The advent of the Automated Teller Machine (ATM) in the financial services sector was a welcome development especially to bank customers as it allowed them access to their funds outside the working hours of the bank as well as other value added services such as bank transfers, purchase of airtime e.t.c.
The emergence of Bitcoin ATM (BATM) is expected to boost crypto currency adoption by promoting the use of crypto currency as a viable alternative for use in transactions. The Bitcoin ATM offers the option of purchasing crypto currency via debit card and cash. The Bitcoin ATM did not get where it is today by accident. There has been consistent effort to make it available in the public domain despite the initial teeting challenges that any innovation usually encounters.
A brief on the origins of the BTM
In order to understand how far the Bitcoin ATM has come, it will be necessary to have a brief overview of the journey thus far. A Robocoin machine which opened on October 29, 2013 is regarded as the first Bitcoin ATM which the public could access. The machine was located in a Waves coffee shop in Vancouver, Canada. Sadly Robocoin hatlted operations two years later in 2015.
In the United States the first BTM came on stream on February 18, 2014. It was opened in a cigar bar in Albuquerque, New Mexico. It was however removed after 30 days while Europe's first BTM came online on December 8, 2013 in Bratislava, Slovakia.
Number and distribution of BTM's across the globe
From these humble beginnings, the number of BTM's have steadily increased over the years. Coin ATM Radar reported that there were 2,342 BTM's in the United States as at January, 2018. That number has reportedly leapt to over 9,000 as at August, 2020. Statistics reports that as at March, 2020 the number of BTM's across the globe stood at over 7,000.
In a report by CoinTelegraph, Nigeria often referred to as Africa's largest economy welcomed its first BTM in the first quarter of 2020 bringing to 8 the number of African countries that have now come on board the BTM revolution.
The breakdown according to CoinTelegraph of the number of BTM's per country in Africa is shown below:
South Africa 7
Ghana 2
Nigeria 1
Kenya 1
Uganda 1
Zimbabwe 1
Djibouti 1
Botswana 1
How BTM's work
Bitcoin ATM's generally work in two modes:
Unidirectional: supports either exclusively buying or selling crypto currency
Bidirectional: supports both buying and selling of crypto currency
For the unidirectional BTM's , the customer can either:
a. Sell BTC for fiat
b. Buy BTC for fiat
Bitcoin ATM's are not connected to bank accounts rather they are linked to crypto currency exchanges over the internet. The exchanges provide the platform for users to carry out crypto currency transactions.
BTM's work via a two phased or step protocol.
1. Identity verification
The potential customer must first verify their identity. The verification is initiated with the user inputing their mobile number to receive an OTP. Once the OTP is received, the customer has to provide some sort of identification such as a driver's license or international passport to be scanned by the BTM.
2. Purchase or sale of crypto currency
With verification completed, the customer or user can then proceed to buy or sell crypto currency. To buy, the user inserts cash into the BTM, generates a QR code from their cold wallet on their devices which the machine scans to send the crypto purchased to the buyer's wallet.
For sales, the user sends Bitcoin from their cold wallet to BTM by scanning the QR code provided by the BTM after which the BTM dispenses cash after processing the transaction.
The process of buying or selling crypto currency using a BTM is essentially a straight forward process which ought to be completed within a short period of time in the absence of any unforeseen challenges.
See reference links below for further reading about BTM's
https://en.wikipedia.org/wiki/Bitcoin_ATM
https://cointelegraph.com/news/nigeria-becomes-eighth-african-nation-to-welcome-bitcoin-atms
https://coinsource.net/how-to-send-cash-to-someone-using-a-bitcoin-atm/
https://coincloud.medium.com/what-are-bitcoin-atms-and-how-do-they-work-46543f52d8c8
https://blog.unocoin.com/how-do-bitcoin-atms-work-b774828bd9ad?gi=856147fb7722
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