How To Use Bitcoin ATMs

Introduction

As the popularity of Bitcoin and other digital assets increases, people seek alternative ways of interacting with cryptocurrencies. Various businesses, from small shops to multinational firms, have started accepting Bitcoin as a payment option. Because of the relevance of digital assets in the global economy, many aspiring crypto holders are demanding safer and more secure ways to buy, sell, and manage their assets.

Bitcoin automated teller machine (ATM) is a great evolution that unlocks the direct exchange of cryptocurrencies with fiat currencies. Simply put, Bitcoin ATMs allow people to buy or sell Bitcoin using cash. Since their inception in October 2013, the world has experienced astronomical growth in the number of existing Bitcoin ATMs and the future seems promising.

This article explores everything you need to know about Bitcoin ATMs, guiding you to have a seamless experience with the machine.

What Are Bitcoin ATMs?

Also called Bitcoin Teller Machine (BTM), Bitcoin ATMs are terminals or kiosks that allow people to buy or sell Bitcoin and other cryptocurrencies using cash or debit cards. They function very similarly to typical ATMs, giving users the convenience of accessing their digital assets and transacting with them.

BTMs work by connecting users to reputable crypto exchanges, linking to cryptocurrency wallets, and facilitating the movement of funds. Despite being called Bitcoin ATMs, it is noteworthy that the machines typically accept transactions in other cryptocurrencies in addition to Bitcoin (BTC). Thus, Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC), and Dash (DASH) are among the popular digital assets compatible with some BTMs.

History of Bitcoin ATMs

The first operational Bitcoin ATM appeared in Vancouver, Canada on October 29, 2013. This was a significant development in the cryptocurrency world, bringing an unprecedented innovation that simplifies the act of exchanging cash for Bitcoin in an accessible and user-friendly manner. Shortly after the first, another Bitcoin ATM was opened in Bratislava, Slovakia on December 8, 2013. This unfurled the door for other BTMs that flooded locations all over the world. There are currently 34,604 Bitcoin ATMs globally, according to Coin ATM Radar.

Source: Coinatmradar.com — Data showing the current number of BTMs installed globally

Despite the widespread presence of Bitcoin ATMs all over the world, they are still faced with regulatory challenges. After their inception, Bitcoin ATMs were mandated to adhere to the same laws that guide traditional ATMs. This included a limit to the daily transaction per person and verification processes.

The obvious consequence resulted. The regulations stripped Bitcoin ATMs of their founding principles of decentralization and anonymity. Depending on the transaction volume, some Bitcoin ATMs need users’ phone numbers. Some may even require users to scan their government-issued identification cards to complete certain transactions.

Although this regulatory condition caused significant dismay within the crypto community, Bitcoin ATMs have been thriving globally. Even though most BTMs are located in North America, they are widely dispersed all over the world. Cafes, specialty shops, and transport hubs are now among the common spots where you can find Bitcoin ATMs.

How Do They Work?

Source: Techopedia

Instead of being connected to a bank like traditional ATMs, BTMs communicate directly with the blockchain. Consequently, they are constantly in connection with the internet to power crypto transactions and provide real-time exchange rates. They typically allow users to connect their crypto wallets to the machine via QR codes to facilitate transfer to and from their wallet.

There are two types of Bitcoin ATMs:

1) Unidirectional BTMs: These machines support either the buying or selling of BTC and notable Altcoins.

2) Bi-directional BTMs: These machines support both the buying and selling of BTC and notable Altcoins.

How to Use Bitcoin ATMs: A Step-By-Step Guide

Bitcoin ATMs may seem somewhat unusual at first, but they function quite similarly to traditional ATMs and are easy to use. Here is a simple guide to using Bitcoin ATMs:

Getting Started

To get started, you need to know where a Bitcoin ATM is located around you, how to procure a crypto wallet, and how to verify your identity. Let’s explore these in more detail:

How to Find Bitcoin ATMs Around You

Because Bitcoin ATMs are not ubiquitous yet, it may be hard to randomly find one in the wild, especially if you don’t reside in hotspots like New York City or London. However, there are online tools that help anyone locate BTMs near them through an easy process. Examples are Coin ATM Radar, Bitcoin ATM Map, etc. These tools can also give further information about the BTMs like operator name, fees, proximity, verification procedure, and online status, among others.

To locate a Bitcoin ATM using Coin ATM Radar, go through the following steps:

Step 1: Navigate to the Coin ATM Radar homepage. You will see a BTM map.

Source: Coinatmradar.com

Step 2: On the upper left side of the map, type your preferred address and press “Enter.”

Source: Coinatmradar.com

Step 3: Note that you can filter your search based on:

• The coin you wish to transact with
• The type of transaction you want to carry out
• And the type of machine you prefer to use

Source: Coinatmradar.com

Step 4: Click on “View details” to see the Bitcoin ATMs near you. It shows the following details:

• Operating hours
• Machine location
• Supported cryptos
• Supported transactions
• Manufacturer’s name

Source: Coinatmradar.com

Step 5: You can also click “Get directions” to see the exact Google Maps location and a detailed direction from your location to the Bitcoin ATM selected.

Source: Coinatmradar.com

How to Get a Crypto Wallet

If you are using a Bitcoin ATM, you likely have a crypto wallet and a Bitcoin address. This is where the ATM will receive, store, and send your Bitcoin and other cryptocurrencies. However, if you don’t have a crypto wallet already, there are four easy ways to get one:

• Using a mobile wallet: Mobile wallet platforms like Gate.io provide convenience, security, and accessibility to your funds.
• Using a desktop wallet: You can also install desktop wallets such as Exodus or Bitcoin Core on your computer to get a Bitcoin address.
• Using a hardware wallet: They store Bitcoin offline, making them very resistant to breaches. Examples of hardware wallets are Trezor and Ledger Nano S.
• Using a paper wallet: Although not commonly used, paper wallets contain the public and private keys of a crypto address, offering offline access to digital assets.

How to get a Gate.io Bitcoin address

Step 1: Log into your account, and hover on “Wallet”. (https://gate.io/myaccount)

Source: Gate.io

You will see “Spot Account”. Click on it to access the wallet page.

Step 2: Click on ”Deposit” in front of “BTC Bitcoin” (If you can’t find Bitcoin on the display screen, you can type “BTC” into the search box).

Step 3: Choose “Onchain Deposit”.

Step 4: Following the instructions on the Bitcoin ATM, generate your wallet address. You can scan the QR code or copy the deposit address.

Source: Gate.io

How to Verify Your Identity

In some locations, local authorities may require that you verify your identity. Users typically do this by inputting their phone numbers, email addresses, or government-issued documents. To ensure smooth transactions and compliance with government policies, it is important to comply with these processes.

Source: Changelly.com — Verifying identity using a Bitcoin ATM

Buying Bitcoin Using BTMs

Step 1: Choose the cryptocurrency you would like to buy and enter the amount. In this example, we will use Bitcoin (BTC).

Source: Changelly.com

Step 2: Enter your Bitcoin wallet address. Most Bitcoin ATMs have QR code functionality for convenience and to minimize the risk of sending funds to the wrong address. Scan the QR code or input the address manually.

Source: Changelly.com

Step 3: Double-check all displayed information to ensure accuracy. After that, insert the required amount of cash into the ATM.

Source: Changelly.com

Step 4: Confirm the purchase and wait for a while for the funds to reflect in your wallet. Bitcoin typically takes 10 to 15 minutes for the transaction to complete, however, other cryptocurrencies might be shorter.

Selling Bitcoin Using BTMs

Step 1: On the Bitcoin ATM, select “Withdraw Cash”.

Step 2: Enter the amount of fiat you wish to receive.

Step 3: You will see a QR code on the screen containing the amount of Bitcoin and the destination wallet address. Open your Bitcoin wallet, choose “Scan QR Code” and click on “Send”.

Step 4: The cash will be dispensed from the BTM. Depending on the volume of transactions and the type of cryptocurrency used, the transaction may take a few minutes to complete.

Using Bitcoin ATMs: Benefits and Risks

There are several pros and cons to the use of Bitcoin ATMs. We’ve highlighted them in more detail below:

Benefits

• Convenience: Aside from face-to-face interaction, Bitcoin ATMs are the only way people can convert their digital assets to cash without linking to bank accounts or waiting for funds transfer. They offer immediate and 24/7 access to fiat currencies, increasing overall convenience.
• Accessibility: Bitcoin ATMs are successful in bringing blockchain technology closer to people. Unlike traditional banks, Bitcoin ATMs don’t need debit cards and users’ bank accounts to complete transactions. This can bring financial solutions to the unbanked and underbanked population, including those with little technical knowledge of navigating crypto exchange platforms.
• Fast transactions: Bitcoin ATMs serve as repositories of cash, ensuring quick access when people arrive. This reduces wait times and offers users swift access to their digital currencies without reliance on any third-party processors.
• Privacy: BTMs provide some level of privacy to users. Unlike crypto exchanges, which require users to input extensive personal information during KYC or AML, Bitcoin ATMs offer a more discreet option.
• Familiar process: Because the interface of BTMs is similar to traditional ATMs, they are very familiar to users. They also ensure a smooth transition from traditional banking to decentralized banking, since millions are already familiar with ATMs.
• Customer support: In some cases, Bitcoin ATMs can offer customer service to resolve issues encountered during transactions. This additional service can improve overall user experience and adoption.

Risks

• High fees: Bitcoin ATMs operate at significantly higher fees (5 to 20 percent) compared to online crypto exchange platforms (less than 1 percent). These fees cover hardware maintenance, customer support, renting space, and other recurring costs needed for seamless transactions on the kiosk. Furthermore, some BTMs also impose variable miner fees that compensate the individuals validating the transactions.

Source: Coinatmradar.com — Graphical representation of the fees required to buy Bitcoins using BTMs, 16% is the most common fee

Source: Coinatmradar.com — Graphical representation of the fees required to sell Bitcoins using BTMs

• Limited cryptocurrency choice: It is important to note that the Bitcoin teller machines don’t support transactions with all cryptocurrencies available on online exchange platforms. This restricts the extent of digital assets users can explore through these machines.

Source: Coinatmradar.com — Data showing cryptocurrencies currently supported by BTMs

• Transaction limits: There are upper and lower limits to the cash that can be deposited through BTMs. Larger transaction volumes generally require verification processes like Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.
• Availability: Although Bitcoin ATMs are progressively growing in numbers, they are still few compared to the global population. Further, most of the machines are located in North America, with very few present in Asia and Africa, the world’s most populous continents.

Source: Coinatmradar.com — The geo-distribution of BTMs

Using Bitcoin ATMs: Tips and Precautions

To successfully transact on BTMs, there are important tips and precautions users need to take. The following explores them in more detail:

Tips

• Always research the ATM operator to find reviews and comments about them. This is because there are some unscrupulous BTM providers and a simple check may prevent unwanted consequences.
• Different Bitcoin ATMs offer different transaction fees. Compare the transaction fees of different machines to minimize costs and aid in choosing the most suitable one.
• Always transact with Bitcoin ATMs at secure locations. The machines should be situated in public areas and secure locations where the risk of theft is low.
• To protect your funds, consider using Bitcoin wallets with additional security features, like two-factor authentication (2FA).
• While using the Bitcoin ATMs, always confirm that the details displayed on the screen are accurate. Additionally, carefully read and follow all instructions at each step of the transaction.

Precautions

• Remember that transactions on the Bitcoin network can never be refunded, re-routed, or stopped. Therefore, always ensure that you input the correct wallet address of the recipient.
• Never reveal your private key address to anyone. No Bitcoin ATM operator will call or text requesting your wallet address or some Bitcoin.
• You cannot pay bills using Bitcoin ATMs, so be wary of individuals requesting this.
• If you used a paper wallet for your transaction, never show it to anyone because anyone in possession of the paper can have complete access to your funds.

Future Prospects

Some may argue that ATMs in general are outdated and may be phased out in the future. While this may be possible, it doesn’t seem to be a possibility for Bitcoin ATMs in the next few years. With the popularity of Bitcoin and other cryptocurrencies growing astronomically, the number of Bitcoin ATMs lurking on the streets is likely to increase.

Experts have suggested that the world is going to see significant growth in Bitcoin ATMs in the coming years. The intricate regulatory tapestry may hinder the growth of Bitcoin ATMs in some regions, but this generally highlights the need for balancing innovation in the crypto sector with financial security and user protection.

Conclusion

As the world continues to adopt digital solutions, financial transactions in Bitcoin and other cryptocurrencies are expected to become widespread. As a result, Bitcoin ATMs will be handy to support the need for alternative ways to interact with the Blockchain.

It is expected that Bitcoin ATMs will continue to increase in numbers and popularity year on year. They offer unique experiences to users in terms of accessibility, novelty, and convenience. Although the high transaction fees are a huge drawback to their widespread adoption, more operators have been working to offer competitive transaction fees to customers.

Overall, Bitcoin ATMs will continue to be a secure and convenient way of transacting with crypto. Users are encouraged to carry out due diligence while operating Bitcoin ATMs. This will protect them from unscrupulous actors while ensuring they have access to the best transaction charges and conditions.