Bitcoin is popular for its cryptocurrency, which millions of people worldwide buy, sell, and trade on cryptocurrency exchanges. However, one of the great initiatives and technological advancements that came with the cryptocurrency is a Bitcoin automated teller machine (ATM).
Like conventional teller machines, these devices allow people to carry out financial transactions, but they are built for cryptocurrencies and not cash. However, since they are relatively new to crypto beginners this article explores how Bitcoin ATMs work.
What Are Bitcoin ATMs?
Bitcoin ATMs (or BTMs) are physical locations where people can buy Bitcoin and other cryptocurrencies using physical fiat money. In some cases, these BTMs also allow users to sell their digital assets. So, Bitcoin ATMs are alternative methods to safely buy and sell BTC outside of cryptocurrency exchanges.
That way, users don’t need an exchange account to get transactions done. Instead, their transactions are managed by third-party companies who own and operate the machines. Some examples include notable brands like Coinhub and Coinme.
How Do Bitcoin ATMs Work?
While BTMs may seem complicated initially, the ironic thing is that they are very easy to use. The average crypto ATM works like the conventional one, allowing people to use their credit/debit cards or physical cash for transactions. Once you insert a card or cash into the machine, you can exchange your traditional currency for Bitcoin.
There are over 30,000 Bitcoin ATMs in the United States. However, while they are accessible, they may require users to have accounts with the operators. For instance, if you want to use a Coinhub BTM, you need a valid account to get transactions done at the ATM.
When you execute transactions, the machine works using live exchange rates and coin prices to determine how much fiat or crypto you get.
Unlike regular ATMs, the entire transaction happens on the blockchain. So, there are no intermediaries or errors. Basically, the transaction process should be completed using the following steps:
Choose a Bitcoin ATM
Whether you want to buy or sell Bitcoin using an ATM, the first step is to locate a Bitcoin ATM near you. The easiest way to do this is to check your provider’s website or contact them. Alternatively, you can use a Bitcoin ATM locator app to find the nearest kiosk.
However, some Bitcoin ATMs require identity verification. So, you should consider going along with a valid government-issued ID document.
Enter the Amount of Bitcoin to Buy or Sell
At the machine, press the “Buy Bitcoin” button and enter the amount of BTC you want to purchase. If you want to sell, use the “Sell Bitcoin” option and enter the amount of Bitcoin to sell. The ATM will convert it to cash using real-time rates and let you know the amount in your selected currency.
Enter Your Wallet Address
Provide the wallet address you want to receive Bitcoin with or withdraw Bitcoin from. You can do this by entering the wallet address manually or by scanning its QR code.
Slot in Your Credit/Debit Card or Cash
If you’re buying Bitcoin, you need to provide a card or deposit cash equivalent to the amount provided by the teller machine. If you’re selling, all you need is your crypto wallet.
Complete the Transaction
The ATM completes the conversion from cash to Bitcoin and credits your wallet. Likewise, the ATM sends the crypto out of your wallet and dispenses cash to you.
Are Bitcoin ATMs Safe?
Bitcoin ATMs are safe and secure. Though they get access to your crypto wallet, only your public key is shared with the machines. That way, your private keys remain unknown and your wallet cannot be hacked.
Moreover, Bitcoin ATMs use encryption technology to protect their machines from security breaches. Some also have identity verification systems for additional security.
Benefits and Risks of Bitcoin ATMs
Buying and selling Bitcoin using crypto ATMs is very convenient because you don’t need to sign up for an exchange account or many steps to buy or sell Bitcoin. Moreover, some ATMs don’t require personal information, so privacy is enhanced.
However, on the other side of things, Bitcoin ATM fees are high. Some charge transaction fees as high as 20%, while others don’t disclose their charges. Plus, most Bitcoin ATMs are limited to BTC. Only a few support other cryptocurrencies.
Conclusion
Bitcoin ATMs provide an alternative way of buying and selling BTC or other cryptocurrencies using fiat currencies. They are more convenient options than crypto exchanges. However, potential issues like the limited number of Bitcoin ATMs and high exchange fees call for caution.
Manage, Store, and Trade Bitcoin With the Zypto Wallet
Whether you want to store your Bitcoin safely or you need a crypto wallet for buying and selling Bitcoin using ATMs, the Zypto Wallet is the ideal option. With support for thousands of assets, you can enjoy unlimited access to the crypto market under top-notch security. Visit the Zypto website to learn more.
Have you ever used a Bitcoin ATM to buy or sell crypto? What was the experience like? Share with us in the comment section below.
FAQs
Do Bitcoin ATMs require IDs?
Yes, virtually all Bitcoin ATMs require KYC. That means users must submit proof of ID like a government-issued passport or license.
Do Bitcoin ATMs pay cash?
Yes, many Bitcoin ATMs allow users to trade their BTC for cash. Once the ATM verifies your Bitcoin ownership, it’ll dispense the amount of Bitcoin you sell to you in your local currency.
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