In tough economic times, businesses look for new avenues to explore, and one of them has been bitcoin — which is why convenience store operators are curious about bitcoin ATMs.
Bitcoin is a decentralized digital currency. It can be transferred on a peer-to-peer bitcoin network. Transactions are verified and recorded in a publicly distributed ledger called a blockchain.
Some economists and entrepreneurs have praised bitcoin for its accessibility and liquidity, as well as for the user anonymity and transparency it provides. They also like its relative independence from a central authority and the seductive possibility of high returns. Critics cite what they see as bitcoin’s volatility, relative lack of government regulation, limited use and irreversibility.
A standalone bitcoin ATM is a type of kiosk that permits users to buy bitcoin and other types of cryptocurrencies using cash or a debit card. Interestingly, a bitcoin ATM is not really an ATM, although they resemble them. Unlike ATMs, they do not dispense cash or connect to a bank account. Instead, they allow the user to plug into the bitcoin network or wallet to buy crypto tokens with deposited cash. Some terminal providers insist that users already have an account in order to conduct transactions.
More convenience store retailers are seeing an advantage to adding bitcoin ATMs to their stores to appeal to a growing customer base of customers who conduct cryptocurrency transactions and as they look to increase their financial services to customers.
Bitcoin ATMs come in two varieties: uni-directional and bi-directional. Roughly 70% of bitcoin ATMs worldwide are uni-directional, and nearly 80% are located in the U.S. Each, however, connects to cyberspace to permit users to make cash purchases or to sell bitcoin. Transaction fees generally range from a low of 6.5% to as much as 25%.
The terminals are most often owned and operated by firms that are actively part of the crypto industry. Less frequently, they are operated by a firm with a proprietary trading platform or wallet.
Bitcoin ATMs are also said to be quite safe. Anyone who operates one has to register with the Financial Crimes Enforcement Network (FinCEN). In addition, the operator will need to comply with anti-money laundering provisions of the Bank Secrecy Act (BSA). The cryptocurrencies can be sent only once the customers has shared key information — passwords and a QR (quick response) code, for example. Following a purchase, a transaction receipt is sent to the customer’s wallet.