Quote from: Darker45 on August 06, 2025, 01:54:50 AM

2. This setup seems to take away the 'automated' in ATM. Imagine loitering around waiting for the confirmation, or going back to the ATM after several hours to get back the cash because the order wasn't filled. I think it defeats the very purpose of ATMs. Such machines are designed for instant transactions.

Good point. The machine I had in mind would still be automated (the cash could be taken in a single "slot", because it must be checked for counterfeit money, and then delivered to the compartment). Buying BTC at such an ATM could even be instant if you act as a "taker", i.e. you fill an order from a seller which already exist for that ATM. But of course, one of both parties (buyer or seller) will normally have to wait its order to be filled.

Regarding regulations, you're probably correct that even if this machine only custodies cash, it could be still "facilitating transactions" which is one of the reasons you could need KYC (but see below for an example with MiCa). The goal would be to make this machine as close as possible to a simple locker. I could also imagine a simpler design where you indeed have only a series of lockers with a mechanism to prove the authenticity of the cash, but all the technology which connects to the P2P exchange would reside in a smartphone app.

[edited this sentence as I had crippled it in the first version due to a fail when I quoted the next paragraph Wink

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Quote from: DubemIfedigbo001 on August 06, 2025, 04:02:52 AM

In all happening I did not see the provision for the company offering such services getting incentive from the whole buildup, unless of course the cash vault releases slightly less the amount to the seller as a fee, secondly in a country that taxes crypto transactions, would you deduct the tax from your design before handing the cash to the seller assuming there is no way his identity is saved?

That's indeed a point which has to be taken into account. Collecting the fee could be a challenge. A very simple setup could be to collect the fees by collecting coins or small banknotes like $1. Wink

Of course that doesn't look very user friendly.

A better idea is probably to create a transaction format at the connected P2P exchange where the Bitcoin seller can send the fees to the ATM company in an additional output, and only if this format is used, the ATM would accept it. Best option is probably to use Lightning anyway to avoid blockchain bloat. This does not mean the seller pays all the fees, as the exchange rate can be adjusted in a way the buyer would also get slightly less than the value of the cash they deposit.

Regarding taxes, in most countries that tax doesn't have to be deducted automatically, it is the seller who has to report his profits from the operation to the authorities. Would be basically the same as if you're using a P2P exchange.

Quote from: odolvlobo on August 06, 2025, 04:33:04 AM

I'm not an expert, but I don't believe the need for an ID at an ATM has anything to do with custody, and all about AML. When do they hold your bitcoins/money for you? Don't you put money in and it sends bitcoins to your wallet? I have never used one, so please enlighten me.

Like instant exchanges, an ATM holds your Bitcoins for a very short time -- from the moment you have deposited cash, the contractual obligation of the ATM is to deliver you the coins, and while the cash is checked and processed, the BTC are delivered a moment later. That is probably already "custody". At least that's my understanding, I may be wrong ...

MiCa (European regulation) lists the services you a crypto service provider subject to the regulation according to a summary provided by Google Gemini:

Quote from: MiCa according to Gemini

1. Custody and administration of crypto-assets for others.
2. Operating a trading platform for crypto-assets.
3. Exchanging crypto-assets for fiat currency or other crypto.
4. Executing orders for crypto-assets on behalf of clients.
5. Placing crypto-assets.
6. Receiving and transmitting orders for crypto-assets.
7. Providing advice on crypto-assets.
8. Managing crypto-asset portfolios.
9. Transferring crypto-assets for client

Apart from 1 which isn't the case in this theoretical machine, 2 is also not the case, because the trading platform is a P2P exchange not provided by the ATM company, neither is 3, because the ATM company itself doesn't exchange the assets.

4 and/or 6, "executing/transmitting orders for crypto-assets on behalf of clients", could apply on a first glance, but I think it is also not necessarily the case because the order itself is still executed P2P and the ATM company does not transmit the order. All the ATM company has to do is to signal the BTC seller "the cash was deposited".

It would be a slight challenge to circunvent the part of 6 which says "receiving orders". Of course that would probably the case if you use a tablet-like interface and the ATM receives and places your order on the P2P exchange. But if you download an open source app to your phone and place your order there, then the ATM itself doesn't receive nor transmit nothing.

7, 8, and 9 don't apply either, as the ATM company doesn't manage nor transfer crypto-assets at all.

The machine I'm having in mind could be described more as a "trustworthy locker", i.e. where the company guarantees that the cash was really deposited, which can broadcast messages (to the P2P exchange). Basically it's an automated helper for OTC cash trading.