Crypto ATMs: The Portals to the Cryptocurrency World
By Coinmatics on The Capital
Buying a cryptocurrency is still a problem for many since it requires an understanding of electronic systems and crypto exchanges, figuring out how they operate, delving into peculiarities of cryptocurrencies, which are not the easiest things to do.
However, Bitcoin or any other cryptocurrency can be bought for cash. Crypto ATMs are designed for this purpose. They are also called Bitcoin ATMs, Bitcoin terminals, Cryptomats, and so on.
They began to appear in Asia and North America in 2013, at the time of the so-called first cryptocurrency boom. Some of the famous developers like Lamassu have started their careers since then.
It is clear that the network will gradually be getting wider both geographically and quantitatively.
The devices are in demand because:
- People are now able to buy cryptocurrencies for cash fast.
- Cryptomats are promising for those in small business.
As for now, there are 6472 Crypto ATMs all over the world. The three-fourths of them are in North America, and one fifth is in Europe.
In the USA, the largest shopping malls and airports are equipped with Crypto ATMs.
According to the report published by ResearchAndMarkets.com, the global crypto ATM market is projected to grow at a CAGR of 46.60% to reach US$183.779 million by 2024. The authors believe that it will be a growing popularity of cryptocurrencies that will be encouraging such a swift promotion of Cryptomats.
Structure of a Crypto ATM
They appear similar to classic ATMs and terminals. Their operational principles are similar as well. The main purpose of the devices is to sell cryptocurrencies for cash.
The basic scheme of usage is the following:
- Choose a cryptocurrency type available to purchase, see its current price;
- Insert an amount of coin to buy, see their total cost with the fee added;
- Insert a wallet address or scan a QR code;
- Pay a required amount through the cash acceptor or with a card;
- Receive purchased digital coins on your wallet.
There may be some peculiarities in each step of the process. For example, some of the devices support QR scanning and making a transaction based on a phone number, which means that in this case, a customer can put a smartphone with a launched cryptocurrency wallet on to the device instead of inserting the address manually.
There are crypto ATMs with in-built fingerprint-scanners for verifications.
- Choose a cryptocurrency and enter into a supply contract;
- Enter an agreement on the installation of an ATM in a shopping mall or another crowded area;
- Set up software and connect an ATM to an exchange;
- Organize a regular cash collection;
- Monitor the business via a smartphone app.
Some Cryptomats have accounts in which customers make internal transactions; others are synchronized with cryptocurrency exchanges. A customer creates or uses an exchange account to make a trade.
There are one-way, two-way, and universal ATMs. The first type Cryptomats are for purchase only; the second is for buying and selling; the universals perform not only this functions with BTC and other coins, but also support cryptocurrency payments for goods and services.
The bill passed by the German parliament on November 29 has become an important step in the development of the cryptocurrencies. It allows financial institutions to buy and sell crypto. The law has entered into force since January 1, 2020. German banks are now authorized to store, exchange cryptocurrencies, and build up an infrastructure of the new area.
Sven Hildebrandt, a representative of a German blockchain project called Distributed Ledger Consulting, expressed an opinion that Germany will become a “crypto-heaven”.
The Association of German Banks supports the initiative too. According to the organization, the legalization of the cryptocurrency transactions will make the field more transparent and allow German people to invest in digital money safely.
In this regard, Crypto ATMs look like an effective instrument for conquering the nascent European crypto market. It is the banks who would become the main beneficiaries.
Another important legal issue is compliance with the KYC and AML standards forming a regulatory basis for the classic financial system, including baking.
The Cryptomats, as a class of user devices, have turned out to be one step ahead — they are equipped with an in-built scanner for documents, which simplifies the identification process drastically.
To verify a client, Crypto ATMs use all possible technological solutions such as verification of a telephone number, reading the ID and credit cards data, taking photos and/or videos of both a document identifying a person and a person holding these documents, a face recognition, and a fingerprints scanner.
Moreover, manufacturers of the kiosks partner with cloud services providing digital authentication of a customer. It simplifies and standardizes the verification process, making it more favorable for the development of the business.
Advantages of cryptomates in banking
- It is a brand-new branch of the financial industry, which allegedly will overtake the current financial system in terms of both volumes and popularity.
- It solves one of the main cryptocurrency problems (namely underdevelopment of UX and a user environment in general), which provides new players with a competitive edge.
- It grants leading positions in the financial and legal regulation of cryptocurrency-connected operations. The compliance of KYC and AML is provided by state-of-art technological solutions.
The fact that Germany gave cryptocurrencies legal status can be seen as an additional bonus — the country makes way for the cryptocurrency industry to grow. Entrepreneurs are interested in the perspectives of the new and probably the most promising financial niche.
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