Bitcoin ATM (BTM)
An automated teller machine (ATM or cashpoint) that allows the user to buy and sell Bitcoin.
What is a Bitcoin ATM?
Bitcoin ATMs work in a similar fashion to conventional cash machines — but instead of being shown their bank account details, users are presented with a series of options for trading Bitcoin in exchange for cash.
BATMs that only offer buying options are referred to as unidirectional, while those that offer both buy and sell functionality are known as bidirectional.
Behind the scenes, BATMs are distinct from conventional ATMs. Most importantly, they do not connect to a user’s bank or to a banking network. Instead, they are essentially internet-enabled interfaces that allow the user to interact with a specific exchange.
It is generally thought that the first Bitcoin ATM was opened in 2013, at a coffee shop in the Canadian city of Vancouver. As of 2020, there are reported to be as many as 2,500 BATMs in the U.S. alone. They are most frequently found in transport hubs such as airports and rail stations, as well as in specialist shops and cafes.
In order to install a BATM in a business premises, the owner will enter into a contract with a BATM provider who manufactures and, where applicable, installs the device on-site. There is a growing range of BATM providers, and most of the world is now fairly well served. Some providers offer both unidirectional and bidirectional hardware, while others offer additional services such as voucher and customer retention schemes.
Although Bitcoin ATMs are growing in popularity, they have been criticized for imposing high transaction fees on users. The U.S. Consumer Financial Protection Bureau published an official warning to consumers regarding fees and exchange rates. Meanwhile other jurisdictions including Canada and the U.K. have targeted Bitcoin ATM operators in tax investigations.