Key points:
Bitcoin ATMs (or BTMs) allow users to buy and sell Bitcoin (and sometimes other cryptocurrencies) using cash or debit cards.
If you are new to cryptocurrency, you will first need to set up a crypto wallet to use Bitcoin ATM.
Bitcoin ATMs are easy to use, but charge high fees, often much higher than online alternatives, sometimes as high as 20% per transaction.
What is a Bitcoin ATM?
Have you ever wondered how you can buy Bitcoin with good old fashioned cash? This is where Bitcoin ATMs come into play!
Bitcoin ATM is exactly what you thought it would be: an automated ATM for Bitcoin (BTC). This is a physical machine, usually installed in public places, that allows you to buy or sell BTC (and sometimes other cryptocurrencies) in exchange for cash or payment with a debit card. It's like a traditional bank ATM, except it connects you to the exciting world of cryptocurrencies instead of a regular bank.
How do Bitcoin ATMs work?
Bitcoin ATMs are quite simple. To buy Bitcoin, you insert cash into an ATM, scan your wallet's QR code, and the ATM will automatically transfer BTC to your wallet address. We'll cover these steps in more detail below, but keep in mind that you'll need to create a crypto wallet if you haven't already.
Depending on the location, Bitcoin ATMs can offer both buying and selling services. However, some Bitcoin ATMs only allow you to buy, while others only allow you to sell.
If the ATM allows you to sell Bitcoin, you can do so by sending coins from your wallet to the address provided by the machine. Once the transaction is confirmed on the blockchain (this may take some time), the ATM will transfer the cash. Just make sure the ATM you're using supports the sale.
What is the trick? Commissions!
While Bitcoin ATMs can be convenient, such convenience does not come for free. Most cryptocurrency ATMs have quite high fees. They can charge anywhere from 7% to 20% per transaction, which is much more than you would pay on an online exchange.
In comparison, online cryptocurrency exchanges typically charge between 1% and 4% for bank deposits or credit card purchases. On Binance, deposit fees can vary from 0% to 2%, depending on your currency, location and payment method. If the Binance P2P platform is available in your area, you can easily buy and sell cryptocurrency 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 need to buy at least $10 worth of Bitcoin or limit yourself to a maximum purchase of a few thousand dollars per transaction. Always check these restrictions before you start!
You should also be careful and choose an ATM with good recent reviews that displays the owner's contact details, provides pricing information and a clear fee schedule. There are fake ATMs, so this data can help determine their authenticity.
Where can you find Bitcoin ATMs?
As the popularity of Bitcoin grows, so does the number of ATMs. Currently, there are tens of thousands of cryptocurrency ATMs around the world, most of which are located in the US, but they are expanding to other countries as well.
They can often be found at gas stations, shopping centers and airports. If you are looking for such an ATM, you can use online services such as Coin ATM Radar to help you find the nearest Bitcoin ATM.
Advantages and disadvantages of Bitcoin ATMs
Pluses
Ease of use. Great for beginners who want to dive into the world of cryptocurrencies without having to deal with online exchanges.
Convenient cash payment. You can easily buy Bitcoin for cash without using a bank account.
Relative speed of transactions. There is no need to wait several days, as is the case with some bank transfers.
Cons
High commissions. Convenience comes at a price, and it's often much higher than online alternatives.
Limited availability. Although such ATMs are becoming more and more common, it may still be difficult for you to find one near you, depending on where you live.
Security risks. Exercise caution. Like any money-handling device, Bitcoin ATMs can be subject to theft or fraud. There are also fake ATMs.
How to use a Bitcoin ATM?
Want to try it? Here's a quick guide to using a Bitcoin ATM.
Create a crypto wallet. To receive Bitcoin, you will need a wallet address. Make sure you have a wallet that can generate a QR code (eg Binance app or Trust Wallet).
Find a Bitcoin ATM. Use an online locator such as Coin ATM Radar to find the nearest ATM. Be careful not to stumble upon a fake ATM. Choose an ATM with good recent reviews and clear information (owner contact details, price information, fees, etc.).
Confirm your identity. Some devices may ask you to provide a phone number or photo ID. In some cases, it depends on the amount of Bitcoin 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 payment. Follow the on-screen instructions to deposit cash or swipe your debit card for the amount you want to spend.
Confirm the transaction. When the blockchain confirms the transaction, your Bitcoins will appear in your wallet. You may have to wait a bit depending on how busy the network is.
Should I use a Bitcoin ATM?
It depends on the circumstances. Bitcoin ATMs can be a good choice for those looking for an easy way to buy Bitcoin for cash. But remember that there are security risks and high fees can make your purchase much more expensive.
For most people, the convenience that Bitcoin ATMs provide is not worth the significantly higher costs and potential risks. The reality is that it is cheaper and safer to buy your first cryptocurrency through reputable exchanges such as Binance, which offer multiple payment methods in different currencies.
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