- There are more than 35,000 Bitcoin ATMs in the world
- They still represent a convenient way to buy and sell bitcoin
- How do they work and what are the risks?
Bitcoin automated teller machines (ATMs) enable users to convert cash into BTC and vice versa. With over 35,000 Bitcoin machines worldwide, it’s likely you’ll encounter a Bitcoin ATM near you in your cryptocurrency journey. Therefore, it’s important to familiarize yourself with how to use a Bitcoin ATM. Below, we will answer the question ‘what is a Bitcoin machine?’, look at how it works and give you a step-by-step process on how to use one.
What is a Bitcoin ATM?
A Bitcoin ATM is an automated teller machine such as the one offered by traditional banks, differing from conventional ATMs in the sense that it facilitates crypto-fiat-crypto transactions. Just like an ordinary bank ATM connects you to your bank account, a BTC machine links to your Bitcoin wallet.
Introduced in 2013, the first Bitcoin machine was located in Canada, with Europe and the US following the next year. Since the introduction of the first Bitcoin machine, their existence in some jurisdictions has faced regulatory hurdles. Most Bitcoin ATMs operate under the same laws as legacy bank ATMs, and as such there are varying limits as to how much you can transact within 24 hours.
The United States accounts for over 80 percent of all BTC machines in operation worldwide today, followed by Europe. The bulk of the ATMs out there are located in populous cities, with some bigger cities, such as New York and London, having multiple locations. BTC machines hinge their popularity on ease of use, convenience, and security. Popular web resources such as CoinATMradar offer a ‘find Bitcoin ATM near me’ feature that helps locate an ATM closest to you.
How Do Bitcoin ATMs Work?
An ATM user typically needs to have a pre-created BTC wallet to access the machine’s services. How BTC machines work depends on whether they are ‘unidirectional’ or ‘bidirectional’ – unidirectional Bitcoin ATMs handle either the selling or buying of Bitcoin, while bidirectional machines support both buying and selling. Whether bidirectional or unidirectional, these machines require an active internet connection for them to successfully facilitate transactions as they need to send BTC to the provided Bitcoin wallet.
Since Bitcoin wallet addresses are made up of a complex alphanumeric phrase, Bitcoin machines prompt a user to enter their wallet address through a QR code tied to their wallet address. A successful transaction registers on a user’s wallet.
How to use a Bitcoin ATM
Below we will look at the typical steps needed to buy and sell Bitcoin using a Bitcoin ATM.
How to buy Bitcoin with cash using a BTC machine
Before you buy bitcoin on a Bitcoin ATM, you will need to have a Bitcoin wallet on your phone to receive the coins. The first thing you need is to select the ‘Buy Bitcoin’ option and agree to the terms of service. Then, provide your mobile phone number. This is required for identity verification purposes. The ATM sends a verification code to the mobile number provided. Successfully re-entering the code takes you on to the next step.
Now, you will be asked to scan your wallet QR code. The current breed of Bitcoin ATMs supports a wide range of crypto wallets, so any popular one should do. After scanning your BTC wallet’s QR code, it’s time to insert your cash into the designated slot. The machine will count it and let you know how much BTC you’ll be getting based on the fiat inserted. Ensure you know the transaction and processing fees before you accept.
If you are happy with what is indicated, hit the confirm option to close the transaction. You’ll need to select the ‘Done’ option for the machine to print a receipt. The purchased Bitcoin is delivered to the BTC wallet address provided.
Please note that the time it takes for the new BTC to land in your wallet depends on the amount of traffic on the Bitcoin blockchain. Increased traffic can lead to congestion, meaning that you’ll wait longer for your coins to arrive in your wallet. Normally, it takes less than an hour for the coins to arrive, but don’t panic if it’s not there within the first five minutes – as long as you scanned the QR code to your Bitcoin wallet, it will get there.
How to use a Bitcoin machine to sell bitcoin
The process of converting your BTC to fiat starts with selecting the ‘Sell’ option on the machine. This allows you to connect your wallet by, again, scanning its QR code. There’s also the option to manually input the address, but this is inadvisable due to the danger of getting it wrong when typing it in.
Next, verify your identity. This can be done by providing a mobile number, taking a photo, registering your fingerprint or scanning a government-issued document such as a driver’s license.
Select the amount of BTC you wish to sell. The machine then dispenses an equivalent amount in cash. Note that some ATMs dispense the amount immediately while others wait for the BTC transaction to be confirmed on the blockchain before you can receive your fiat. The final step is for you to print a receipt.
Risks of using a Bitcoin ATM
Whether you are reading this because you want to know how to use a Bitcoin ATM with cash, how to buy Bitcoin from an ATM or just how to use a Bitcoin machine, it’s important to be aware of the risks.
Bitcoin ATMs are fairly easy to use once you know the basics, but, as we mentioned earlier, there are transaction fees and processing fees to think about. This might mean that converting small amounts of cash to BTC isn’t worth it.
Also, Bitcoin cash machines have in the past been subjected to hacks, with criminals compromising both the software and the hardware to steal the bitcoin bought. However, this very rarely happens nowadays. If anything looks untoward, don’t use that machine.
We hope you found this guide on how to use a Bitcoin ATM useful. Given that there are different makes and models of Bitcoin machines, some of the steps when buying or selling bitcoin using a Bitcoin ATM may differ depending on the machine you are using.
However, the concept of how to use a Bitcoin machine is straightforward – just remember that Bitcoin transactions are irreversible, so double check your wallet details before you commit!