They aren’t really ATMs!
In 2017, I read an article about an old lady whose computer got locked out by Ransomware and she had to send bitcoin in order to get it unlocked. All her pictures were on that hard disc, so she went down to a cafe which had a bitcoin ATM and sent the money across. Of course, all instructions including a link to the nearest bitcoin ATM were provided for. A related article spoke about the town of Midland that faced a similar situation and had to pay up by using a bitcoin ATM. That was the first time I’d heard of a “Bitcoin ATM.”
A bitcoin ATM allows users to buy cryptocurrencies to add to their wallet. It also allows a bitcoin wallet holder to withdraw cash from their wallet. The first bitcoin ATM was set up in 2013. Now, there are close to 4000 bitcoin ATMs in the world, and the numbers have been growing consistently. The United States seems to have the most amount of transactions on ATMs, considering there are close to 300 of them and that Americans generally like ATM machines.
Bitcoin ATMs look pretty much exactly like regular ATMs. Some are big lanky machines, and some are simple touch-screens on a mount. You can find them in cafes, malls, and other commercial spaces. But some are known to be in dingy buildings with no CCTV monitoring, so it makes it easier for people to receive their ransom.
Transacting through a Bitcoin ATM is going to cost you though. Instead of a flat fee, ATM transactions can attract a service charge of about 7-8%.
If you were to deposit cash into the ATM, it would print out a QR code with a public key, which you can scan into your wallet to deposit the money into your account. You could also use the QR code on your wallet to withdraw cash from the ATM.
But… why did I say they aren’t really ATMs?
Since Bitcoin ATMs have nothing to do with the banking system, several countries seem to have difficulty accepting it. Where regulations for ATMs are strict and plenty, it becomes difficult to set up an ATM if you aren’t a bank. This makes it even harder to set up one for cryptocurrency.
In October of 2018, founders of Unocoin attempted to set up India’s first bitcoin ATM. This was big news for the Indian Crypto community, but their dreams were soon shattered. In less than a week, the founders were picked up by police for questioning. The police seemed to have questioned them on rumors that the company promised a 2x return and were being viewed as cheats. Many publications claim that much of the problem comes from naming it an ATM, which it actually is not.
An ATM is an automated teller machine, used by bank customers to perform transactions. Prior to ATMs, these transactions were conducted by bank-tellers. With cryptocurrency, we need neither a bank nor a teller. And the ATMs are really just kiosks to access the exchange or your wallet, and either buy cryptocurrency or cash it out for real money. More so, a bitcoin ATM has nothing to do with the banking infrastructure. So it technically isn’t really an ATM. It’s a kiosk.
In conclusion, the Bitcoin ATMs are going to become a pretty common sight even if the numbers grow slowly. Maybe, to begin with, it’ll be used by old ladies to unlock their computer that has all the pictures of their family. But the ATMs aren’t going anywhere for sure. And with the advent of crypto credit-cards, the ATM is going to be more relevant and, maybe in the future, you’ll use it to buy some fruit. But perhaps it should be called something else – something cooler.
Have any suggestions to what you would call a Bitcoin ATM? Let us know in the comments section below: