Understanding Bitcoin ATMs
Bitcoin ATMs, known as BTMs, operate similarly to traditional cash machines.
However, instead of displaying bank account details, users are presented with options to exchange Bitcoin for cash in fiat currencies.
Features and Functionality.
BTMs can be categorized as unidirectional or bidirectional.
Unidirectional BTMs only offer buying options, while bidirectional ones provide both buying and selling functionality.
Unlike conventional ATMs, BTMs do not connect to users’ banks or banking networks.
Instead, they function as internet-enabled interfaces that enable users to interact with specific exchanges.
To install a BTM in a business establishment, the owner typically enters into a contract with a BTM provider who manufactures and, if applicable, installs the device on-site.
Criticisms and Regulatory Concerns.
Despite the increasing popularity of Bitcoin ATMs, they have faced criticism for imposing high transaction fees on users, which can reach as high as 15%. The U.S. Consumer Financial Protection Bureau has officially warned consumers about fees and exchange rates.
In addition, jurisdictions such as Canada and the U.K. have targeted Bitcoin ATM operators in tax investigations.