There are many ways to buy and sell bitcoin and other cryptocurrencies. But the most popular are peer-to-peer trading platforms like Paxful and online exchanges like Coinbase and Kraken.
However, another way that’s gaining traction in the crypto world is the use of Bitcoin ATMs. According to our internal numbers and Statista, about 14,000 Bitcoin ATMs have been installed all over the world.
With many businesses accepting bitcoin as a form of payment, many are turning to Bitcoin ATMs for the convenience of simplicity and almost instant transactions. In addition, in other countries, access to the internet is poor with slow or no coverage and expensive data plans, forcing many to rely on Bitcoin ATMs for transactions.
What is a Bitcoin ATM?
Bitcoin ATMs work just like traditional Fiat ATMs. However, instead of depositing and withdrawing money to and from your bank account, they allow you to buy and sell bitcoins using your bitcoin wallet.
How do Bitcoin ATMs Work?
Just like bank ATMs, Bitcoin ATMs charge transaction fees. These are usually in the form of an exchange rate higher than the real-time exchange rate. The fees range anywhere from 6% to 20%. The extra fees are incurred due to transporting money, machine maintenance, the cost for the location, and the potential for additional anonymity (depending on local laws).
Such exchange rates can be high for some, but they vary from ATM to ATM, so try to shop around for the best rates.
When buying Bitcoins, users are required to select the number of Bitcoins and specify the Bitcoin wallet where the coins will be set by scanning a QR code into the machine. If you don’t have a mobile wallet, some ATMs will generate a temporary paper wallet for you.
Bitcoin ATMs have a set maximum and minimums that can be transacted. This is because all ATM operators, at least in the United States, must register with the Financial Crimes Enforcement Network (FinCEN) and comply with the Anti-Money Laundering provisions of the Bank Secrecy Act (BSA). The maximums can often be increased if you follow additional identification protocols such as submitting your identification or verifying yourself with the company.
In other countries, the ATMs may comply with the existing local anti-money laundering laws and other regulations.
In addition, some ATMs may require users to complete KYC (Know Your Customer) verification to reduce instances of fraud and anti-money laundering.
Depending on the country, the identification process may be required before transacting anything or may only be necessary when transacting large amounts.
How to Use A Bitcoin ATM
Find a Bitcoin ATM near you: You can use our bitcoin atm map to search by location, type of crypto, and fees.
Prepare Your Crypto Wallet: If you don’t have a wallet, you’ll need to get one to store the Bitcoin you purchase. Nowadays, there are many mobile wallets to choose from, most of which can be downloaded from the Google Play Store or iOS App Store.
Take note of your wallet address or QR Code: Crypto wallets have a unique address required when transacting crypto. The address consists of many characters making them difficult to memorize, so your wallet will generate a QR code to represent your wallet address.
Carry a form of identification: If you’re going to make huge transactions at the ATM, you may have to carry some form of ID. However, for normal transactions, the ATM may only require a phone number to send a security code (or may print a paper receipt). The amount of identification needed depends on that country’s KYC (Know Your Customer) laws and can vary between ATM providers.
The process of buying Bitcoin from a Bitcoin machine varies from machine to machine. However, the overall steps you need to take are identical.
Once you’re at the ATM, you will see an interface similar to this, prompting you to select whether you wish to BUY BITCOIN, SELL BITCOIN or REDEEM TICKET.
The interface will vary from machine to machine as they may belong to different operators. Select the BUY BITCOINS option to move to the next step.
At this step, you will be presented with an interface similar to this, prompting you to select the appropriate range. For example, if you’re buying $20 worth of bitcoin, select the 0-500 USD range or the 500-1000 USD range for $800 worth.
Next, you will be presented with an interface to specify the wallet address that the purchased bitcoin will be sent. Go to your mobile wallet app on your phone and select your address’s QR code and scan it into the machine.
Most machines have a screen below the main display or a small camera hole at the top where you can scan the QR code by pointing your phone’s display towards the ATM screen. If you choose the paper wallet option, a paper wallet will be printed for you, and Bitcoins will be sent to that wallet.
Note: Do not reveal in any way your paper wallet to anyone as it contains the private key. Private keys should be kept secret as you can lose your bitcoins if revealed to third parties.
A paper wallet should be temporary, so you should transfer any crypto in the wallet to a digital wallet. Once you do this, you can discard the paper wallet.
The next step would be to feed your money into the machine. Insert the bills one by one.
The ATM will display the amount of inserted cash and the Bitcoin equivalent. The exchange rate will also be displayed on the ATM display.
Once you’re done inserting your cash, press the Confirm Purchase button, and a summary of the transaction details will appear.
Press DONE and the transaction will be processed. This will take a few seconds as the transaction will have to be verified by the blockchain.
Once the transaction is completed, you can print your receipt and check your wallet to see if the balance has been updated. The transaction may take a few minutes to an hour, depending on the number of confirmations or cryptocurrency selected.
To exchange the bitcoins in your wallet for cash, select the SELL BITCOINS option.
You will be prompted to select a currency range in the next step. Choose the appropriate one to proceed to the next step.
Choose the amount of money you want to receive to sell your bitcoins. Once you select an amount, the ATM will show you the Bitcoin equivalent that you will have to exchange for cash.
In the next step, the ATM will print you a ticket with a QR code; the QR code represents the ATM’s wallet address where you will send the Bitcoin. Keep in mind there is a time limit within which you’re required to send the Bitcoin. This is because the price of Bitcoin is volatile and can change quickly.
Some ATMs give you an option to enter your phone number so that it texts you a message notifying you of the transaction progress.
Keep the ticket as you will need it in the next step.
In this next step, you will have to log in to your mobile wallet, select the send bitcoin to another wallet option.
You will then scan the ticket with your phone’s camera, after which it will display the ATM’s wallet address and the amount of Bitcoin that needs to be sent.
Note: Keep the ticket. You will need it in later steps.
Press send and confirm to complete the transaction. The transaction will take a few seconds as the blockchain has to verify the transaction.
Once the transaction is complete, go back to the ATM and select the REDEEM TICKET option. If you opted to receive a text message, the ATM should notify you when the transaction is complete.
The ATM will prompt you to scan your ticket’s QR code into the machine.
Scan your ticket on the ATM’s screen. The ATM will indicate the location of the scanning screen on the main display.
After scanning your ticket, the machine will process the transaction.
The ATM will eject the cash below the screen for you to collect.
|Bitcoin ATM||Online Exchanges|
|Must be accessed physically.||Can be accessed digitally through a phone or computer.|
|Higher exchange rates.||Lower exchange rates.|
|A variety of ATMs but spread over a large distance.||A variety of exchanges are accessible easily by using the exchange app or website.|
|Some ATMs support buying and selling, while others only support buying.||Exchanges allow swapping of cryptocurrencies, buying, and selling.|
|Supports a few cryptos.||Supports a wide variety of cryptos.|
|Mainly deals with cash (a few support debit and credit cards).||Deals with debit cards, credit cards, bank transfers, and other payment methods.|
|Transactions are almost instant.||Most exchanges require a long KYC verification process to open an account and purchase Bitcoins.|
Bitcoin ATMs are increasingly becoming popular, and a lifesaver for many who can’t access the internet for various reasons. Countries like El Salvador have designated Bitcoin as a legal tender, further increasing the popularity of Bitcoin ATMs. However, before transacting crypto, take note of the exchange rate and determine whether the fees charged are worth it.
Written by Edmond K.