A Bitcoin ATM is a kiosk that allows a person to exchange Bitcoin and cash. Some Bitcoin ATMs offer bi-directional functionality enabling both the purchase of Bitcoin as well as the sale of Bitcoin for cash. In some cases, Bitcoin ATM providers require users to have an existing account to transact on the machine.
Bitcoin machines are not ATMs in the traditional sense and probably use the wording ATM as a neologism. Bitcoin kiosks are machines which are connected to the Internet, allowing the insertion of cash in exchange for bitcoins given as a paper receipt or by moving money to a public key on the blockchain. They look like traditional ATMs, but Bitcoin kiosks do not connect to a bank account and instead connect the user directly to a Bitcoin exchange. According to an advisory issued by the Consumer Financial Protection Bureau, "they may also charge high transaction fees – media reports describe transaction fees as high as 7% and exchange rates $50 over rates you could get elsewhere".
History of these atm -
On October 29, 2013, a Robocoin machine opened in the Waves coffee shop in downtown Vancouver, Canada.[2] This machine is understood to be the world's first publicly available Bitcoin ATM. Robocoin ceased operations in January 2016.[3] Some Robocoin machines have since then been converted to run other software.[4] The first machine in the United States went online on February 18, 2014, in a cigar bar in Albuquerque, New Mexico.[5] It was removed 30 days later.[6] In April 2014, Coinme became the first Bitcoin ATM provider with a money transmitters license installing a unit in Belltown in Seattle, Washington.[7] A New Zealand bitcoin machine operator announced in 2014 they had to shut-down operations due to interference with banks.[8] In 2014 a former Robocoin operator in the UK hacked its bitcoin ATMs to run on software from rival manufacturer Lamassu.
Bitcoin ATM operators need to adjust the limits on deposits and withdrawals according to AML/KYC standards applicable in the jurisdiction where their ATMs are placed. Many Bitcoin ATM companies have full compliance departments set into place in order to follow federal regulations as well as to implement standard KYC protocols. [14][15] In some countries / states this requires a money transmitter license.