What are Bitcoin ATMs?
A Bitcoin ATM is quite similar to a regular ATM, however it is tailored with special software to allow a user to purchase Bitcoin and other cryptocurrencies. A Bitcoin ATM can accept either cash or a debit card and exchange it for the digital currency of Bitcoin, BTC. There are earlier versions of Bitcoin ATMs that only allowed the users to purchase it and not be able to sell it. As the technology has advanced, they are now capable of doing both.
Just like a traditional ATM, Bitcoin ATMs are comprised of a LCD monitor, QR scanner, bill collector and dispenser. As the Bitcoin ATMs collect your cash, there is a special software, which makes the buying and selling of Bitcoin fast, simple and secure.
Traditional ATMs are connected to a bank account, whereas a Bitcoin ATM is linked directly to a cryptocurrency exchange through the Internet.
How do they work?
If a user chooses to buy or sell Bitcoin using a Bitcoin ATM, it is broken down into two simple steps:
Step 1: Verification of users identity. As a user approaches a Bitcoin ATM, they must first verify their identity. The most common way of verifying a users identity is through SMS. A user will be asked to input their phone number, and after the user enters their phone number, they will receive a verification code that will need to be entered into the Bitcoin ATM. Once the users identity has been successfully verified, they will then be able to carry on with the transaction.
Step 2: Users decision to Buy or Sell.
After successful identity verification, a user will then be logged into the Bitcoin ATM. The user then decides whether they’d like to buy or sell Bitcoin. If the user chooses to buy Bitcoin, he/she will first need to insert cash into the machine. Once cash is inserted into the Bitcoin ATM, the user will need to scan the generated QR code on the ATM from their wallet on their mobile device in order to receive it.
If the user chose to sell their Bitcoin, they will be required to send the Bitcoin from their mobile wallet to the QR code that has been generated by the Bitcoin ATM.