If you are a Bitcoin trader or investor – or simply curious about crypto, you might have heard of Bitcoin machines also referred to as Bitcoin ATMs. As the name suggests, they are similar to a normal ATM but the obvious difference is the form of currency a person can access. Instead of cash, you can withdraw and deposit cryptocurrency into your online wallet.
You want to learn more? Keep reading…
What are Bitcoin ATMs?
In this article, I will answer the questions of ‘What is a Bitcoin machine?’, how to use it, Bitcoin machine locations, and the price of owning a Bitcoin machine.
Also known as BTMs, these are small electronic kiosks similar to normal cash-based automated teller machines where you can buy and sometimes sell Bitcoin.
First opened in October 2013, the first ATM was from Robocoin and was located in Waves Coffee Shop in Vancouver, Canada. It is recognized as the first Bitcoin ATM although it was closed in 2015.
Europe followed at the end of 2013 in Bratislava Slovakia. Early 2014 saw the first ATM in North America opened in Albuquerque although it operated for only a month.
BTMs connect to your Bitcoin wallet instead of to a fiat bank account. Some Bitcoin machines are actual ATMs that have been installed with custom Bitcoin software.
Bitcoin ATMs are owned and operated by third-party companies — two with the largest networks are Bitcoin Depot which state they are the largest BTM network in North America.
Another popular network is Coinme which pirates over 40,000 Biticoin machine terminals. Different ATMs sell different currencies such as Ether, Bitcoin cash, Litecoin, and Dash to name a few.
Regulations have been an issue for these machines much like cryptocurrency itself. They are currently governed by the same rules as standard ATMs including:
- Limiting the number of transactions an individual can make in one day.
- Following Anti-Money: Laundering (AML) regulations adhered to by all banks in the USA.
- Registration of all operators with the Financial Crimes Enforcement.
- Network (FinCEN).
Some Bitcoin users have complained about the loss of anonymity around using a BTM because of the verification required especially for large transactions.
Types of Bitcoin ATMs
There are two types of BTMs mainly:
- Bidirectional Machines. These are two-way machines that can be used to both buy and sell crypto.
- Unidirectional Machines. These machines can only buy or sell Bitcoins – they are not capable of performing both types of transactions.
If you are new to cryptocurrency, using a machine that is similar to normal ATMs will surely put you at ease.
How to Use a Bitcoin Machine
- Step 1: Create a Cryptocurrency Wallet
The second thing you will need is an active cryptocurrency wallet that supports your cryptocurrency of choice. If you are looking to buy and sell Bitcoins, it is probably easiest to download the Bitcoin Wallet App to your device.
This convenient-to-use wallet allows you to sell, buy, and invest in crypto all from one place. It also provides features such as advanced security and in-app access to information to help track your currencies.
- Step 2: Find a Bitcoin Machine
As I will explain in more detail in the below section, there are thousands of BTCs across the world. There are many location finders online and some of the Bitcoin terminals are in the links below.
- Step 3: Buy/Sell Bitcoin From the ATM
If you want to buy Bitcoin start by inputting the amount of Bitcoin you wish to buy.Depending on the regulations in your area along with the amount you wish to purchase, you may have to verify your identity. This could be through a code sent to your phone, or by you scanning an official government issues document.
The next step in the buying process is to find your Bitcoin address and scan the QR code of the address.
This short video will explain how to get your wallet address. You do this by pointing the provided QR code at the Bitcoin machine’s camera.
You can use cash to pay the amount displayed on the screen. Some machines also allow payment using a credit card or mobile payment application. Within a few minutes, you should receive the coins in your wallet. after which a confirmation will be sent to your wallet app.
This infographic shows the selling process in five simple steps.
Selling Bitcoin is a process similar to buying crypto with some slightly different steps. You will begin by entering the amount you want to sell in the machine and verify your identity if necessary. The machine will display an address in your wallet which you can use to send the Bitcoins.
After sending the crypto, the machine will give you your money and you can also track the status of your transaction using your mobile wallet.
By following the above steps you will be able to quickly buy and sell Bitcoins.
Can You Buy Bitcoin on an ATM Machine With a Debit Card?
The short answer is yes, you can buy Bitcoin with a debit card. The process is almost the same as above except you insert your debit card to complete payment instead of cash.
The first company to offer debit card payments is General Bytes in collaboration with Värdex Suiss. This unique Bitcoin machine is equipped with card payment terminals that have broadened their reach and convenience (on their website GeneralBytes provide detailed specs of all the Bitcoin machines they produce).
Advantages of Using a Bitcoin Machine
Some of the pros of using a BTM include:
- It is accessible to people who may not have stable Internet access.
- A large number of Bitcoin machines globally gives many people access to BTMs.
- For people who do not wish to have traditional bank accounts Bitcoin teller machines still give users access to funds.
- The machines are a quick, convenient way to trade Bitcoins.
- There is no hassle of carrying physical bank cards.
Disadvantages of Using a Bitcoin Machine
- Since machines are regulated, there may be limits to the amount you can withdraw or deposit.
- Most locations need to verify your identity meaning there is no longer 100% anonymity.
- The transaction fees for buying and selling Bitcoins using BTMs can be very high, up to 15%. You will need to take note of potentially substantial transaction fees so I urge you to conduct enough research to find out any hidden costs.
Let me expound on this briefly below.
Do Bitcoin ATMs Charge a Fee?
Bitcoin machines have fees of between 5-15% of the total transaction costs. This is comparable to online exchanges that may offer less than 1% transaction fees. Some ATMs may also charge varying miners’ fees that are paid to them to verify blockchain transactions.
Bitcoin Machine Locations – or how to find it near you
You are now wondering “Where can I find a Bitcoin machine?“. Well, you are in luck because there are currently over 63,000 Bitcoin vending machines across the United States. As we have mentioned, two of the largest networks that provide BTCs are Bitcoin Depot and CoinMe which have numerous locations.
By visiting their websites, you can find a Bitcoin machine. CoinMe machines are also located in participating MoneyGram outlets. Machines are usually found in cafes, specialty shops, airports, and train stations.
For businesses looking to host a Bitcoin machine in a commercial space, all you need to do is contact a reputable provider, send your business name, and sign a contract. The provider will normally provide full installation.
Depending on the model and time of development, they can cost between $3.000 and $14,500.
My personal experience using Bitcoin machines
In this article, I believe I have defined what a Bitcoin machine is, and answered the question of “What does a Bitcoin machine do?”. I have also looked at the fees involved with using a BTC ATM and finally, I have identified websites that can help you find locations near you as well as mentioning places where ATMs can typically be found. The popularisation of Bitcoin machines means they are now easy to find and convenient to use as well as providing a novel solution.
As the world moves to a more digitally-based environment, and larger amounts of digital assets are moved, the need for these machines will certainly be on the rise.
Remember, I advise you to use cheaper online exchanges and to do proper research to find the Bitcoin teller machines with the lowest fees.
I hope this article is informative and please note, that this is not investment advice, but is created to be used for educational purposes and to provide comprehensive information.