Key points to remember
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 need to set up a crypto wallet before using a Bitcoin ATM.
Bitcoin ATMs are easy to use but charge high fees, typically much higher than online solutions, with costs sometimes reaching up to 20% per transaction.
What is a Bitcoin ATM?
Have you ever wondered how you can buy bitcoins using old-fashioned cash? That’s where Bitcoin ATMs come in!
A Bitcoin ATM is exactly what you think of: an ATM for Bitcoin (BTC). 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 like your bank’s traditional ATM, except it connects you to the exciting world of crypto instead of your regular bank.
How Bitcoin ATMs Work
Bitcoin ATMs are pretty straightforward. To buy bitcoin, you insert cash into the machine, scan your wallet’s QR code, and the ATM will automatically transfer the BTC to your wallet address. We’ll cover the steps in more detail below, but keep in mind that you’ll need to set up a crypto wallet if you haven’t already.
Depending on the location, Bitcoin ATMs may offer both buying and selling services. However, some Bitcoin ATMs will only allow you to buy, and others will only allow you to sell.
If the ATM allows you to sell bitcoin, you can do so by sending the cryptocurrencies in your wallet to the address provided by the machine. Once the transaction is confirmed on the blockchain (which can take some time), the ATM will release the money. Just make sure you know if the ATM you’re using supports selling.
What's the catch? The fees!
While Bitcoin ATMs can be convenient, such convenience doesn’t come for free. Most crypto ATMs charge 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.
For comparison, online crypto exchanges typically charge between 1% and 4% for bank deposits or credit card purchases. On Binance, deposit fees can range from 0% to 2%, depending on your 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’s significantly more expensive. Some machines also have minimum and maximum transaction limits. For example, you may need to purchase at least $10 worth of Bitcoin or be limited to a maximum purchase of a few thousand dollars per transaction. Always check these limits before you jump in!
You should also be careful to choose an ATM with good recent reviews, that displays the owner's contact information, provides a price feed and a clear fee schedule. Fake machines do exist, so this data can help assess their authenticity.
Where can you find Bitcoin ATMs?
As Bitcoin has grown in popularity, so has the number of automated teller machines (ATMs). Currently, there are tens of thousands of crypto ATMs worldwide, the majority of which are located in the United States, but they are also spreading to other countries.
You’ll often find them in places like gas stations, malls, and airports. If you’re looking for a Bitcoin ATM, you can use online services like Coin ATM Radar to help you locate a Bitcoin ATM near you.
Advantages and Disadvantages of Bitcoin ATMs
Benefits
Easy to use: Ideal for beginners who want to get started with crypto without having to deal with online exchanges.
Cash-friendly: You can easily buy bitcoins with cash without using a bank account.
Relatively fast: no need to wait days like with some bank transfers.
Disadvantages
High fees: Convenience comes at a price, and it’s often much higher than online solutions.
Limited availability: Although they are becoming more common, you might still have trouble finding one nearby, depending on where you live.
Security risks: Be careful. Like any machine that handles money, Bitcoin ATMs can be targets for theft or fraud. There are also fake machines.
How to use a Bitcoin ATM?
Want to try this type of ATM? Here’s a quick guide on how to use a Bitcoin ATM:
Get a crypto wallet: You’ll need a wallet address to receive your bitcoin. Make sure you have one that can generate a QR code (e.g. Binance app or Trust Wallet).
Find a Bitcoin ATM: Use an online locator like Coin ATM Radar to find the nearest machine. Beware of fake apps. Choose an ATM with good recent reviews and clear information (owner contact information, price feeds, fees, etc.).
Verify your identity: Some machines may ask for your phone number or photo ID. In some cases, this depends on the amount of bitcoin you are buying or selling.
Scan your wallet QR code: When you're ready to buy, scan your wallet QR code so the machine knows where to send your bitcoin.
Make the payment: Follow the on-screen instructions to insert your money or insert your debit card to enter the amount you wish to spend.
Confirm the transaction: Once the transaction is confirmed by the blockchain, your bitcoin will appear in your wallet. You may have to wait some time, depending on how busy the network is.
Should I use a Bitcoin ATM?
It depends. Bitcoin ATMs might be an ideal choice for those who want an easy way to buy bitcoin 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 isn’t worth the significantly higher costs and potential risks. The reality is that it’s cheaper and safer to buy your first crypto through reputable exchanges like Binance, which offer multiple payment methods in a variety of different currencies.
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