Skip to content
Unlock the Secrets of Making Money with Bitcoin in 2024!
Subscribe And Get A Free Bitcoin Trading E-Book
Luis Clark
Luis is a personal finance expert who has been passionate and writing about crypto for more than five years.
Table of Contents
Add a header to begin generating the table of contents
How to Buy Bitcoins from ATM? Complete Guide
Luis Clark
Luis is a personal finance expert who has been passionate and writing about crypto for more than five years.
Bitcoin automated teller machines (ATMs) enable users to buy and sell digital assets anonymously using fiat currency. The machine essentially allows users to bypass the current financial system and buy their preferred digital assets, as users can just insert cash and buy Bitcoin in return. Although it looks like a traditional ATM, a Bitcoin ATM links directly to the underlying network and does not use any payment processors or banks.
Want to know how to buy Bitcoins from ATM? This guide should be useful and guide you how to use a Bitcoin ATM. We’ll explore Bitcoin ATMs and how to buy crypto with cash.
What Are Bitcoin ATMs?
With these machines users can buy and sell Bitcoin and other cryptocurrencies with cash. Despite their name, these ATMs do not connect to a user’s regular bank account. Instead, they connect to the underlying network. Bitcoin ATMs resemble traditional ATMs but operate differently as it allows users to purchase Bitcoin.
Bitcoin ATMs are kiosks that people can use to interface with the underlying blockchain technology. Users can avoid intermediaries like banks by executing Bitcoin transactions directly using cash.
A Bitcoin ATM can also print a QR code portraying the digital asset on paper.
Robocoin, a Bitcoin ATM operator in Vancouver, Canada, launched the first Bitcoin ATMs in 2013. In 2015, the company ceased operations. And the services provided by the Robocoin-created ATMs were limited. For example, they only allowed users to purchase Bitcoins in their Bitcoin wallet. Although it provided users anonymity, they could not withdraw cash from the Bitcoin ATM or purchase other crypto assets.
Subsequent efforts have built on these lapses, and a number of Bitcoin ATMs now provide choices for buying and withdrawing money to a user’s Bitcoin wallet. Some even provide the option to purchase other cryptocurrencies such as Litecoin, Bitcoin Cash, Ethereum, and Dash.
Bitcoin ATMs have a scanner, a cash dispenser, a USB stick dongle, and a computer monitor to view transaction details. Users can also plug in their hardware wallet to purchase or sell Bitcoin and other tokens directly from the machine. The latest generation of Bitcoin ATMs even includes a QR code reader. Users can easily scan the QR code displayed on the monitor with their mobile device for seamless transactions.
There is no set rate for purchasing Bitcoin and other cryptocurrencies at a Bitcoin ATM because the price is determined by the current trading price of the underlying crypto asset. These digital asset ATMs have fees varying depending on the ATM operator. The fee is generally quite hefty and ranges from 9% to 12%.
How Do Bitcoin ATMs Work?
A BTC ATM uses the same transaction system as traditional ATMs but is connected to a blockchain network instead. To initiate a transaction, Bitcoin ATMs connect to the underlying network. The digital asset is transferred to their crypto wallet when a user inserts cash into the machine to buy Bitcoins. The Bitcoin ATM dispenses cash after a transfer is made to the randomly generated wallet address on the ATM monitor screen to sell an asset from a Bitcoin wallet.
The process is usually quick, smooth, and simple. Users who do not already have a Bitcoin wallet can easily create one on the spot and deposit their cryptocurrency.
Bitcoin ATMs are especially useful for users who want to maintain their privacy. Because the user only interacts with their digital wallet address, the process is usually anonymous. However, Bitcoin ATMs typically have limits, varying greatly depending on the ATM the user chooses.
Types of Bitcoin ATMs
Since 2013, Bitcoin ATMs have come a long way, and many new developments have swept into the space. In addition to the expanded crypto support structure, a new fleet of BTC ATMs provides even more functionality.
The first is a one-way ATM, while the second is a two-way ATM. Users can only initiate crypto purchases with cash at one-way or unidirectional ATMs. A user can only purchase Bitcoin in exchange for fiat currency. The purchased asset is then forwarded to the user’s Bitcoin address. These ATMs are the first batch of Bitcoin ATMs.
The two-way or bi-directional Bitcoin ATM is the inverse of the former. This one enables users to buy and sell Bitcoins and other digital currencies.
Meanwhile, users can send Bitcoins to others on both Bitcoin ATM types.
Do You Need an ID for Bitcoin ATM?
Generally, no identification is required when you use a Bitcoin ATM. Large deposits or transactions, on the other hand, may necessitate a verification process. This is because most Bitcoin ATM operators are required to obtain licenses from the appropriate government agencies.
For example, Bitcoin ATM machines must be registered with the Financial Crimes Enforcement Network (FinCEN) in the United States. They must also follow the Bank Secrecy Act’s anti-money laundering (AML) provisions (BSA).
Large volume Bitcoin transactions typically require users to provide their mobile numbers to receive verification codes. A copy of a driver’s license or a government-issued ID card may also be required.
Are There Fees for a Bitcoin ATM?
Like traditional ATM operators, Bitcoin ATMs charge service fees for buying Bitcoin or when you sell Bitcoin. This fee is typically a percentage of the total transaction rather than a fixed dollar amount.
How much do Bitcoin ATMs cost? Different ATM operators charge different fees. Coin ATM Radar is a popular Bitcoin tracking website. According to Coin ATM Radar, the average Bitcoin ATM fee is between 10% and 15% of the total transaction amount. The fees could be as low as 7% or as high as 25%.
So, if an investor buys $1,000 worth of BTC at a 15% buy fee, they’ll only get $850 worth of Bitcoin and a $150 charge. At the same time, if they sell $1,000 worth of BTC for a 10% sell fee, they’ll only get $900.
Moreover, the platform lets users easily discover Bitcoin ATM spots, making buying and selling Bitcoins in their areas more convenient. Essentially, it functions as a Bitcoin hub for users.
It is recommended that investors research the various Bitcoin ATM operators in terms of fees before selecting one.
Are Bitcoin ATMs Safe?
Because Bitcoin ATMs are linked to the internet, investors may wonder if they are secure.
Bitcoin ATMs are also relatively safe because no third-party payment processor is used. Funds are transferred directly to the blockchain, an immutable ledger of transactions that cannot be tampered with.
They also function in tandem with cryptocurrency wallets. Investors don’t need to worry about security because passwords and encryption protect their digital wallets. The Bitcoin ATM will only send BTC to the stipulated Bitcoin wallet address if they enter the correct security information.
How to Buy Bitcoin from a Bitcoin ATM
There are several ways to purchase Bitcoin at Bitcoin ATMs. However, the typical workflow is as follows:
Step 1: Choose “Buy Bitcoin”
Visit the BTC ATM and choose the Bitcoin purchasing option. It should be noted that this only applies to ATMs that allow customers to buy and sell.
Step 2: Verify your identity
Identity verification is required for Bitcoin ATMs, depending on the transaction amount. Small deposits may not require any form of identification. However, most of them will request an investor’s mobile phone number, to which they will send a verification code for them to complete their transaction.
KYC and AML rules also say that these ATMs must do something to check who you are. For example, they might need you to scan an ID card issued by the government.
Step 3: Scan your wallet QR code
It is assumed that investors already have a cryptocurrency wallet before using a Bitcoin ATM. For the Bitcoin ATM to know where to send the BTC, the user must scan the wallet’s code.
Step 4: Insert Cash Bills
The next step is to enter the amount to spend on Bitcoin. Simply insert cash into the machine’s receptacle, just like traditional ATMs that accept cash deposits.
The machine will inform the investor how much their fiat currency is worth in Bitcoin, so they know how much BTC to expect in their wallet.
Step 5: Complete the transaction
Simply press the “Confirm” or “Buy” button after verifying the transaction and entering the correct amount of money. The Bitcoin will be delivered to the wallet address.
Please keep in mind that the machine will need a few minutes to process the transaction before reflecting it in the wallet.
Final Thoughts
Bitcoin ATMs have been lauded for their efficiency and user-friendliness. On the surface, they function similarly to traditional ATMs, and because many people are already familiar with how the latter work, acclimating to the former should be easier. These ATMs could play a significant role in increasing cryptocurrency adoption in the future.
However, ATMs are not without flaws. They are currently unevenly distributed, so their adoption will take some time to spread and catch up with cryptocurrencies. Before using an ATM, prospective users should research potential fees.
FAQ
Most frequent questions and answers
Most cryptocurrency ATMs allow investors to purchase digital assets using debit cards. They work just like traditional ATMs, providing an easy way for investors to buy crypto.
Because of their ease of use, Bitcoin ATMs make it simple to purchase cryptocurrency. However, because ATMs have yet to gain widespread acceptance, decentralised or centralised exchanges are an investor’s best bet.
The average amount of Bitcoin that can be purchased at an ATM ranges between $300 and $10,000. If an investor would like to purchase more, the ATM would likely prompt them to contact the operator.
Yes, they do. While most Bitcoin ATMs work using debit cards, some Bitcoin ATMs allow investors to make crypto purchases with cash.
Different ATM manufacturers have their pros and cons. We recommend that investors do their research before choosing an ATM operator.
The QR code scanner on a Bitcoin ATM scans an investor’s wallet’s QR code. This way, the ATM knows where to send the purchased BTC to.
Skrumble.com provides all its content for informational purposes only, and this should not be taken as financial advice to buy, trade, or sell any investment instruments or products, including but not limited to cryptocurrencies, or use any specific exchange. Please do not use this website as investment advice, financial advice, or legal advice, and each individual’s needs may vary from that of the author. Investing in financial instruments, including cryptocurrencies, carries a high risk and is not suitable for all investors. It is possible to lose the entire initial investment, so do not invest what you cannot afford to lose. We strongly advise conducting your own research before making any investment decisions. This post includes affiliate links with our partners who may compensate us.
To view our privacy policy read here.