What Are Bitcoin ATMs?
Since the appearance of Bitcoin in 2009, the entire crypto ecosystem has been experiencing a constant explosion of ideas to take advantage of all the possibilities offered by its base technology, blockchain. One of the best examples of this are Bitcoin ATMs.
So what is a Bitcoin ATM? A Bitcoin ATM is like any other ATM (Automated Teller Machine) but instead of depositing and withdrawing cash like a bank ATM, you can buy or sell Bitcoin instead and it is not connected to a bank.
Although it’s not such a new idea – the first Bitcoin ATM was launched in 2013 – nowadays, they’re increasingly relevant in society, with a number close to 20K ATMs already distributed around the world.
These Bitcoin ATMs represent a more accessible, fast, and practical way for anyone to make effective use of their cryptocurrencies.
Even so, there are still many people who don’t know about their existence or have never tried to use one of these devices, perhaps due to some fear related to this technology.
For this last reason, in this article, we’re going to explain everything that you, dear reader, should know about Bitcoin ATMs so that you can get the most out of your cryptos in your day-to-day life.
What are Bitcoin ATMs?
Again, a Bitcoin ATM is like any other ATM where you can withdraw or deposit money, either using a credit/debit card or cash; the difference is that with a Bitcoin ATM, you can only operate with Bitcoin and cash, and sometimes other cryptocurrencies as well.
These Bitcoin ATMs use blockchain technology to perform operations as if they were a crypto exchange so that their users can buy and sell Bitcoin in a much faster and more practical way.
However, it’s important to clarify that this technology is not standardized and each ATM has its own features. In this way, some only allow you to buy Bitcoin, while others allow you to buy and sell as well – bidirectional ATMs.
How to use Bitcoin ATMs
First, it’s important to remember that Bitcoin ATMs are not linked to any bank. Remember that one of the main characteristics of Bitcoin and most cryptocurrencies is decentralization, that is, there is no central body that regulates them.
This means that Bitcoin ATMs are developed by private companies that make these products available to the public, in exchange for charging commissions for each transaction. This also means that not all ATMs work in the same way, even though they all serve the same purpose.
Another very important point to clarify is that with some Bitcoin ATMs, in order to buy and sell Bitcoin, you will first need to have a user account registered with the ATM provider. This is done through the provider’s website.
Other Bitcoin ATM providers will not require you to create an account on their website, rather, they will ask for your phone number as a means of KYC in order to send you an SMS for verification before you buy or sell.
Here is a short list of some Bitcoin ATM providers:
What do you need to use a Bitcoin ATM?
The first thing you’ll need to perform your operations on a Bitcoin ATM is to have a digital wallet or hot wallet. We recommend you to use a wallet you can download to your smartphone in the form of an app for iOS or Android.
This is because Bitcoin ATMs need to scan your wallet address through the QR code that these apps provide.
In addition to the QR code, in many cases, you’ll also need to verify your identity with your email address and your wallet password, while in others you may need your ID document or mobile phone number.
Bitcoin ATMs request these identification elements to verify that the wallet owner is the one who is actually doing the operation. Once this simple step is completed, the rest is even much easier.
All you have to do is select the type of operation you need at the ATM, buy or sell and that’s it!
Most ATMs will allow you to only buy and sell Bitcoin, but there are some models that will allow you to exchange your Bitcoin for some other cryptocurrency such as Ether or Litecoin, for example.
TIP: Remember that the operation of a Bitcoin ATM will vary depending a lot on the features that the model or brand has to offer by the manufacturer.
1.- How to buy cryptocurrency at a Bitcoin ATM
Although most Bitcoin ATM models require you to perform the steps below, they may vary in number or order, depending on the ATM model.
- Select the option “Buy Bitcoin”
- Using the ATM barcode reader, scan the QR code provided by your Bitcoin wallet app
- Verify your identity, either with your email, SMS security code or personal ID – this varies by provider.
- Indicate the amount of Bitcoin you want to buy
- Deposit the indicated amount of fiat money at the ATM
- Verify that you received your coins in your Bitcoin wallet to confirm and end the transaction
TIP: Nowadays, many people wonder whether is possible to pay with another alternative means for buying operations at a Bitcoin ATM such as using a credit or debit card. Unfortunately, nowadays it’s only possible to use cash to carry out buying operations on these machines.
2.- How to sell cryptocurrency at a Bitcoin ATM
As with the purchase, the process of selling Bitcoin also varies between ATM operators.
- Select the option “Sell Bitcoin”
- Verify your identity, either with your email, SMS security code, or personal ID – this varies by provider
- Indicate the amount of Bitcoin you want to sell
- Send the Bitcoins to the machine from your wallet or app on your phone using the ATM QR code
- Withdraw the cash from the ATM
TIP: In case you want to exchange Bitcoin for another cryptocurrency, it’s convenient that you have a wallet that supports several of these, such as ZenGo, Exodus, Atomic Wallet, or any other trusted wallet that you prefer.
Do Bitcoin ATMs require ID?
Bitcoin ATM providers have adopted various security measures to verify the identity of their customers and keep criminals out.
In addition to the identity verification methods already mentioned, such as email verification and two-factor authentication, in many ATMs, there is a second layer of security that usually consists of a government-issued identification card, similar to a driver’s license. In this case, the user must scan such card through the ATM to complete their transaction.
But usually, this information is requested when you are seeking to buy or sell a value of Bitcoin or other cryptocurrencies. If you are purchasing a small amount, usually around $100 USD, then the ATM will normally ask for a phone number or email only.
These requirements are part of the “Know Your Customer” (KYC) and “AntiMoney Laundering” (AML) procedures, required by law – in the US – that is necessary to collect and maintain a record of users and the transactions they perform.
This is because Bitcoin ATMs are classified as a money services business (MSB) by the United States Department of the Treasury.
However, this type of procedure may not be applicable in other countries, depending on the provider of the Bitcoin ATMs.
How much are Bitcoin ATM fees?
Currently, the average fee for operations with Bitcoin ATMs is between 8% and 10% for the purchase, and between 5% and 7% for the sale. However, it’s important that you do your research in this regard, since some companies that provide these ATMs may charge fees of up to 20% or even higher.
Another aspect to keep in mind is that the Bitcoin blockchain also has its own fees related to the activity of miners. These fees tend to vary constantly, depending on how congested the network is.
Are Bitcoin ATMs safe?
Normally, Bitcoin users are concerned about privacy and security, as these are factors inherent to Bitcoin.
Although using Bitcoin itself provides high levels of privacy and security, these levels can be altered when the services of a third party are used to perform exchange operations. The same happens with ATMs.
Regarding privacy, as we mentioned earlier, with ATMs as with traditional crypto exchanges, some ATMs require you to perform a user registration prior to using the service, so that some of your data will be registered on the provider’s platform. However, this will also depend a lot on the provider itself.
In terms of security against attacks and robbery attempts – whether digital or physical – this aspect is not very different from using an online crypto exchange or a traditional ATM. Everything will depend on the security features given by the provider and the location of the ATM itself.
How to find Bitcoin ATMs
One of the best ways to locate a Bitcoin ATM near you is to use an online tool that keeps track of ATM kiosks around the world. One of the best options currently is CoinATMRadar. According to the platform, there are almost 19,000 ATMs installed around the world.
Using this tool is very easy since you only have to use the “Bitcoin ATM Near Me” option, which will allow you to do the most specific search and access an ATM machine much more quickly where you can buy or sell any cryptocurrency of your choice, not only Bitcoin.
In addition, CoinATMRadar contains detailed information on most of these machines, including the address and phone numbers of the providers.
Conclusion
Bitcoin ATMs are undoubtedly one of the most important instruments in the adaptation of the masses to the daily use of cryptocurrencies.
It’s a relatively new technology that is quite accessible and easy to use, and that also offers some advantages over the use of traditional crypto exchanges, but with similar levels of security and privacy.
Perhaps, the only disadvantage is that the fees to pay for each transaction are a little higher, but it’s well worth weighing this with the convenience of being able to make a much faster and practical exchange.
And in the end, Allah knows best.
