Since Automated Teller Machines (ATMs) were first invented they’ve provided a convenient way of accessing your cash and carrying out simple banking tasks 24/7.
So, it’s not surprising that ATM technology is being used to support the rapidly expanding Bitcoin and cryptocurrency ecosystem.
There are now more than 9,000 Bitcoin ATMs (sometimes referred to as BATMs) globally, enabling holders of debit or credit cards, or cash, to carry out crypto transactions.
This figure represents a huge surge in installations, with the rate doubling in 2020 alone. Bitcoins can now be found in a wide range of locations, even small convenience stores.
Buy, sell or invest Bitcoin using an ATM
There are currently two main types of Bitcoin ATM. First, there are simple ATMs that only allow users to purchase Bitcoin, say for an investment.
Then there are the more advanced ATMs that allow users to buy, sell and transfer a wide range of digital currency, effectively enabling you to trade crypto.
Physically, the machines are often a lot smaller than your typical ATM because they don’t need to contain wads of cash or the accompanying security measures.
You don’t necessarily need an existing digital wallet to buy coins – the machines will supply you with one when you make your transaction.
Once you’ve purchased your coins you’re given a printed copy of your new wallet address and balance, together with a copy of your private key which means only you can access your crypto.
Easier to use for people who are less tech savvy
Bitcoin ATMs also cater for people who are less tech savvy – ie those who aren’t confident when it comes to setting up online accounts and wallets.
They’re also used by people who prefer the increased anonymity an ATM can offer, especially ones which allows cash purchases.
While most machines require some form of ID to use to comply with regulations, this can be something as simple as a phone number which can easily be anonymous and dispensable.
However, an increasing number Bitcoin ATMs are now requiring some form of formal photo ID (ie a driving licence or passport) before you can make a purchase.
Two companies that have emerged as global leaders in ATM technology are General Bytes and Genesis Coin, both of which having around 30% of the market share.
United States and Britain lead in Bitcoin ATM use
The United States leads the way in terms of the availability of Bitcoin and cryptocurrency ATMs, with around 80% of all units located in North America.
Canada, the United Kingdom and Austria follow in terms of the number of Bitcoin ATMs in operation.
Like the price of Bitcoin, ATM growth has been exponential – from a mere 450 units in 2015 to the figure we have today.
As the number of ATMs in use soars, some analysts have suggested they are increasingly being linked to money laundering and facilitating other criminal activities.
Bitcoin ATMs face tighter regulation
Crypto analytics firm CipherTrace found that Bitcoin ATMs were often being used to send funds to what it said were ‘high-risk exchanges’.
The firm also found that an increasing percentage of Bitcoin ATM transactions made in the United States were used to send funds to offshore destinations.
In a Spring 2020 report, CipherTrace wrote: “The percentage of funds sent to high-risk exchanges from U.S. BATMs has seen exponential growth, doubling every year since 2017.
“While approximately 2% of U.S. transactions went to high-risk exchanges in 2017, that number is now knocking at the 8% mark.”
It’s likely that tighter regulation and more controls over BATM use will come into force as their popularity grows.
Adam is the founder of The Crypto Adviser which offers experts guides and reviews on all things related to Bitcoin and cryptocurrency.
Adam is Diploma for Financial Advisers (DipFA) Level 4 qualified, a Member of the London Institute of Banking and Finance (MLIBF), and has worked for many years as a journalist and PR consultant, having studied with the National Council for the Training of Journalists (NCTJ).