How does Bitcoin ATM Work?

Canada (in fact World) has got its first Bitcoin ATM machine. The ATM seems to be a giant step for wider acceptability of Bitcoin. If you are still wondering what is Bitcoin then read Basics of Bitcoin. As per preev, 1 Bitcoin is equivalent to 200.2 USD or 209.5 CAD.

Pre-requisite for using ATM

A person needs to have his personal bitcoin wallet and know his bitcoin address or QA code for quick scanning. Bitcoin address is a location one’s personal computer or hosted on another server that will retain the cryptographic numbers that correspond to bitcoins. Withdrawl and Deposit transactions marked with bitcoin address is transmitted to all bitcoin users who further authenticate and put the transactions in sequence to make transaction permanent.

Since there is a limit on number of transactions and amount of transactions that a person may conduct, ATM uses biometric security.

  1. Flash your hand to ATM.
  2. Flash your government issued photo id card to machine.
  3. Smile at the machine. ATM will match your face to the photo in id card.
  4. ATM will validate the three identities to ensure that there is no mismatch from previous transaction and validate that customer is still within limit to conduct transaction. The transaction will still remain somewhat private, the biggest feature of Bitcoin.

 

ATM Machine with Palm Scanner [Image courtesy of Chris 73 / Wikimedia Commons]

ATM Machine with Palm Scanner [Image courtesy of Chris 73 / Wikimedia Commons]

Deposit bitcoin (Convert CAD to Bitcoin)

If one wants to deposit bitcoins i.e. convert CAD to bitcoin then person will need to

  1. Choose Deposit bitcoin option

  2. Insert currency notes (CAD)
  3. Flash QR code of bitcoin wallet or type in bitcoin wallet address
  4. Confirm transaction
  5. Bitcoins will be purchased through Virtex and transferred to customer’s bitcoin wallet.

[youtube http://www.youtube.com/watch?v=uoiAewo5K7s]

Withdraw Bitcoin (Convert Bitcoin to CAD)

If one wants to withdraw CAD in exchange for bitcoins then person will need to

  1. Choose Withdraw bitcoin option
  2. Flash QR code of bitcoin wallet or type in bitcoin wallet address
  3. Choose the amount to be withdrawn
  4. Confirm transaction.
  5. Bitcoins will be sold through Virtex, customer’s bitcoin wallet will be updated and the machine will dispense CAD as cash to customer.

Conclusion

Bitcoin ATM is a step in the direction of making virtual currency Bitcoin equivalent to real currency. Such transformation will open up new avenues for all the inventions. Merchants and customers too will have additional means to exchange value (money in exchange for goods and services).

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