Key aspects
Bitcoin ATMs (ATMs or BTMs) allow users to buy and sell bitcoins (and sometimes other cryptocurrencies) using cash or debit cards.
If you are new to the crypto world, you should set up a cryptocurrency wallet before using a Bitcoin ATM.
Bitcoin ATMs are easy to use, but they charge high fees, usually much more than online alternatives, with costs sometimes reaching as much as 20% per transaction.
What is a Bitcoin ATM?
Have you ever wondered how you can buy bitcoins with cash? That's where Bitcoin ATMs come in!
A Bitcoin ATM is exactly what it sounds like: a bitcoin (BTC) ATM. It’s a physical machine, usually found in public places, that allows you to buy or sell BTC (and sometimes other cryptocurrencies) in exchange for cash or a debit card payment. It’s just like a traditional bank ATM, except it connects you to the exciting world of cryptocurrencies instead of connecting you to your regular bank.
How do Bitcoin ATMs work?
These ATMs are pretty straightforward. To buy bitcoins, you insert cash into the machine, scan the QR code on your wallet, and the ATM will automatically transfer the BTC to your wallet address. We’ll explain the steps in more detail below, but keep in mind that you’ll need to set up a cryptocurrency wallet if you haven’t already.
Depending on the location, these ATMs may offer both buying and selling services. However, some of these ATMs will only allow you to buy, while others will only allow you to sell.
If the ATM allows you to sell Bitcoins, you can do so by sending the coins from your wallet to the address provided by the ATM machine. Once the transaction is confirmed on the blockchain (which may take a while), the ATM will release the cash. Just make sure that the ATM you are using supports selling Bitcoin.
Any disadvantages? Commissions.
While Bitcoin ATMs can be very useful, this convenience doesn't come for free. Most cryptocurrency ATMs come with high fees. They can charge anywhere from 7% to 20% per transaction, which is much more than you'd pay at an online exchange.
For comparison, online cryptocurrency exchanges typically charge 1-4% for bank deposits or credit card purchases. On Binance, deposit fees can range from 0-2% depending on the currency, location, and payment method. If Binance P2P is available in your region, you can easily buy and sell cryptocurrencies online with very low fees.
So, while using a Bitcoin ATM is quick and easy, it is significantly more expensive. Some machines also have minimum and maximum transaction limits. For example, you may be required to purchase a minimum of $10 worth of bitcoins or be limited to a maximum purchase of a few thousand dollars per transaction. Always check these limits before you begin!
You should also be careful to choose an ATM with good recent reviews, which displays the owner's contact details, provides a pricing feed and a clear commission plan. There are fake machines out there, so this data can help assess the machine's authenticity.
Where can you find Bitcoin ATMs?
As Bitcoin has grown in popularity, so has the number of ATMs. Right now, there are tens of thousands of cryptocurrency ATMs around the world, most located in the United States, but they are also spreading to other countries.
You'll usually find them at places like gas stations, shopping malls, and airports. If you're looking for one, you can use online services like Coin ATM Radar to help you locate a Bitcoin ATM near you.
Advantages and disadvantages of Bitcoin ATMs
Advantages
Easy to use: Ideal for beginner users who want to get into the world of cryptocurrencies without having to deal with online exchanges.
Cash Payment: You can easily buy bitcoins with cash without using a bank account.
Relatively fast: you won't have to wait days like with some bank transfers.
Disadvantages
High Fees: Convenience comes at a price, and it's usually much higher than online alternatives.
Limited availability: While they are becoming more common, you may still have trouble finding one near you, depending on where you live.
Security risks: Be careful. Like any machine that handles money, Bitcoin ATMs can be subject to theft or fraud. There are also fake machines out there.
How do you use a Bitcoin ATM?
Want to try it out? Here's a quick guide on how to use a Bitcoin ATM:
Get a cryptocurrency wallet: You’ll need a wallet address to receive your bitcoins. Make sure you have one that can generate a QR code (e.g. the Binance App or Trust Wallet).
Find a Bitcoin ATM: Use an online locator like Coin ATM Radar to find the nearest machine. Be wary of fake machines. Choose an ATM with good recent reviews and clear information (owner contact details, price feed, fees, etc.).
Verify your identity: Some machines may ask for your phone number or photo ID. In some cases, it depends on how many bitcoins you are buying or selling.
Scan your wallet's QR code: When you're ready to buy, scan your wallet's QR code so the machine knows where to send your bitcoins.
Make a payment: Follow the on-screen instructions to insert your cash or swipe your debit card to choose the amount you want to spend.
Confirm the transaction: Once the blockchain confirms the transaction, your bitcoins will appear in your wallet. You may have to wait a while, depending on how busy the network is.
Should you use a Bitcoin ATM?
It depends. These ATMs can be a good option for those looking for an easy way to buy bitcoins with cash. But keep in mind that there are security risks and high fees can make your purchase much more expensive.
For most people, the convenience offered by Bitcoin ATMs doesn't outweigh the significantly higher costs and potential risks. The reality is that it's cheaper and safer to buy your first cryptocurrencies through reputable exchanges like Binance, which offer multiple payment methods in a variety of different currencies.
Further reading
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