Bitcoin ATMs

Bitcoin ATMs – A Beginner’s Guide

Bitcoin ATMs allow the purchase and sale of Bitcoin with cash and with relative anonymity. In this post, I’ll cover the different ATMs around, their pros and cons and also show you how to find a Bitcoin ATM near your home.

Bitcoin ATM Summary

Bitcoin ATMs, also known as BTMs, are machines that accept cash and dispense Bitcoin in return. Some ATMs also buy Bitcoin from you and dispense cash in return.

That’s Bitcoin ATMs in a nutshell. If you want a more detailed review about BTMs keep on reading, here’s what I’ll cover:

1. What is a Bitcoin ATM? 
2. How to Use a Bitcoin ATM? 
3. Best Bitcoin ATMs 
4. Bitcoin ATM Manufacturers
5.  Bitcoin ATM Locations 
6. Operating Your Own Bitcoin ATM
7.  Conclusion

1. What is a Bitcoin ATM?

A Bitcoin ATM acts like a physical Bitcoin exchange where you can buy and sell Bitcoins with cash. The world’s first Bitcoin ATM was opened on October 29, 2013, at Waves Coffee Shop in Vancouver, Canada. The device is often comprised of a scanner, a cash dispenser, and a computer to manage the transactions.

How Bitcoin ATMs Work

                
Bitcoins are dispensed either to the buyer’s own Bitcoin wallet (via scanned QR code on the buyer’s mobile device or paper wallet) or to a paper wallet generated and printed by the ATM at the time of purchase.

The price of the purchase is dependent on current Bitcoin exchange rate, which the ATM retrieves from the internet in real-time. Also, an additional percentage fee is charged by the ATM for the service and factored into the price.

Do Bitcoin ATMs Give Cash?

Some BTMs work both ways – meaning they can dispense Bitcoin in exchange for cash and they can also dispense cash in exchange for Bitcoin. However, most models work only for buying Bitcoin.

How much fee do Bitcoin ATMs charge?

Bitcoin ATMs charge an average fee of 8.93%. However, this is a rough average and the fees vary between ATMs. Make sure to read the instructions on the machine before starting the process.

2. How Do I Use a Bitcoin ATM?

While each BTM is different, the buying process in all of them is basically the same:

1. Choose “Buy Bitcoin”
2. Scan the QR code of your Bitcoin address with the BTM scanner
3. Depending on the ATM and jurisdiction, you may need to provide identification
4. Enter the amount you want to purchase
5. Insert cash to the BTM 
6. Wait for the machine to process the transaction
7. Check your Bitcoin wallet for the transaction confirmation

The process of selling Bitcoins to a Bitcoin ATM is much more diverse and depends on the specific BTM, however, these machines are pretty intuitive to use so just follow the instructions on the screen.

3. Best Bitcoin ATMs

General Bytes

General Bytes, a Czech based company, is the world’s largest Bitcoin, Blockchain and Cryptocurrency ATM manufacturer. The company has sold over 2500 machines in over 60 countries.

Their Bitcoin ATMs can support over 120 different fiat currencies and over 60 different cryptocurrencies. The company manufactures two main BTM models:

BATMTWO

This ATM model is designed to be securely mounted on a wall or optional stand. It supports only buying cryptocurrencies and has a built in finger scanner for AML/KYC compliance. The BATMTWO costs around $3249.

BATMTHREE

A 23″ FullHD display fully mounted BTM. This Bitcoin ATM offers both buying and selling of Bitcoins and other cryptocurrencies. The BATAMTHREE costs around $7,499.

Genesis Coin

Genesis Coin Inc., based in San Diego US, is the second most popular Bitcoin ATM manufacturer. The company supplies three different BTM models:

Genesis1

A 2-way Bitcoin ATM (buy and sell) packed with additional features such as a bill validator, barcode scanner, EMV card reader, fingerprint reader (optional) and a thermal printer. The Gensis1 costs $14,500.

Satoshi1

The Satoshi1 comes in both a 1-way or 2-way model. This machine is much smaller than the Genesis1 and has a 21’’ screen, a high definition camera and an optional fingerprint scanner. The Satoshi1 costs $6,800.

Finney3

The Finney3 is the newest and smallest BTM from Genesis Coin. This 1-way BTM has a 21’’ screen and similar features as the Satoshi1, only it’s smaller and should be mounted due to its size. The Finney3 costs $4,500.

Lamassu

Lamassu, a Switzerland based company, is the oldest BTM manufacturer around (since 2013). Lamassu machines are open-source and support Bitcoin, Zcash, Ethereum, Bitcoin Cash, Litecoin, and Dash. You can add additional coins manually if needed. Lamassu has four different Bitcoin ATM models:

Gaia

Designed to be wall-mounted or table-mounted and weighing only 25 kgs, Gaia can fit into a flight case. Gaia is a buy only Bitcoin ATM and it costs €3600.

Sintra

fabricated from sheets of 2.5mm steel and an all-glass user interface, the Sintra has a custom computer board with battery backup, 3G connectivity, tamper sensors, and front door control. This is a1 or 2-way Bitcoin ATM that is beautifully designed. The 1-way model costs €6,200 while the 2-way model costs €7,500.

Sintra Forte

the Sintra Forte is about 20% larger than the Sintra and includes a vault controlled by an electronic lock. The vault is constructed from 6mm hardened steel and contains the note validator, note dispenser, and computer board. This BTM also comes as a 1-way (€7,700) or 2-way (€8,900).

Douro II

The Douro II is the newest model from Lamassu. As in the larger Sintra, the new Douro II utilizes a custom computer board with battery backup, 3G connectivity, and tamper sensors. This 1-way BTM costs €5,200.

4. All Bitcoin ATM Manufacturers

There over 40 Bitcoin ATM manufacturers. Here’s a list of all of them

1. General Bytes
2.   Genesis Coin
3.  Lamassu 
4. BitAccess 
5. Coinsource
6.  Covault 
7. Order Bob ATM 
8.  Digital Mint 
9. Shitcoins Club
10.   Coinme
11.  Sumo ATM
12.   Bytefederal
13.  zzBit
14.  wBTCb
15.  RusBit
16.   BTC facil
17.   BBFPro
18.  Bcash Greece Inc
19.  Intellogate
20.  BitTeller
21.   Bitstop 
22. ChainBytes 
23. Bitnovo
24.  Vault Logic
25.   Trovemat
26. CoinLogiq
27. BTCRiot
28. Criptec 
29.  Open Bitcoin ATM
30.   Criptomat 
31.  DOBI ATM
32.  Coin Capital
33. CryptoMat 
34. CryptoMatic ATM 
35. CryptoGo 
36. BitOcean 
37. Bitcoin Já 
38. BitVending
39.  Coinplug
40. Fastcoin ATM 
41. Virtual Crypto

5. Where Can I Find a Bitcoin ATM?

Here’s a complete list of Bitcoin ATMs around the world, courtesy of CoinATMRadar. Just find your location and see where is the nearest Bitcoin ATM to you.

The map also allows you to search for Altcoin ATMs if you want to buy/sell other cryptos. Each ATM takes a certain commission from the trade which varies from one device to another, so make sure you’re aware of the fees which are usually stated on the machine.

6. Regulations for Operating a Bitcoin ATM in the US

Below are four key elements around which you can build your compliance strategy, prior to launching a Bitcoin ATM:

Research money transmitter requirements in the state of operation

It’s important to understand that some states are friendlier to bitcoin ATMs, or bitcoin in general, than others. This could mean the difference between a comprehensive and costly state licensure process and an exemption under state money transmitter law.

The differences are as vast as they are ever-changing. States continue to evolve their application of existing and antiquated money transmission law.

As we speak, several states have pending legislation aimed at redefining money transmission, so as to accommodate bitcoin companies.

That said, it’s vital to understand the requirements in your state. For starters, the non-profit bitcoin research and advocacy group, Coin Center, offers a helpful real-time state regulatory tracker. 

Register as a money services business (MSB) with FinCEN

It might be difficult to believe, but registering with FinCEN, the nation’s top money laundering watchdog, might be the easiest compliance task. It’s literally a “check-the-box” activity. Indeed, in contrast to the permission-based state licensure process, at the federal level, entities merely register with FinCEN via online portal.

The process can typically be completed in under an hour. While registering with FinCEN is a simple exercise, it comes with much responsibility. By checking the boxes, so to speak, you are agreeing to be regulated by FinCEN and thus to meet certain requirements to the satisfaction of regulators.

This includes, among other things, registering at the state-level, if applicable; developing and implementing an anti-money laundering (AML) program; retaining certain transactional information; and, reporting suspicious activity and transactions over $10,000.

Implement an anti-money laundering (AML) program

FinCEN regulation requires implementation of a written AML program. An effective AML program is one designed to prevent your bitcoin ATM from being used to facilitate money laundering activities. Each AML program must be in writing and address, at minimum, the “four pillars” as follows:

1. Incorporate policies, procedures, and internal controls reasonably designed to assure compliance with the Bank Secrecy Act (BSA) 
2. Designate a compliance officer responsible for day-to-day compliance with the BSA and AML program. 
3. Provide ongoing, targeted training to appropriate personnel concerning their responsibilities under the AML program. 
4. Provide for an independent review or audit of your AML program on an annual basis, at minimum.

Test your AML program

Start by running some sample transactions from your bitcoin wallet through the terminal(s). Be sure to test your thresholds to ensure that proper know your customer (KYC) requirements are triggered, as well as any “red flag” indicators of potentially suspicious or unusual activity.

Be sure to confirm that customer and transaction information is properly obtained and recorded. In so doing, document your findings, especially any subsequent changes to your AML program as a result of this testing.

7. Conclusion

Bitcoin ATMs are a very convenient way to buy and even sell Bitcoins very quickly and sometimes even anonymously. While most BTMs operate more or less the same, it’s always recommended to check for the fees on the BTM you’re planning to use.

Also, as a precaution, I’d even video the whole buying process so you’ll have proof if something goes wrong.

A special thanks to Joe Ciccolo, the founder & president of BitAML for adding his knowledge about Bitcoin ATM regulations. He can be reached at joe@bitaml.com. Have you had any experience with Bitcoin ATMs? I’d love to hear it in the comment section below.  

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