Cryptocurrencies are gaining worldwide acceptance and day by day their popularity among investors is witnessing a considerable rise. According to a recently published report from Business Insider, the total number of cryptocurrency users has already crossed the 100 million mark worldwide.
Bitcoin, the most used cryptocurrency in the world, has an estimated user base of around 20.5 million people. Moreover, around 5% of Europe’s total population uses bitcoin for investment, shopping, and various other purposes.
This growing digital trend is also leading to various interesting developments in the real world as well. The installation of Bitcoin ATMs is one such recent innovation that is said to be encouraging cryptocurrency trade, and is making the bitcoin exchange process more convenient for its users.
What Is a Bitcoin ATM?
The term “ATM” is a bit of a misnomer. The machines are not actually ATMs and do not connect to a financial institution or dispense cash. Rather, they are kiosks that connect to the bitcoin network and allow customers to purchase crypto tokens with deposited cash.
A cryptocurrency ATM includes a monitor, QR scanner, and receipt printer. Apart from providing convenience to cryptocurrency users, another major purpose behind these ATMs is to increase familiarity and mass engagement with cryptocurrency and raise transaction numbers.
While a normal ATM machine is generally operated by a financial institution, and allows you to connect with your bank account to withdraw or deposit cash, or conduct other types of transactions, cryptocurrency ATMs operate in connection with an internet-based cryptocurrency exchange portal. It is this portal that manages the transaction through the ATM, without the involvement of banks or any other financial institutions.
While many ATM machines allow users to invest in multiple cryptocurrencies, there are some which are limited to only Bitcoin exchange. In 2013, the world’s first Bitcoin ATM was installed at Waves Coffee Shop, located in the city of Vancouver, Canada. According to Coin ATM Radar, as of 2021, there were more than 17,000 cryptocurrency kiosks in the U.S. alone.
How to Use a Bitcoin ATM
The process of buying and selling bitcoins or another cryptocurrency through a Bitcoin ATM is very easy and somewhat similar to the way you use a normal bank ATM machine. However, people often get confused due to the different user verification methods adopted in these machines. Here is a step-by-step guide to use a bitcoin, or other cryptocurrency, ATM:
When you first reach the ATM machine, you are required to verify your identity. This process is carried out in different ways depending on the ATM you are using. In general, you are either requested to enter your mobile number and OTP (one-time-password), however, there are other types of verification methods in use as well, such as palm-scanning.
Choose to Sell or Buy Bitcoin
Once your identity is confirmed, you make a selection for buying or selling bitcoin. In case you wish to buy, feed a cash amount into the machine, and when your cash is accepted open the cryptocurrency wallet in your smartphone. A QR code is generated which is then scanned in order to complete the transaction.
For selling bitcoins and receiving cash in exchange, you have to scan the QR code on the ATM monitor and send bitcoins from your wallet to the same. Most of the time, this process is quick and cash is instantly dispensed from the machine, but some bitcoin ATMs will take a couple of minutes to process the exchange before you can collect the cash.
Why Bitcoin ATMs Are Getting Popular
During the online exchange of cryptocurrencies, users face various issues related to privacy, support, transaction time, and safety. One issue is that online bitcoin transactions can take days to become verified and confirmed, and investors are sometimes worried about their currency exchange being tracked by anonymous third-parties.
On the other hand, trades made with Bitcoin ATMs are generally instant. Customers do not need to share any bank or personal information. Transactions are made through personal cryptocurrency wallets that are considered a safer option, and all transactions remain completely anonymous.
Moreover, the strong customer support provided by many bitcoin ATM manufacturers is playing a key role in increasing the popularity of these machines among users. For example, there are now dedicated apps to help users find the location of their nearby Bitcoin ATM
Since the use and manufacture of such machines is still a new business model, many new and existing players are making good efforts to establish trust among cryptocurrency users by providing good support and service.
By February 2021, there were around 20,000 Bitcoin ATMs installed globally, and the numbers are said to be increasing fast, especially in the USA and Europe. However, there are also some countries such as China, Bolivia, Saudi Arabia, Qatar, and Vietnam, where governments have banned cryptocurrencies or prohibited the use of bitcoin ATMs because of the possibility of illegal transactions.
Future of Bitcoin
Since its inception, Bitcoin has witnessed a dramatic shift in its price. In 2013, one bitcoin was valued at around $200. At present, it is equivalent to $35K, but the price can fluctuate widely. In April 2021, bitcoin reached a high of $64K before it started falling. In May of this year, China began cracking down on Bitcoin mining and trading, and this has affected its price.
At present, this digital currency has become a bit like gold and oil, speculators are attracted to the uncertainty factor in its price and this has led to increased speculation. The popularity and user base are increasing and so is its influence on the real world.
Since Bitcoin is an independent online currency, there is no particular regulatory body known to control the flow of bitcoins in the world. So, many leaders, economists, and thinkers have been raising their doubts about Bitcoin’s control and credibility. There is also concern about its increasing use as the criminal and money laundering currency of choice.
Perhaps most ominously for Bitcoin, the extremely high energy needs of mining is beginning to be a drag on the currencies’ value. Environmental groups, and even Tesla, are now refusing to accept Bitcoin, due to concerns about its impact on climate change. Bitcoin mining is said to consume as much electricity as a medium-sized European country. And while Bitcoin mining can, of course, be done using clean and renewable energy sources, in many places, Bitcoin is mined with energy from fossil fuels.
However, people advocating for cryptocurrencies firmly believe that as long as Bitcoin exists as an independent currency, their investments are safe, private, and cannot be manipulated by external bodies such as governments and banks. Therefore, they are totally against the idea of public or private intervention in the Bitcoin exchange process.
However, all these conflicts, confusions, and controversies could also play in the favor of Bitcoin, as despite the numerous risks involved, people are showing continued interest in its trading and despite short-term setbacks, the Bitcoin economy continues to boom.
The opinions expressed in this article are the author’s and not IE’s. IE does not advise on any investments.