Swampscott Liquors, in Humphrey Plaza, has installed a cryptocurrency exchange ATM, or crypto kiosk, bringing access to the new form of digital asset to Swampscott residents.
“Crypto kiosks serve as an important bridge between the physical and digital world, using a familiar experience to allow hundreds of thousands of people around the world to participate in the digital economy,” a spokesperson for CoinFlip, the company which operates the ATM, told the Swampscott Tides.
Crypto ATMs work differently from traditional bank ATMs due to the functional differences between cryptocurrency and flat currency like the United States dollar. A regular ATM connects to a bank account and lets people withdraw money held there. The money in bank accounts hold value because it is issued by the federal government.
A crypto ATM, on the other hand, doesn’t connect to a bank. It links to a crypto wallet, sometimes called a digital wallet, where cryptocurrency “lives.” The wallets can be found in apps, websites and even physical hard drives.
Cryptocurrency is stored just like any other data. Instead of a dollar or coin, the user receives a series of randomized zeros and ones to their chosen device. Cryptocurrency exists only online and isn’t printed.
“CoinFlip plays a vital role in the rapidly expanding global digital economy by empowering consumers to participate in this emerging financial ecosystem,” the spokesperson said. “Just as banks offer physical locations as well as physical ATMs, it makes sense that cryptocurrency would also have a corresponding physical infrastructure.”
Many crypto ATMs, including the one located inside of Swampscott Liquors, is a buy-only crypto kiosk. This means users can purchase cryptocurrency using cash at the ATM, but they cannot turn their cryptocurrency back into cash at the location.
The risk in this, however, is that crypto ATMs are oftentimes only one-way exchanges, meaning if the wrong cryptocurrency is bought or sent to the wrong wallet, it might not be easily recovered.
The FBI also reports that cryptocurrency is often used to commit scams, particularly targeting older adults and people unfamiliar with the technology. It is difficult to trace, and it is nearly impossible to reverse any transactions.
It is volatile as well, with the value of even the most popular cryptocurrencies often jumping up and down without warning, similar to the stock market.
