The world’s first publicly available Bitcoin ATM was introduced on October 29, 2013, in the Waves coffee shop in Vancouver, Canada. There are now more than 5,000 of these machines, which have sprung up across the globe as Bitcoin has gone from strength to strength.
In this article, we will look at what a Bitcoin ATM is, how a Bitcoin ATM works, and how to find one near you.
What is a Bitcoin ATM?
A Bitcoin ATM is just like a regular ATM where you’d use your credit or debit card to withdraw fiat, except you use cash to buy Bitcoins or you can sell your Bitcoins for cash.
There are multiple manufacturers of Cryptocurrency ATMs and can be classified into one of two ways; uni-directional Bitcoin ATMs only let you buy Bitcoins for cash whereas bi-directional Bitcoin ATMs allow both, buy Bitcoins with cash or sell Bitcoins for cash.
There are about 30 types of Cryptocurrency ATMs, which can vary in appearance with some very small while others are much larger. The Bitcoin ATM sector has about 20 different manufacturers, with some of the most popular being General Bytes and Genesis Coin.
How Does a Bitcoin ATM Work?
A Bitcoin ATM works similarly to a traditional ATM, where cash is stored in the machine if it is a bi-directional Bitcoin ATM, while all machines will allow you to insert banknotes. Cryptocurrency ATMs are connected to the internet so that they can track the live price on an exchange and updates the buy price and sale price accordingly.
If you want to buy Bitcoins, the machine’s camera will allow you to display your Bitcoin address with a QR code, which is then read by the Bitcoin ATM. Then you can insert the cash, and once the transaction is confirmed, the Bitcoins will be received to your wallet.
You can send Bitcoins to an address if you want to sell as the Bitcoin ATM will have a screen which will display a QR code. Alternatively, the machine may print a ticket out with the address and QR code for you to send the Bitcoins to. Once the transactions have a certain number of confirmations, you will be able to dispense your cash using a code or the ticker that was printed out.
How to Use a Bitcoin ATM
The general process for using a Bitcoin ATM to buy Bitcoins is pretty similar across different machines.
The first step is to find the Bitcoin ATM closest to you. Then depending on the verification requirements, you may be asked to provide a mobile phone number or some identification such as a passport or driving license. You will then need to enter a verification code in the Bitcoin ATM if you needed to provide a mobile phone number.
You will need a smartphone with a Bitcoin wallet installed to buy and sell Bitcoin. Whereas if you want to buy Bitcoin, you might only need a paper wallet with a QR code. Be sure to install a wallet on your phone before you go to the Cryptocurrency ATM; otherwise, you will not be able to receive or send your Bitcoins.
It is also important to keep in mind that if you are selling Bitcoin using a Bitcoin ATM, you will need an internet connection on your phone to broadcast the transaction. However, if you are buying Bitcoin, an internet connection is not necessarily needed since you only require access to the QR code and do not need to broadcast a Bitcoin transaction.
If there are any problems with the transaction, you can email or phone the operator who should be able to help.
If you are buying Bitcoin, then the machine will ask how much you want to buy, and you will have to perform the verification required.
Once this is done, you will then have to show or enter your Bitcoin address using a QR code, which can be done with any mobile Bitcoin wallet.
Then you can insert bank notes into the machine, and you will receive your Bitcoins shortly after.
If you are selling Bitcoin, then the machine will provide a Bitcoin address, either on screen or by printing a ticker.
Again, you must use your smartphone wallet to scan the QR code and send the Bitcoins to that address.
Once the transaction is confirmed – usually with two confirmations – then you will be able to dispense your cash. Typically, you will have a printed ticket or code sent as a text to your mobile phone to withdraw the cash.
How to Find a Bitcoin ATM Near Me?
The best way to find out where the nearest Bitcoin ATM is to use Coin ATM Radar, a website that maps the location of each Cryptocurrency ATM and lists various features, including:
- Type of Bitcoin ATM
- Operator’s name and contact details
- Limits and verification required
- Altcoin support, and
- Reviews from users
Some listings also report the Bitcoin ATM’s status, i.e., whether it is online or offline. Once you click on a listing, you can also see the nearest Bitcoin ATMs so you can compare fees and other features.
You can visit the website and type in your location, just like you would on Google Maps to find something, and get directions to the closest Bitcoin ATM.
Bitcoin enthusiasts also frequently post new sightings of Cryptocurrency ATMs on r/Bitcoin. Sometimes it may take a while for a machine to be listed on CoinATMradar so that you might see it on r/Bitcoin first.
What are the Fees for Using Bitcoin ATMs?
The fees you pay on Bitcoin ATM transactions vary depending on the operator and location.
Typically fees vary between at minimum 5 and 10 percent using live exchange rates and applying a premium when you buy Bitcoin. When you sell Bitcoin, the price is discounted by at least 8 percent from the live exchange price.
Fees can be much higher though, sometimes as high as 15 to 20 percent, so be sure to check Coin ATM Radar. You may have to visit the machine itself to get an accurate depiction of the fee, as for some listings it is not displayed.
While buying and selling Bitcoin through an ATM is more expensive than trading on an exchange, it can be a quicker and more convenient process. Setting up and verifying an exchange account or sending a bank transfer to the exchange might take a couple of days. Using a Bitcoin ATM also has novelty value, as who can say they are a true Bitcoiner if they have never bought some bits using an ATM?