Cryptocurrencies have become extremely popular lately, but not everyone feels safe purchasing or selling virtual currencies through online platforms. This is where Bitcoin ATMs or BTMs come in handy. Imagine a machine somewhat resembling a conventional ATM, but instead of a bank card, you are using your cash to convert to Bitcoin and or other cryptocurrencies instantly. Regardless of whether someone wants to invest or withdraw their cryptocurrency or simply wants to send money to a friend across the globe, BTM makes it easier for the common man. This article discusses Bitcoin ATM, buying and selling Bitcoin using BTM, and finding BTM near your location.
What is a Bitcoin ATM?
A Bitcoin ATM works more or less like a conventional ATM, where people generally use a card or cash for transactions. However, instead of withdrawing fiat currency, they use cash, debit, or even credit cards to purchase Bitcoins or other cryptocurrencies. It is often referred to as BTM and is usually in the form of a physical kiosk. Furthermore, other than Bitcoins, some of the operators of BTM also support other cryptocurrencies. Unlike traditional ATMs, where users can physically withdraw cash, BTMs send the cryptocurrencies bought directly to their digital wallet. They also allow users to sell Bitcoins or other cryptocurrencies for fiat currency.
The first Bitcoin ATM was installed in a coffee shop in Vancouver, Canada, on 29 October 2013. Since then, Bitcoin ATMs have spread worldwide, and according to Coinatmtadar data, there are more than 38,340 Bitcoin ATMs. The United States accounts for most of the BTMs installed, followed by Canada, Europe, Australia, and other countries.
How Does Bitcoin ATM Work?
The third-party operator connects the BTMs with a crypto exchange to get real-time data (value) for Bitcoin and other cryptocurrencies. They serve as a bridge between the wallet and the exchange. After the verification for connecting a wallet is over, the users are allowed to use the funds for the purchase of bitcoins. The BTC will get directly transferred to the wallet and the transaction will appear on the blockchain. Once the transfer of BTC is over, a transaction record will be added to your wallet.
Types of BTMs
There are two types of Bitcoin ATMs,
- Unidirectional: These types of BTMs support either buying or selling Bitcoin and other cryptocurrencies, but not both.
- Bi-directional: These types of Bitcoin ATMs support both the buying and selling of cryptocurrencies.
How to Use a Bitcoin ATM?
Below are the steps to be followed to ensure a smooth transaction using the Bitcoin ATM.
Step 1: Bitcoin Wallet
Wallets are necessary for any kind of transaction. To withdraw from a Bitcoin ATM, users must hold a Bitcoin wallet. If you don’t have one, you can create a wallet account through a cryptocurrency exchange like Binance or decentralized applications like MetaMask and Trust Wallet.
Step 2: Verification Process
Before using the BTM, you need to go through a verification process. The verification process varies based on the operator and the country where the BTM is located. Normally, the verification process would include phone verification and sharing government IDs through the camera inside the BTM. Sometimes, the verification might also include compliance with AML and KYC regulations.
Step 3: Transaction Type
Once the verification process is over, you need to choose the transaction type. If you want to buy Bitcoin, enter the amount you want to buy.
Step 4: Scanning QR Code
Now, log in to your wallet on your mobile device and scan the QR code that contains your wallet address using the BTM’s scanner. This allows the BTM to know to which address the Bitcoin needs to be sent.
Step 5: Cash or Card
Based on the amount of Bitcoin you are buying, the BTM will show the amount you need to pay. If you use cash, you can directly insert the amount specified for the transaction in the given slot. If you are using credit or debit cards, follow the on-screen instructions and finish the transaction.
Step 6: Confirmation of Transaction
Review the transaction details on the screen for the final time and confirm the transaction. This process takes some time to complete, so make sure you note down the transaction ID that appears on the screen and check your wallet for any incoming Bitcoin.
How to Sell Bitcoin Using a Bitcoin ATM?
If you want to sell your Bitcoin for cash, then follow these steps,
- Find a Bitcoin ATM and go through the verification process.
- On the screen, click on ‘Sell’ on the transaction type.
- Type in the desired amount to sell, and BTM will give you a paper wallet or a receipt with a QR code displayed on it.
- Use your mobile phone to scan the provided QR code and transfer the Bitcoin you want to sell.
- The transaction will take some time to process. You can monitor the transaction status using your wallet application. Once the transaction is confirmed, the BTM will dispense the cash, and sometimes, you need to click on ‘Redeem’ to receive the cash.
How to Use a Bitcoin ATM to Send Money?
To send money to someone else’s address, use the steps below,
- Finish the necessary verification process on the Bitcoin ATM machine.
- Select ‘Send’ or ‘Send Bitcoin’ on the interface.
- Enter the recipient’s Bitcoin wallet address or scan the address using the machine scanner.
- Enter the amount of money that you wish to pay to the recipient, and ensure that your wallet has sufficient balance to fund the purchase.
- Go through the transaction details and make sure the transaction has been completed. This takes time, so wait for the exchange to be authenticated by the blockchain’s network nodes.
If you wish to send money directly through cash or cards, follow these steps,
- After the verification is over, click on ‘Send Bitcoin.’
- Use the scanner and scan the recipient’s address, or type the address using the machine’s keyboard.
- Enter the amount of Bitcoin you want to send.
- The machine will calculate the required amount and insert the debit or credit card or cash.
- Verify the transaction details and click on ‘Send.’
Bitcoin ATM Fees
While a traditional ATM charges the customer a flat rate for the service, a BTM charges the customer a percentage fee. The percentages charged by Bitcoin ATMs are very high and differ from one operator to the other. For instance, they can charge between 4.5% and 22% of the transaction amount, which is a lot when compared with the cost of using online cryptocurrency exchanges or PayPal to buy or sell Bitcoins. Thus, it is important that one closely studies the fees charged and selects the BTM that best fits the need.
Bitcoin ATMs Near You
There are several ways you can attempt to locate a Bitcoin ATM near your geographical area. These are, for instance, through the Mobile application known as The Bitcoin ATM Map or through websites like CoinATMRadar and CoinFlip. One can also search for BTMs by simply entering the search engine or Maps.
Bitcoin Surges After Fed’s 50-Point Rate Cut: What’s Next?Pros of Bitcoin ATM
- It is highly accessible since BTMs are usually situated in areas of high traffic and are open around the clock.
- Easy-to-use and a convenient platform through which people can easily buy and sell Bitcoins.
- BTMs help promote cryptocurrencies to a wider audience.
Cons of Bitcoin ATM
- The transaction fees for buying and selling Bitcoins are significantly higher than those for online exchanges, which might make users think twice before using them.
- Concerns over the regulatory status of Bitcoin ATMs and the general likelihood of fake machines.
- Daily transactional value constraints due to money laundering regulations concerning both the minimum and maximum value of transactions.
Conclusion
Bitcoin ATMs, also known as BTMs, are machines that enable people to purchase and sell bitcoins directly. Although they are easy to use with user-friendly interfaces and accept cash or a card as a means of payment, they are associated with high fees in comparison to online exchanges. Furthermore, despite the regulatory uncertainties and restrictions regarding transaction amounts, BTMs are expanding worldwide and are raising public awareness of cryptocurrencies.
