additionally, there are 43 crypto ATM producers with manufacturers like Genesiscoin, General Bytes, Bitaccess, Coinsource, Bitstop, and more.
The top operator in terms of the most crypto ATMs is Bitcoin Depot with 7,001 installed worldwide. Coin Cloud is the second-largest operator with 5,198 crypto ATMs in operation. While Bitcoin Depot commands 19.1% of the 36,659 machines installed, Coin Cloud captures 14.2%.
Coinatmradar.com also shows a map of where all the crypto ATMs are located and what type of crypto asset the machines support. For instance, crypto ATMs support bitcoin, ethereum, bitcoin cash, litecoin, dash, monero, zcash, dogecoin, tether, and xrp.
The crypto ATM tracker site also shows that most of the machines are located in the United States, as the country hosts 32,623 crypto ATMs. The country with the second-largest number of crypto ATMs is Canada with 2,439 locations. The U.S. and Canada are followed by Spain (225), El Salvador (204), Poland (180), and Switzerland (147).
As far as crypto ATM installations by manufacturer, Genesis Coin commands 41.6% of the world’s share of crypto ATMs installed. General Bytes is the second leading manufacturer in terms of crypto ATM installations, with 21.4% of the global share. Genesis Coin and General Bytes are followed by Bitaccess (15.2%), Coinsource (5.3%), Bitstop (4.6%), Bytefederal (3.7%), and “other” manufacturers (8.2%).
Parsaland Trading Company with many activities in the fields of import and export, investment consulting, blockchain consulting, information technology and building construction