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Some bitcoin ATMs allow the exchange from bitcoins to paper money. Since waiting in front of an ATM for a confirmation is not feasible, they must defend themselves in another way against double-spends. How do they do that?
How are Bitcoin ATMs secured against double-spends?
Answers
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I can't talk about other ATMs but in BTCPoint (The Bticoin ATM of Barcelona) works the following way:
- The user want to SELL bitcoin
- The bitcoin machine provides a fresh new public address for the transfer
- The user sends the bitcoins to that address
- Bitcoin network detects the transfer sent and issues a ticket with a confirmation code
- The user waits for some minutes while the transaction is confirmed (the ATM can be used by other people)
- After some confirmations the user scans the "ticket with the confirmation code" in the QR reader.
- The ATM validates the confirmation and gives money out if everything is valid.
Check out the operations in: http://www.btcpoint.org
For some extra security (camera recording the confirmation code in step 4.) the machine can be configured so that a PIN code is inserted. This PIN code is then required in step 6.
