Cryptomats: what they are eaten with and where they live

Cryptocurrencies are becoming more deeply integrated into our lives every day and, along with the usual payment terminals and ATMs, crypto ATMs have begun to appear on the streets of large cities. Let's try to figure out why they are needed and how to use them.

What is a cryptomat?

Until some time, investing in cryptocurrencies was the lot of a select few, and buying cryptocurrency for people far from information technology seemed something completely inaccessible. After all, in order to buy cryptocurrency, you had to register on the exchange, go through a rather complex verification procedure, deposit money into your exchange account (often paying a considerable commission), perform a trading operation, and then withdraw the purchased cryptocurrency. 

All this took too much time, effort and nerves for a one-time operation. There is also a simpler and faster, but somewhat riskier way - to use the services of exchange offices or private money changers. With the advent of crypto ATMs, the task has become much easier and has opened the door to cryptocurrency investing for absolutely everyone.

Every year there are more and more crypto ATMs. According to the website Coin ATM Radar as of the beginning of 2017 there were just over 1000 of them. Now there are more than 3900 crypto ATMs installed around the world. Unfortunately, Coin ATM Radar does not always keep up with the rapidly growing network of crypto ATMs, so the real number is much larger. Also, more and more of them support working not only with Bitcoin, but also with other popular cryptocurrencies such as Bitcoin Cash, Ethereum, Dash and Litecoin.

Technically, cryptomats are specialized payment terminals for conducting transactions with cryptocurrencies for cash. In the simplest case, a cryptomat only allows you to buy cryptocurrency for cash. More advanced cryptomats also allow you to sell it.

How to buy cryptocurrency in a cryptomat?

Buying cryptocurrency is quite simple.. Depending on the developer and the software installed on the cryptomat, the procedure may differ slightly, but the general scheme remains the same:

• the client selects the currency he would like to purchase;
• the crypto machine scans a QR code from your phone or a piece of paper with the address where the purchased cryptocurrency will be transferred;
• the client deposits cash through the bill acceptor and sees the current conversion rate, the amount in cryptocurrency that will be transferred to his address, as well as system and cryptocurrency network commissions;
• after the transaction is confirmed by the client, the system finds the best open counter order on the exchange to which the crypto ATM network is connected, and buys it, fixes the price and sends the cryptocurrency to the client’s address.

The purchase rate can be fixed either at the time of creating an application for the most profitable open counter order on the exchange used by the crypto machine, or at the time of the actual execution of the transaction. Some crypto ATMs are connected to several exchanges at the same time, which allows the client or operator to choose the most profitable rate.

Thanks to this scheme for carrying out the purchase procedure, the client sees the incoming transaction on his wallet almost immediately after it is confirmed at the crypto machine and can manage his funds as soon as the transaction receives the required number of confirmations from the network.

Well, how to sell cryptocurrency through cryptoamt?

The sale of cryptocurrency occurs in two stages. At the first stage, the client specifies the transaction amount and, if necessary, goes through a verification procedure. After which the system issues both on the screen and in the form of a check a QR code with the address for transfer and the exact amount. The user also receives a receipt with a QR code for receiving funds. At this stage, the client needs to transfer the exact amount to the received address within a certain short time. After the transaction receives the number of confirmations from the cryptocurrency network required by the rules of the crypto machine (usually two confirmations), the client can proceed to the second stage - go to the crypto machine, scan the code for receiving funds and withdraw your cash, as in a regular ATM..

When performing any operations with cryptomats, do not forget to pick up a receipt confirming your operation, because only if you have it support service of the cryptomat network will be able to help you find a lost payment.

What about Know Your Customer and Anti Money Laundering?

In most countries, legislation requires identification of the initiator of a cryptocurrency transaction above certain amounts. Therefore, most crypto ATMs simply limit clients by the maximum amount of the transaction and do not conduct any verification of their clients. However, there are users who want to make transactions for large amounts and there are countries that require an identification procedure for any amounts. This quite acutely raises questions about the technical side of user identification. This procedure usually includes verification of a telephone number, reading ID card, credit card data, photo/video recording of both individual identification documents of the user and the user himself with documents in his hands, recognition of the user’s face or fingerprint. To solve this complex technical problem, cloud services for digital user identification come to the rescue, for example Shufti Pro, which is already trusted by many financial institutions. Such services take care of collecting information about the client and issuing an opinion on the status of his verification, which makes life much easier for crypto ATM operators.

Who produces crypto ATMs?

In the CIS countries, cryptomats are most often created by simply modifying standard payment terminals. Thus, relatively recently, the company Cryptomat entered the crypto ATM market in Ukraine, developing an accessible software package for working on existing low-cost hardware solutions. There are companies in the Western market that produce ATM machines specifically aimed at working with cryptocurrencies. For example, one of the market leaders, Genesis Coin Inc offers a bidirectional solution Genesis1 and flexibly configured into a one- or bidirectional machine Satoshi1 with prices ranging from $6800 to $14500 for a ready-made solution.. In addition to Genesis Coin, General Bytes launched the production of crypto ATMs, offering a cheaper, but wider configurable line of varieties of multi-currency crypto ATMs (ATM, payment terminals, etc.) running on Android. There are also smaller but equally high-quality manufacturers such as Lamassu, BitAccess and Coinsource, but at the moment they only have a small share of the market.

How to find a cryptomat?

The fastest way to find the nearest crypto ATM is to use the interactive map on the website Coin ATM Radar, which has been collecting and systematizing information about the location of crypto ATMs around the world for several years and the services they provide, manufacturers of crypto ATMs and their operators.