Bitcoin Plug is the name of a network of Bitcoin ATMs in Los Angeles. Bitcoin ATMs allow the customer to buy Bitcoins through a computerized interface. In addition to offering Bitcoins for purchase, Bitcoin Plug also allows users to sell their Bitcoins in select locations throughout their network.
So far, the company has released 22 Bitcoin ATMs in Los Angeles with plans for more throughout the United States.
What Is A Bitcoin ATM?
A bitcoin ATM is an online machine that permits a person to exchange bitcoins and cash. Some Bitcoin ATMs offer bi-directional performance; these machines empower both the buy of Bitcoin in addition to the redemption of Bitcoin for cash. Sometimes, Bitcoin ATM providers require users to have an existing account so as to transact on this machine.
Bitcoin machines aren't ATMs in the traditional sense and probably use the wording ATM as a neologism. Bitcoin kiosks are machines that are connected to the web, allowing the insertion of cash in exchange for bitcoins given as a paper reception or by transferring money to a public key on the blockchain.
They look like traditional ATMs, but Bitcoin kiosks do not connect to a bank account and rather connect the user directly into some Bitcoin exchange. According to an advisory issued by the Consumer Financial Protection Bureau, “they may also charge high transaction fees — media reports clarify transaction fees as high as 7 percent and exchange rates $50 more than rates you could get elsewhere”.
How Do The Bitcoin Plug ATMs Work?
The consumer feeds in USD and this and generates a QR code out of their wallet — a QR code being a massive square of white and black pixels. Then the consumer sends the Bitcoins to the presented address.
Bitcoin Plug ATMs are basically money transmitting instruments and as such the businesses come under FinCEN rulings and have to comply with Know Your Customer and Anti Money Laundering processes, or AML and KYC.
Typically prices are in the range of 5% and quoted prices are taken from big exchanges on a live basis. The company will attempt to manage its cash and Bitcoin exposure by balancing its own inputs and outputs through trading with its foreign exchange — holding too much Bitcoin without hedging could introduce the possibility of large losses or profits. Other issues include banking centers as it's been extremely hard for bitcoin related businesses to get conventional banking facilities — thus moving money in and out can be problematic — hedging utilizing different Bitcoin futures may be one means of mitigating risks entailed due to volatile price changes.
Use Of Bitcoin ATMS
Although the first users of Bitcoin are aficionados and fans, there are persuasive arguments for the spread of Bitcoin ATM's. 1 key use is for travelers if confronted with high prices at traditional bureau de changes — so purchase bitcoin before the flight and sell it afterwards — although with 5% fees either way that is quite risky.
Another possible use for is permitting the unbanked to acquire access to digital currency and partake in international eCommerce. Essentially giving them the chance to become their very own global bank as the spread of Bitcoin and crypto money reaches all corners of the world.