A bitcoin ATM is an internet machine that allows a person to exchange bitcoins and cash. Some Bitcoin ATMs offer bi-directional functionality; these machines enable both the purchase of Bitcoin as well as the redemption of Bitcoin for cash.

What is a Bitcoin ATM?

Bitcoin machines are not ATMs in the traditional sense and probably use the wording ATM as a neologism. Bitcoin kiosks are machines which are connected to the Internet, allowing the insertion of cash in exchange for bitcoins given as a paper receipt or by moving money to a public key on the blockchain. They look like traditional ATMs, but Bitcoin kiosks do not connect to a bank account and instead connect the user directly to a Bitcoin exchange.

Some machines allow selling of Bitcoins for money, but these kind of machines are often hard to come by. On October 29, 2013, Waves Coffee Shop in Vancouver, Canada, opened the world’s first Bitcoin exchange machine. The device is often comprised of a scanner, a cash dispensary, and a computer to manage the transactions.

Bitcoin ATMs generally serve a less sophisticated clientele, according to industry experts. The machines charge steep fees – up to 12 percent – and rarely require more than a cellphone number to establish an identity. Bitcoin ATM companies have moved aggressively into areas that are underserved by banks.

How to Use Bitcoin ATM Machines?

Though there are a lot of Bitcoin ATM manufacturers today, their machines follow a basic operational process.

Step 1: Open the QR code for your Bitcoin wallet on a smartphone. You can get a bitcoin wallet from Coinbase if you don’t already have one! Don’t forget to download Coinbase’s app for iPhone or Android from the AppStore or GooglePlay.

Step 2: Then run the QR code under the bitcoin ATM machine’s scanner.

Step 3: Enters the amount of cash to be exchanged for Bitcoins.

Step 4: Waits for the machine to process the transaction and give out a confirmation.

Step 5: Check your bitcoin wallet to see if the Bitcoins transaction is processed!

Bitcoin ATM machines are very intuitive to use. While there are still not that much Bitcoin ATM machines going around, it’s not that hard to imagine that we will see more of these machines in the near future.

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