Bitcoin Automatic Teller Machines: Using Bitcoin ATMs To Buy And Sell Cryptocurrency
Bitcoin Automatic Teller Machines: Using Bitcoin ATMs To Buy And Sell Cryptocurrency. | Credit: Shutterstock
Key Takeaways
- Bitcoin ATMs provide easy access to buying and selling Bitcoin catering to newcomers and those without a stable internet connection or bank account.
- There are different types of Bitcoin ATMs, including one-way and two-way machines, offering different functionalities.
- Using a Bitcoin ATM involves verifying your identity, scanning a wallet QR code, and completing the transaction with cash or a card.
- To minimize fees when using a Bitcoin ATM, compare fees among different machines and choose one with the lowest fees.
Bitcoin ATMs (BTMs) are user-friendly machines that bridge the gap between traditional banking and digital currencies. BTMs provide easy access to Bitcoin (BTC) purchases, catered for those who wish to buy less than one Bitcoin without the use of a personal internet connection or a bank account. Bitcoin purchases using an ATM are ideal for newcomers seeking to stack sats (satoshis).
A satoshi is the smallest unit of measurement for Bitcoin, named after Bitcoin’s pseudonymous creator, Satoshi Nakamoto. One satoshi represents one hundred millionth of a Bitcoin (0.00000001 BTC).
BTMs can provide a user-friendly option for individuals who are new to the world of cryptocurrencies and want to learn about Bitcoin. It does this by prioritizing convenience, customer support and engagement with users who do not have access to a stable internet connection. Additionally, BTMs hold the potential to transform the current financial system and foster widespread cryptocurrency adoption via cryptocurrency ATMs.
What Are Bitcoin ATMs?
Bitcoin ATMs differ from traditional ATMs, which dispense cash to bank account holders. BTMs let users buy Bitcoin for cash/credit card, making it easier for unbanked people to access cryptocurrencies. Some also allow BTC holders to sell for cash via QR code from their wallet.
Now that we have a basic understanding of BTMs, let’s consider the history of BTMs throughout Bitcoin’s last decade of growth. Bitcoin ATMs date back to 2013 when the first machine was installed in Vancouver, Canada. Since then, the number has grown significantly worldwide, with over 40,000 machines in operation, with the United States boasting the highest concentration of machines.
Traditional ATMs and BTMs differ from one another in both practical and functional terms but also share some similarities:
- Both normally require users to verify their identity, typically through a government-issued ID or mobile number.
- BTMs require the users to have a digital wallet to store the purchased cryptocurrency and ATMs require a debit or credit card and a bank account.
- Users must scan a QR code of their wallet address and either insert cash or use a credit/debit card to complete the transaction.
- Once the transaction is processed, the corresponding amount of Bitcoin is sent directly to the user’s wallet.
BTMs of course are not as widely available as traditional ATMs with over 3 million traditional ATMs available worldwide which dwarfs the 40 thousand plus BTMs in 2023. Bitcoin ATMs also require users to have a basic understanding of cryptocurrencies and wallet management, whilst today the overwhelming majority of people are ATM users who know how to operate a traditional ATM.
Placing BTMs in strategic locations worldwide, and focusing on specific use cases like remittances, and providing customer support through human interaction are important goals these machines can offer to help push and promote widespread adoption of cryptocurrencies globally.
Types Of Bitcoin ATMs
Types of BTMs available can vary on the basis of their utility. One-Way Bitcoin Teller Machines provide a simple solution for users to purchase Bitcoin using fiat currency. Although they offer limited functionality, their straightforward operation makes them an attractive option for beginners who wish to get involved. In contrast, Two-Way BTMs offer greater versatility, catering to various users’ needs by enabling both the purchase and sale of Bitcoin in exchange for local currency.
The various types of Bitcoin ATMs that one might encounter during their interaction with BTC include:
How Do Bitcoin ATMs Work?
Now that we are starting to understand the intricacies of this topic and its use case you might be curious enough to delve deeper into understanding how a Bitcoin ATM works and how you can use a Bitcoin ATM for the first time to buy less than one Bitcoin from one of these machines. It is exciting to inform you that the machine fundamentally works pretty simply, by giving you two options:
- Cash in exchange for your Bitcoin (two-way BTM).
- Bitcoin in exchange for your cash (one-way and two-way BTM).
Before getting started with a step-by-step guide to using a Bitcoin ATM, it is important to understand that the exchange rate of your transaction will be based on the current market rate at the time of purchase. Keep in mind that it will be wise to buy Bitcoin when the price is at a favorable rate. This rate is subjective according to your risk tolerance and time preference for holding Bitcoin.
One may refer to this simplified step-by-step to understand how does a Bitcoin ATM works:
- Verify your identity: Depending on the ATM, you may be required to provide identification, such as a government-issued ID or phone number.
- Choose to buy or sell: Select whether you want to purchase or sell Bitcoin.
- Enter the amount: Specify the amount of Bitcoin you want to buy or sell.
- Scan your digital wallet QR code: Present your wallet’s QR code to the ATM scanner to ensure the Bitcoin is sent or received to the correct address.
- Insert cash or use a debit/credit card: If buying, insert cash or use your card to complete the transaction.
- Confirm the transaction: Review the details and confirm the transaction. The ATM will then process it, and your Bitcoin will be transferred to your wallet.
How To Locate The Nearest Bitcoin ATM To You
You might be wondering, whilst reading this article, is there a Bitcoin ATM near me?
To locate a Bitcoin ATM use Coin ATM Radar which offers a global map and details about the nearest BTM, with information, such as distance, fees, and transaction limits. BTM locator apps like “Bitcoin ATM Map ” or “CoinATMRadar” are also available for download on Android and iOS platforms. These apps use GPS-based searches to provide detailed information about BTM machines in the vicinity.
Beyond these resources, one may also utilize social media platforms and online forums to discover BTM locations and learn from other users’ experiences. Additionally, networking with Bitcoin enthusiasts can provide knowledge on the most convenient and user-friendly BTM locations.
Steps For Buying Bitcoin At A Bitcoin ATM
Buying Bitcoin from a BTM involves a similar experience when compared to using a traditional ATM. Here are the steps associated when specifically buying Bitcoin using a BTM:
- Find a BTM: Use CoinATMRadar or similar tools to locate the nearest BTM.
- Download a wallet app: To transfer the Bitcoin onto the wallet, download an app.
- Visit the BTM: If you are looking to buy Bitcoin using cash or card, ensure that you bring the required amount of cash, card and your smartphone.
- Choose ‘Buy Bitcoin’ on the BTM: Select this option on the BTM screen and follow the instructions.
- Verify identity: Provide a phone number or ID if the BTM requests the same.
- Scan wallet QR code: Show your wallet’s QR code for the BTM scanner.
- Insert cash or card: Put your cash or card into the BTM’s slot and follow the instructions on the screen.
- Confirm transaction: Check the BTM screen for correct details and confirm.
- Receive Bitcoin: The BTM sends Bitcoin to your wallet.
- Confirm the amount has been recieved: Verify the arrival of Bitcoin into the wallet app.
To protect yourself from scams, stay cautious and use trusted, secure Bitcoin wallet apps.
Steps For Selling Bitcoin At A Bitcoin ATM
The process of selling Bitcoin using a BTM is similar to carrying out a transaction on a traditional ATM. Here are the steps specifically associated with selling Bitcoin:
- Find a BTM: Use CoinATMRadar or similar tools to locate the nearest BTM that supports selling Bitcoin.
- Visit the BTM: Ensure that the smartphone you will be using has access to your Bitcoin wallet.
- Choose ‘Sell Bitcoin’ on the machine: Select this option on the BTM screen
- Verify identity: Provide a phone number or ID if the BTM asks
- Enter the amount: Input the amount of Bitcoin you want to sell
- Send Bitcoin: The BTM will generate a QR code with its wallet address
- Scan the QR code: QR code needs to be scanned with your wallet app before you send the desired amount of Bitcoin
- Wait for confirmation: The BTM will wait for the Bitcoin transaction to be confirmed
- Redeem cash: The BTM will provide a redemption code or voucher. Choose ‘Redeem cash’ on the BTM and enter the redemption code
- Receive cash: The BTM dispenses cash once the redemption code is entered; collect the cash.
Always stay cautious and only use trusted and secure Bitcoin wallet apps and inspect the machine before using it to ensure it has not been tampered with in any way.
Fees Associated With Bitcoin ATMs And How To Minimize Them
Before you journey into purchasing from a Bitcoin ATM you might be wondering how much does it cost to use a BTC ATM and this is an important question to address. Let us begin by letting you know that some concerns over high transaction fees do exist. This means one might encounter an ATM with high fees.The current worldwide average Bitcoin ATM fee is 8.4% for buying bitcoins from machines, and 5.4% for selling bitcoins for cash, while online cryptocurrency exchanges often charge fees of less than 1%.
Besides transaction fees, some Bitcoin ATM operators may also impose a variable miner fee. This fee is used to compensate Bitcoin miners for their work to validate your transaction when recording the specific transfer to the blockchain in question. You might also be subject to a network fee and a wallet fee that you are using to send or receive.
This will calm any anxieties over unknown expenses you might find yourself facing when interacting with a BTC ATM. Albeit the largest fee you will be faced with is the BTM imposed transaction fee mentioned earlier. All other fees that might come with the exchange are typically on the smaller side. Always try to choose a BTM with the lowest fees to save more and purchase more BTC with your fiat. By being aware of the fees and comparing different Bitcoin ATMs in your area using the websites listed above, you can save money and ensure a cost-effective and convenient way to buy or sell Bitcoin.
Bitcoin ATMs vs Traditional Cryptocurrency Exchanges
Bitcoin ATMs and traditional cryptocurrency exchanges are both effective ways to buy and sell cryptocurrencies, but they differ in various aspects.
Bitcoin ATMs and traditional cryptocurrency exchanges differ in convenience, security, anonymity, transaction speed, verification requirements, and fees. Bitcoin ATMs provide a familiar experience, faster transactions, and potentially more anonymity, but they often charge higher fees.
Traditional exchanges offer lower fees and more cryptocurrency options, but require internet access and may have stricter verification procedures, limiting privacy such as KYC parameters that you would need to provide to that specific cryptocurrency exchange. It is advisable to always try to weigh the pros and cons between the two, considering factors like convenience, transaction speed, and fees.
Common Mistakes To Avoid When Using Bitcoin ATMs
When using Bitcoin ATMs, avoid these common mistakes to ensure a smooth and enjoyable experience:
- Not checking fees: Research fees before using a BTM
- Not double-checking transaction details: Verify transaction details before confirming
- Using unsecured Wi-Fi networks: Try to avoid public, unsecured networks for transactions
- Not securing personal information: Store wallet’s private keys and personal details safely
- Using unfamiliar Bitcoin ATMs: Stick to reputable BTM operators
- Not updating wallet address: Use an up-to-date wallet address to prevent errors
FAQs
How do I find a Bitcoin ATM near me?
Use tools like CoinatmRadar, mobile apps, social media, and Bitcoin forums to locate nearby BTMs.
How do I buy Bitcoin using a Bitcoin ATM?
Follow these steps: find a BTM, verify your identity, scan your wallet’s QR code, insert cash, confirm transaction details, and receive Bitcoin in your wallet.
How do I sell Bitcoin for cash at a Bitcoin ATM?
Find a BTM that supports selling, verify your identity, select ‘Sell Bitcoin’, enter the amount, send Bitcoin to the BTM’s wallet address, and withdraw cash.
How much does it cost to use a Bitcoin ATM?
BTMs typically charge transaction fees ranging from 5% to 15% of the total amount, with additional fees for miner and network fees.
Is it safe to buy and sell Bitcoin at an ATM?
Yes, buying and selling Bitcoin at BTMs is generally safe. Choose trusted, secure Bitcoin wallet apps and be cautious with public machines.
Can I buy less than 1 Bitcoin using a Bitcoin ATM?
Yes, you can buy any fraction of a Bitcoin at a BTM, including less than one Bitcoin, catering to users seeking smaller amounts like satoshis.
