As a finance professional, it is natural to notice new trends in the sector. One such trend that has piqued my interest and millions of global users is the digital assets, the so called cryptocurrency.
Championing the cause of this virtual currency is the popular Bitcoin. Crypto has introduced us to novel techniques and ideas that may be strange to some individuals. Amongst this is cryptocurrency automated teller machine (ATM).
What is a crypto ATM, by Maxim Bederov
Ever strolled into a gas station or a mall and seen a strange-looking ATM? If yes, that must be a crypto machine – a Bitcoin ATM, to be specific. This innovative ATM offers customers a pretty fast way to buy cryptocurrencies. This can be done by using cash or credit card.
However, unlike traditional ATMs, that allow you to withdraw fiat currencies such as USD or EUR from your individual bank account or credit card, the crypto machine allows a stationary exchange. With a crypto ATM, you can exchange fiat for popular cryptocurrencies like Bitcoin.
As a finance professional, one thing I’ve noticed about these machines is that some perform dual functions. Some Bitcoin ATM allows you to buy the cryptocurrency and also give you the power to sell the crypto for cash, while some crypto ATM providers make sure that users have an existing account before making any transaction on the machine.
Basically, there are two types of crypto or Bitcoin machines: one is the cash kiosks, and the other is the conventional ATMs. These two kinds of machines are connected to the Internet, so one can carry out cash or debit card payment to receive Bitcoins. The cryptocurrency that’s received usually come in form of paper receipt, or the money is moved to a public key on the blockchain.
In another vein, Bitcoin cash kiosks appear like the conventional ATMs. But these machines do not link to a bank account; it only connects users to a Bitcoin exchange.
How common are these machines, Maxim Bederov?
The first cryptocurrency and Bitcoin machine rolled out in 2013. Since then, the numbers of crypto ATMs have increased significantly. More finance professionals and entrepreneurs have begun to invest in these machines, with the first going online on November 1.
As of March 2019, there were over 4,400 cryptocurrency ATMs located in 77 countries. This number increased to 4,858 as of June 1. At the end of that month, the number of crypto machines in the world grew to 5,011.
Topping the list for countries with the most crypto machines is the United States. The US houses over 60 percent of the world’s crypto ATMs. Closely following the US is Canada, with about 12.4 percent. So, North America is responsible for 70 percent of the world’s cryptocurrency ATMs. On the other hand, Europe houses 22 percent of these machines.
Fees involved, Maxim Bederov
From the perspective of a finance professional, any service that is as quick and fast as this is hardly for free. The services and convenience that comes with cryptocurrency machines come with a price. For instance, the average buy fee on Bitcoin ATMs is 9.46 %, while the average payment for a sell order for your cryptocurrency at the machine will cost you about 8.06 %.
Moreover, Bitcoin ATMs are more or less like traditional ATMs. So, they connect to a specific bank account to allow users to carry out a purchase of bitcoin without cash. Based on a statement made by finance professional agency, the US Consumer Financial Protection Bureau, ATMs “may also charge high transaction fees – media reports describe transaction fees as high as 7% and exchange rates $50 over rates you could get elsewhere.”