Everything You Need to Know About Bitcoin ATMs
Most people who have an interest in cryptocurrency, and even those who do not, have heard of Bitcoin ATMs. These machines look very similar to regular ATMs that dispense fiat currency and serve a similar purpose. Even so, the fact that Bitcoin ATMs are less common than fiat ATMs means that you may not understand what they are or how they work.
Whether you want to know how to use a Bitcoin ATM, are just curious, or want to operate one, it can be helpful to learn more about this type of ATM.
What Is a Bitcoin ATM?
The first thing to understand is what exactly a Bitcoin ATM is. This ATM makes it incredibly easy to swap your fiat currency for Bitcoin or vice versa. There may be multiple methods of paying for the Bitcoin. Keep in mind that to use a Bitcoin ATM, you will need to have a Bitcoin wallet.
Benefits of Bitcoin ATMs
There are many reasons that someone may choose to use a Bitcoin ATM. Some people like the convenience of the machines while others prefer the anonymity.
That anonymity is important to many people, especially given the extensive KYC procedures that many crypto exchanges require. These are necessary to prevent fraud and remain compliant in certain jurisdictions. Despite that, some people feel that the KYC procedures are simply a waste of time or may violate their privacy.
When using a Bitcoin ATM, neither of these reasons for wanting to avoid KYC is an issue. You can typically walk up and use the machine right away. Remember that some Bitcoin ATMs will request certain identification information, especially in cases involving larger quantities.
The convenience factor is also important to many people since you do not have waste time signing up for an exchange. There is not even any need to choose which crypto exchange you want to use.
No Bank Account Required
Others may want to use a Bitcoin ATM for the simple fact that it lets you purchase cryptocurrency even if you do not have a bank account. To transact in a crypto exchange, you would need a bank account, an e-wallet for fiat money (like PayPal), or a credit card. Bitcoin ATMs typically accept cash, so this is not an issue.
Less Tech Knowledge Required
Others appreciate the ability to purchase cryptocurrency via a Bitcoin ATM without having to be as tech-savvy. There are fewer tech-related steps to buying Bitcoin via an ATM compared to via an exchange.
Be Aware of Fees
Before you decide to use a Bitcoin ATM, you should keep in mind that there will be fees. Compared to other methods of buying or selling Bitcoin, these ATMs tend to charge relatively high fees. They can get away with this due to the convenience factor and the anonymity involved in the purchase. You should expect to pay as much as 7–12 percent when using the ATM. Some may even charge 15 percent. By contrast, you would likely pay a lower fee if you bought the Bitcoin on an exchange.
Be Aware of Limits
You should also remember that many cryptocurrency ATMs have some limit in place. The limit will usually be somewhere between $1,000 and $10,000, although this can vary. This limit is there to protect the machine as robbers will not be tempted by potentially large sums. It also lets the ATMs avoid having to comply with KYC or AML requirements that may apply to more significant transactions.
Make Sure You Have a Wallet
As mentioned, you need to have a Bitcoin wallet if you want to use a Bitcoin ATM. After all, the Bitcoin you purchased need somewhere to go. Choose a mobile Bitcoin wallet since part of the buying process will involve scanning a QR code on the ATM. You can transfer the Bitcoin there from another Bitcoin wallet if you plan on selling. If you buy Bitcoin at an ATM, you can transfer it from your mobile wallet later.
How to Buy Bitcoin With an ATM
Keep in mind that there are several different types and brands of Bitcoin ATMs on the market. Each of these will have some slight variations in the exact steps for buying or selling Bitcoin, but the overall pattern is the same.
To buy Bitcoin, you will need to start by choosing the appropriate option on the machine. This will be some combination of “buy” and “Bitcoin.” Some machines will also offer the option of selling, while others may offer multiple currencies.
After selecting the appropriate options, open up your Bitcoin wallet on your phone. Scan the QR code that appears on the ATM as this will connect your phone and the machine. Alternatively, the machine may ask you to pull up your wallet’s QR code on your smartphone then hold it to a specific part of the machine for the ATM to scan it.
Now, you can insert your payment method. The machine may ask you to enter the payment amount before you enter fiat bills. Alternatively, it may ask you to confirm the quantity you entered after. Depending on the machine, you may also be able to pay for your Bitcoin by inserting a debit or credit card.
Some machines may have additional steps, such as requiring you to input your phone number and confirm it via a verification code. Some Bitcoin ATMs may also ask you to scan certain types of identification in order to meet know-your-customer (KYC) requirements. That requirement, however, is unlikely when buying smaller quantities.
How to Sell Bitcoin With an ATM
As with buying Bitcoin, the specific steps you take will depend on the type of Bitcoin ATM you are using. When you get to the machine, you will need to choose to “withdraw cash” or “sell Bitcoin” and may need to choose the cryptocurrency if the ATM in question offers more than just Bitcoin.
From there, you will be prompted to enter either the amount you want to withdraw in fiat or the amount to sell in Bitcoin. Pull up your Bitcoin wallet on your phone and scan the QR code that is on the ATM’s screen. This is for the destination wallet that you will send the Bitcoin to. Send the funds, and the machine will dispense your fiat.
As with buying Bitcoin via a Bitcoin ATM, some machines may require you to scan identification documents and/or verify a phone number.
The Importance of Confirming Transactions
Before you start using cryptocurrency in any way, you should know that every crypto transaction is permanent and is not reversible. This means that you should always be sure to confirm you enter your Bitcoin wallet address correctly. That need for accuracy is why you should always opt to scan a QR code instead of manually inputting the wallet address, even in the rare case where the latter is an option. If you make a single mistake in the wallet address, you can lose the funds forever with no way of getting them back.
Some Bitcoins Only Support Buying or Selling
Another thing to bear in mind before you start looking for a Bitcoin ATM is the type of transaction supported. Some Bitcoin ATMs will only have support for buying Bitcoin while others will only allow selling, and yet, others support both actions. Some crypto ATMs may also not cover Bitcoin, instead only support other cryptocurrencies.
To avoid wasted time, confirm that you can complete your desired transaction on your chosen Bitcoin ATM ahead of time. On the bright side, if you go to a Bitcoin ATM that only supports buying but you intend to sell, you will only waste time, nothing else.
What Else Can You Do With a Bitcoin ATM?
Although rare, some Bitcoin ATMs will also offer other types of functionality similar to what you find on traditional ATMs. For example, some may let you pay your bills using Bitcoin that the ATM converts to fiat. Others may allow for transfers between Bitcoin wallets. However, these features are incredibly rare, so do not expect to find them without a special search.
Where Bitcoin ATMs Are Most Common
Although the number of Bitcoin ATMs is growing, they are still not always easy to find. You are much more likely to find a Bitcoin ATM in a large city than in smaller towns, and certain areas of the world have more than others. Even so, there is no way to predict where you will find a Bitcoin ATM and which cities have none. Instead, you have to do some research and look online.
Estimates indicate that there are around 4,700 ATMs worldwide, with most of these located in the United States. In fact, there are 2,921 locations for Bitcoin ATMs in the United States. Canada also has a lot with 688 locations. If you are in New Zealand, you will only have two Bitcoin ATMs to choose from while the Philippines and France each only have one, according to the most recent assessments.