Bitcoin ATM (BTM)

November 21, 2023 - Around 2 mins mins to read

Understanding Bitcoin ATMs

A Bitcoin ATM, also referred to as a Bitcoin Teller Machine (BTM), functions similarly to a traditional cash machine. However, instead of displaying bank account details, users are presented with various options for trading Bitcoin in exchange for cash.

Bitcoin ATMs can be classified as either unidirectional or bidirectional. Unidirectional ATMs only offer buying options, while bidirectional ATMs provide both buying and selling functionalities. Unlike regular ATMs, Bitcoin ATMs do not connect to a user’s bank or a banking network. Instead, they serve as internet-enabled interfaces that allow users to interact with a specific cryptocurrency exchange.

The first Bitcoin ATM is believed to have been opened in 2013 at a coffee shop in Vancouver, Canada. Since then, the number of Bitcoin ATMs has significantly increased, with approximately 2,500 machines reported in the United States alone as of 2020. These ATMs are commonly found in transportation hubs like airports and rail stations, as well as in specialized shops and cafes.

Business owners who want to install a Bitcoin ATM on their premises typically enter into a contract with a Bitcoin ATM provider. The provider manufactures and, if necessary, installs the device on-site. There is a wide range of Bitcoin ATM providers available, and most regions are adequately served. Some providers offer both unidirectional and bidirectional hardware, while others provide additional services such as voucher and customer retention programs.

Despite their increasing popularity, Bitcoin ATMs have faced criticism for imposing high transaction fees on users. The U.S. Consumer Financial Protection Bureau has cautioned consumers about these fees and exchange rates. Additionally, tax investigations targeting Bitcoin ATM operators have been conducted in jurisdictions such as Canada and the United Kingdom.