In 2021, 23% or nearly one in four people in the U.S. owned or invested in at least one cryptocurrency. That translates to a staggering 59.6 million Americans! Moreover, it shows an increase of 7% from 2020, when only 41.5 million were owners or investors.
Card giants have also begun investing in digital currencies. A perfect example is Visa. It said customers paid $2.5 billion with crypto-linked cards in the first fiscal quarter of 2022 alone.
So, it’s not surprising that you can now find and use a Bitcoin ATM machine in the U.S. and other countries. After all, these electronic kiosks let you buy Bitcoin, the most popular cryptocurrency.
But how exactly does a Bitcoin ATM work, and how do you get started using one? Do you need a separate bank account to transact with these machines?
We’ll answer all those questions in the guide below, so keep reading.
What Is a Bitcoin ATM Machine?
A Bitcoin ATM is a stand-alone electronic kiosk that looks much like a traditional ATM. However, it’s specifically for buying Bitcoin and, sometimes, other cryptocurrencies. Some machines also allow users to purchase and sell digital currencies.
There are two types of Bitcoin and other cryptocurrency ATMs: unidirectional and bi-directional.
Unidirectional machines only allow for one-way transactions. In short, they only let you buy but not sell Bitcoin and other cryptocurrencies (or vice-versa). In most cases, though, these ATMs only enable users to make purchases.
On the other hand, bi-directional machines allow you to perform both transactions. These ATMs also usually support different types of crypto, such as Ethereum (ETH). Here’s a guide where you can find more info about ETH.
How Do Bitcoin ATMs Work?
Since Bitcoin is a digital currency, a Bitcoin ATM must first have an Internet connection. That allows the machine to link with an online cryptocurrency exchange. Then, the transaction takes place on a blockchain, a technology for crypto transactions.
Unlike traditional ATMs, though, crypto ATMs don’t link to a standard bank account. Instead, they connect to a user’s digital wallet.
Thus, you don’t need a separate bank account to use a Bitcoin ATM, but you need to have a digital crypto wallet. It’s an app where an ATM sends the crypto you buy from it. Likewise, it’s where the machine takes the Bitcoin you want to sell in exchange for cash.
What Are Bitcoin ATM Requirements?
As mentioned above, you need to have a digital wallet to start using Bitcoin and crypto ATMs. Ensure you choose a wallet that supports Bitcoin, like Coinbase, Mycelium, or BitPay. These three have mobile apps you can download straight onto your phone.
Also, consider going for a digital wallet that supports various cryptocurrencies. Do so, and you won’t have to get another app if you invest in other cryptocurrencies, like ETH or Dogecoin.
Once you’ve chosen a digital wallet for crypto, create an account with the platform. Some hosted wallets require personal information, such as your name and mobile number. The latter is often necessary as some wallets conduct multi-factor authentication (MFA).
Where Can You Find Bitcoin ATMs?
Once you have a Bitcoin wallet, the next step is to locate the nearest Bitcoin ATM. Fortunately, there are roughly 34,000 of these machines worldwide, with over 30,000 in the U.S. alone. Canada also boasts more than 2,000, so if you’re in North America, you don’t have to worry about not finding one near you.
To find a specific crypto ATM location, search online using the keywords “Bitcoin ATM near me.” However, ensure you turn on your device’s location tracking service first. That will help provide you with more accurate results.
Once the results come out, you can choose one of the websites with map-based locations. You can then check how far an ATM is from you and even directions to get there.
How Do You Use Bitcoin ATMs?
Bitcoin ATMs have specific processes, but all require users to verify their identities. And for this, you need a valid mobile phone number, and your phone should be Internet-connected. The last one is a must to access your Bitcoin wallet, which will generate a QR transaction code.
Once you’re at the Bitcoin ATM, you may need to perform the following steps:
Provide Your Phone Number
The first thing that most Bitcoin ATMs ask users is the phone number linked to their Bitcoin account. For the most part, this is for identity verification. The machine may send a text message containing a code or a one-time pin (OTP) to the provided phone number.
Complete the Identification Verification Process
The ATM you’re transacting with may then ask you to input the verification code sent to your phone number.
The incoming message may look like, “Your one-time pin is 192837,” or “Your code is 675849.” Either way, you need to input that series of numbers into the Bitcoin ATM to proceed with the transaction.
Some Bitcoin ATMs may also require other proof of identity, such as a photo ID. In this case, you’d need to scan your ID using the machine’s built-in camera. This extra step is more common for larger-sized transactions.
Scan the QR Code
Once the machine has verified your identity, it will likely ask you to scan a QR code from your digital wallet. This code confirms your Bitcoin wallet address. Bitcoin ATMs need this info to connect to the appropriate crypto account.
That’s also why you need an Internet connection; it allows you to launch your crypto wallet. Then, once open, you can generate or display the QR code from the wallet.
You then have to scan the QR code into the Bitcoin ATM.
Select Your Desired Transaction
After confirming your Bitcoin wallet address, the ATM then asks you what you want to do. At this point, you can choose to buy or sell Bitcoin.
If you want to buy Bitcoin, select the option that says something like “Buy Bitcoin.” Then, insert the appropriate amount of cash into the machine’s receptacle. The ATM may also ask you to input the amount you want to purchase.
The Bitcoin ATM then counts the cash you inserted. After that, it displays the equivalent value in Bitcoin. So, for example, if you placed $500 in it, it may show a message saying “$500 = 0.0257 BTC.”
If you want to sell Bitcoin, choose the option “Sell Bitcoins.” Then, on the next screen, the machine may ask you to input the value in dollars or the amount of Bitcoin you wish to sell. So, it may be something like $500 or 0.0257 Bitcoins.
Confirm and Complete the Transaction
If you’re buying Bitcoin, double-check that the amount on the screen matches what you placed in the ATM. If so, tap or select the “Buy” or “Confirm” option. If everything goes as it should, the ATM should send your purchase to your Bitcoin address.
How long it takes for the purchase to reflect on your digital wallet varies. Sometimes, it may take as little as 10 minutes, but in other cases, it may take up to an hour or more.
If you’re selling Bitcoin, you only have to confirm that the value you entered is correct. Next, select the “Sell” or “Confirm” option. And if the transaction goes smoothly, the ATM should display a message saying it did.
The machine may then issue a receipt for the sale, usually with a QR code. This code is the digitized address where you need to send the Bitcoin you’re selling. In this case, you need to scan the code with your crypto wallet.
After confirming the transaction, the machine then dispenses your cash. Count the money and make sure it matches the amount you entered.
What Fees Do Bitcoin ATMs Charge?
Like many traditional ATMs, Bitcoin ATMs also charge transaction fees.
The chief difference is that crypto ATMs have higher fees, ranging from 4% to 20% of the transaction amount. So if you buy $500 worth of Bitcoin via an ATM, prepare to pay an extra $20 to a whopping $100.
That said, it pays to check Bitcoin ATM reviews before transacting with them. They often have information about transaction fees and hidden charges. If the one nearest you charges exorbitant fees, look for another one that may have lower rates.
Also, note that many Bitcoin ATMs have minimum and maximum transaction limits. For example, some may only allow you to buy and sell between $50 and $5,000, nothing more, nothing less.
Buy and Sell Bitcoin With ATMs
And there you have it, your ultimate Bitcoin ATM machine guide. Now you know what these machines do, how they work, where to find them, and how to start using them.
At the same time, you’ve also learned that Bitcoin ATMs come with higher fees, so it’s a must to do your due diligence. Then, as much as possible, use only those with low-rate transaction fees and no hidden charges.
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