Despite looking like traditional cash machines, Bitcoin ATMs are not ATMs in the traditional sense. Instead of connecting to the user’s bank account, they are connected to the internet to facilitate Bitcoin transactions.
At their simplest, Bitcoin ATMs let you scan a wallet QR code and then sell BTC for cash. Bitcoin ATMs are located all over the world, and their locations can be easily found on the internet. However, they usually charge high transaction fees when compared with other methods. In addition, not every Bitcoin ATM offers both buy and sell functionality, which is important to keep in mind when looking for a Bitcoin ATM at which to sell BTC.
Sometimes, Bitcoin ATM providers require users to have an existing account to conduct selling operations, and the registration process often involves a lot of time, energy and effort. For example, new users may need to provide a telephone number for activation and notifications, a government-issued ID, a palm scan and a current photo taken by the ATM’s camera. The identification process varies depending on the machine and the operator running it, but some sort of identity verification will always be required if you want to sell Bitcoin.
Moreover, BTC ATM operators must adjust the settings on their machines in accordance with AML and KYC requirements applicable in the jurisdiction where their ATMs are placed. In some countries, this requires a money transmitter license, while current regulations in other countries prevent any Bitcoin ATMs from being installed.
After your identity is verified, you are given a QR code with a wallet address to which you need to send your Bitcoin. Depending on the machine you’re using, you will either get cash out of the machine immediately or you will receive a redemption code and will need to wait for the transaction to be confirmed on the Bitcoin blockchain. Usually, one confirmation is enough, but sometimes up to six confirmations are required before you can withdraw cash.