The first bitcoin ATM in South America will be up and running at Brazil's largest technology and innovation event next week.

The machine that will be in operation at Campus Party in São Paulo was imported by Brazilian company Mercado Bitcoin at a cost of $10,000 - the equivalent of 11.5 bitcoins - and was designed and manufactured in Portugal by Lamassu.

It is a mix of conventional ATM and vending machine, whereby users put in normal currency and receive bitcoins back via a mobile phone app using a QR code that is scanned by the equipment.

Only Brazilian reais will be accepted by the equipment and the transaction fee charged by Mercado Bitcoin is 2.5 percent.

Thousands of people are expected to attend the week-long tech fest, but the company behind the initiative says it does not have an approximate figure of how many people might use the machine.

"We hope that the machine will pay itself by the end of this year, but we still have no references around the number of transactions it will generate," Rodrigo Batista, chief executive at Mercado Bitcoin, told newspaper O Estado de São Paulo.

According to Mercado Bitcoin, the next location of the equipment is still unknown, but talks are ongoing around moving it to one of São Paulo's financial centers.

Currently, Canada is set to become the top bitcoin ATM location in the world, with three cities in the country to have the machines installed in the coming weeks in Ottawa, Montreal and financial hub Toronto.