What is a Bitcoin ATM?
A Bitcoin ATM kiosk (BATM or BTM) are physical machines that allow you to buy or sell Bitcoin and other cryptocurrencies using cash in person. These machines allow for quicker ways to buy or sell bitcoin and offer advantages over other methods in the form of convenience, privacy, and security.
The world's first Bitcoin ATM opened in Vancouver, Canada in 2013. Since then, the ATMs have grown at an exponential rate. On average, about 30 are currently being deployed per day around the world. This is only expected to increase over time as more people learn about Bitcoin.
Bitcoin ATMs are heavily concentrated in North America and Europe. Currently, 90% of are located in North America, while only 9% are located in Europe. Living outside these areas will most likely require you to seek alternative methods to purchase Bitcoin.
The 3 most supported cryptocurrencies found on these ATMs are Bitcoin, Litecoin, and Ethereum. Any other cryptocurrencies are far less supported by operators. Meaning, unless youâre purchasing one of the top three, youâll need to use an online exchange.
Types of Bitcoin ATMs?
There are two types of Bitcoin ATMs. The first are called âone-wayâ which only allow you to buy Bitcoin. The second type are âtwo-wayâ which allow you to buy and sell Bitcoin. This is because the ones that allow you to do both (often called two-way Bitcoin ATMs) are much larger and costly to operate.
As of now, 75% of all Bitcoin ATMs in the world are one-way and the remainder 25% are two-way. If youâre looking to sell your Bitcoin, itâs always good practice to call or email in advance of visiting an ATM as the far majority only allow you to buy.
Advantages of Bitcoin ATMs?
With popular online exchanges such as Coinbase, Kraken, and other platforms that offer you the ability to buy or sell cryptocurrencies from the comfort of your home, you may wonder why you would choose to use a an ATM. Here are a few reasons to use a Bitcoin ATM
Convenience
Bitcoin ATMs are commonly located inside of convenience stores, shops, taverns, restaurants, malls or airports. Most ATMs are located in North America and Europe, with the majority placed in the United States, Canada, and across Europe. This means if you live in any of these areas, thereâs a good chance an ATM is located near you. This enables convenience of buying or selling Bitcoin the same day.
Instant
Transactions made at Bitcoin ATMs are completed instantly. After inserting the cash into the machine, your funds are instantly converted into Bitcoin and sent to your wallet of choice. Within a few minutes, youâll see the Bitcoin inside your personal wallet.
Minimal Verification
Most trading is done on online cryptocurrency exchanges. These exchanges are required to ask you for your personal information. You are also required to submit government issued identification and a proof of address. Exchanges need this information to comply with Know Your Customer (KYC) and Anti-money laundering regulations to operate.
With Bitcoin ATMs, there are often little to no requirements to submit identification before purchasing. Although, this is very country specific, meaning each country has their own set of rules and regulations that ATM operators must follow.
Oftentimes, providing more identification will enable you to purchase higher sums of Bitcoin. Remember, each ATM operator has different requirements and you should visit the ATM location or operator website to learn exactly what you will need.
How to use a Bitcoin ATM?
Each Bitcoin ATM operates slightly different. However, the general process to buy at all bitcoin ATMs is as follows:
- Provide verification (optional and varies substantially depending on the ATM operator)
- Scan your bitcoin address (QR code) to make a deposit
- Insert cash one bill at a time
- Confirm purchase (the coins are instantly transferred to your wallet)
- Get a receipt emailed or texted as proof of purchase
Each ATM operator will use slightly different steps. The amount of verification in step 1 greatly depends on the country you live in. Oftentimes, by providing your ID, will enable you to access higher purchasing limits. The remainder of the steps are closely similar between the different operators.
Bitcoin ATM Fees
ATMs are often the most expensive options when buying or selling Bitcoin. This is because operating a Bitcoin ATM company is expensive and most operators will pass on those costs to the customer.
Most operators charge a buying fee between 7% and 12% with the average being about 8.5%. The average selling fee is about 5.5%.
The ATM operators will add the fee on top of the cost of Bitcoin. This means if the market price of Bitcoin is $50,000, they will charge you on average $55,850 for Bitcoin. If youâre looking to sell Bitcoin and the market price is $50,000, you will get $49,450 with fees included.