Bitcoin ATM: a beginner’s guide
November 20, 2019
- What is a Bitcoin ATM
- How Bitcoin ATMs work
- How to use Bitcoin ATM
- Best Bitcoin ATMs
- How To Locate A Bitcoin ATM Near me
- Buy/Sell Bitcoin Using ATMs
- Bitcoin Machine regulations
- Where to Store Bitcoins
What is Bitcoin ATM
Ever wished for Bitcoin exchange to be as easy as using an ATM? Apparently, this is far from fiction: Bitcoin ATMs have been around for more than six years! This article will guide you through the basics of crypto ATMs and provide valuable tips on how to use and locate them efficiently.
Basically, Bitcoin ATM is exactly what it sounds like: a kiosk that allows the purchase of BTC with cash or bank card.
The first-ever Bitcoin ATM called Robocoin appeared in Waves coffee shop in Vancouver, Canada back in October 2013. The first Bitcoin ATM in Europe was installed 2 months later in Bratislava, Slovakia. Just a couple of days ago, the total number of crypto ATMs worldwide surpassed 6000. They are spread across 75 countries, even though over 65% are located in the US, and offer the users an opportunity to instantly buy BTC for cash or debit, 24/7.
How Bitcoin ATMs work
Unlike classic automated teller machines, Bitcoin ATMs connect the user directly to a Bitcoin exchange instead of a bank account. (Not to be confused with Bitcoin-enabled ATMs though! Those are just traditional ATMs that connect to the user’s bank account, allowing for cashless BTC purchase.) Some ATMs are bidirectional, meaning they allow both the purchase and sale of Bitcoins.
A remarkable feature of some Bitcoin ATMs in that the operations are completely anonymous. In the past few years, anti-money laundering (AML) and know-your-customer (KYC) regulations have become quite strict. This means that banks, digital currency processors, peer-to-peer payment platforms – and virtually all other existing payment systems – are required to verify identities of all their users in order to comply with the regulations and avoid fines. Some Bitcoin ATMs, which we are going to discuss in detail further on, are currently not in that league. No KYC/AML is required, meaning they provide a good way of securing your identity and privacy.
However, as the saying goes, there is no such thing as a free lunch. Privacy comes with a price, which in the case of some Bitcoin ATMs is the 7-10% fee for both buying and selling bitcoins. Whether or not it’s worth it is a matter of personal preference and circumstances.
Another great advantage of Bitcoin ATMs is speed: it is one of the fastest ways to buy crypto. As opposed to online cryptocurrency exchanges, which are slow and sometimes tricky in terms of the user interface, with Bitcoin ATMs, it usually takes about a minute to conduct an operation, and all you have to do is follow the instruction from the machine. It is also a great solution for people who do not own a bank account or do not wish to be associated with a certain bank.
How to use Bitcoin ATM
The basic procedure for the purchase of bitcoins using an ATM is as follows:
- First off, you need to locate a Bitcoin ATM near you. A variety of services are available; you can try using CoinATMradar to see how easy and intuitive that is.
- Once the ATM has been located, identity verification may or may not be required, depending on the manufacturer of the machine (discussed further on). A common strategy is a verification by phone number with a one-time password – OTP. Passport or driving license verification can also be also the case in some models.
- Once the verification step, if any, is passed, the machine will normally ask you for a BTC address to deposit the money to. This is where you could conveniently provide an address of your mobile BTC wallet – for example, Atomic Wallet. Alternatively, you could also get your bitcoins by mail. In that case, you would receive a QR code by mail, and that would serve as a paper wallet; you would get a private key once it is scanned. Then you could transfer the bitcoins to your wallet.
- Now that the deposit address has been set, you need to introduce the desired amount of money into the machine. Just like with traditional ATMs, there is a specially designated area that accepts banknotes one by one. A handy feature of some apparatuses is the option to insert the money in bulk, thus saving time on inserting individual banknotes.
- The last step in the procedure is to confirm the amount and, finally, the transaction. After that, your bitcoins are sent to the previously indicated address.
It is worth mentioning that, when selling bitcoins using a two-way ATM, the algorithm is quite similar: enter the amount you want to sell; indicate the bitcoin address to retrieve the sum from; after that cash will be dispensed.
Best Bitcoin ATMs
- Genesis1 Bitcoin ATM
Produced by Genesis Coin Inc., a company based in San Diego, California, USA. This is an example of a Bitcoin ATM producer that actually complies with KYC/AML regulations: the machine supports fingerprint scanner, SMS verification, identification card reader and a high-resolution camera. This is two-way ATM, meaning both the purchase and sale of crypto is possible. An interesting feature of these is that they support three cryptocurrencies: Bitcoin, Litecoin and Dogecoin. The fee for software usage is just 1% of the transaction volume.
- Satoshi1 Bitcoin ATM
This is a smaller version of the Genesis1 model with a larger screen. It is a one-way machine that only supports Bitcoin purchase. The model is compliant with KYC/AML.
- Satoshi2 Bitcoin ATM
Overall similar to Satoshi1, but supports two-way bitcoin transactions: selling BTC for cash is possible. KYC/AML compliance.
- Lamassu Bitcoin ATM
Lamassu is the third-largest Bitcoin ATM manufacturer with headquarters in Luzern, Switzerland (total number of ATMs installed is 501). This producer offers a completely decentralized model, utilizes open-source software and renders the operator fully in charge of the machine. Their machines possess a recognizable design and offer both one-way and two-way Bitcoin exchange.
- BATM2 Bitcoin ATM
Produced by GeneralBytes, a Czech company that currently dominates the Bitcoin ATM market with more than 1900 machines installed around the world. The machine is based on Android technology and supports one-way operations, remote management and requires user identification.
- BATM3 Bitcoin ATM
Much like BATM2, but supports two-way operations and point of sale terminal (POS) functionality.
- BitXatm Bitcoin machine
Manufactured by a German company Global Funds Transfer (GFT) GmbH, this machine works both as a two-way Bitcoin ATM and a point of sale terminal (POS). The crypto can be either transferred to an existing wallet address, or to a QR voucher that you can use after registration on Bitxatm portal.
- Robocoin kiosk
Remember the first-ever Bitcoin ATM that was installed in Vancouver? It was Robocoin. Even though they are not produced any more since 2015, some of them can still be found locally, but those are powered by General Bytes software. They are also equipped with all the necessary AML/KYC safety features.
How To Locate A Bitcoin ATM Near me
Coin ATM Radar is a simple and easy-to-use service that provides a constantly updated global Bitcoin ATMs map. Wherever in the world you are, there is a good chance to locate a Bitcoin ATM nearby!
Apart from providing the global map and locating the machines near you, the service also provides a complete set of details about the localized machines and generates directions from your current location to the whereabouts of the ATM.
In order to try it out:
- Go to the main website of the service. There you will see an up-to-date map of all Bitcoin ATMs.
- Next up, you need to indicate your city or location and press Enter to start the search.
- Once the ATMs have been localized, you can click on any to see the details.
- If you are satisfied with the location, click on “Get directions” and head right off!
Buy/Sell Bitcoin Using ATMs
The process of buying/selling crypto can vary slightly depending on the ATM, so here is a quick guide for the most popular models out there.
Genesis1 Bitcoin ATM
- Click “Buy Bitcoin”
- Choose your coin (e.g. Bitcoin)
- Click “Scan QR”
- Scan QR of your wallet
- Insert the necessary amount of cash
- Press “Finish”
- Take paper receipt
- Click “Withdraw cash”
- Choose your coin.
- Specify the amount you want to withdraw.
- Using the QR code from your mobile wallet, send the Bitcoins to a provided address.
- Pick up the cash.
Lamassu Bitcoin ATM
- Scan your BTC address.
- Insert the cash.
- Click “Send BTC”
BitAccess Bitcoin ATM
- Click “Start”
- Enter your mobile and click “Proceed”
- Enter the code from the SMS you have received
- Scan QR of your wallet
- Insert the cash
Bitcoin Machine regulations
9 years since Bitcoin’s inception, the regulations concerning its use are still quite vague and region-dependent. In the US, bitcoin ATMs are regulated on federal and state levels, aiming to prevent money laundering and other financial crimes. Describing regulatory aspects is worth another article, but they are important mostly to provisional Bitcoin ATM operators who want to incorporate them into their business.
Where to Store Bitcoins
Right; you have successfully purchased bitcoins using a Bitcoin ATM. A good follow-up idea is to ensure the safety of your assets by choosing a secure cryptocurrency wallet. Atomic Wallet allows you to secure, manage and exchange more than 300 cryptocurrencies in the most intuitive and user-friendly way; it is available for all major operating systems, as well as iOS and Android. Some of its best features are exceptional security, instant exchange, complete decentralization and anonymity, 24/7 live support and smooth, handy interface. Check it out!
Overall, using Bitcoin ATMs is a quick way to buy or sell crypto, provided there is one nearby. If anonymity is important, it is always worth checking whether the machine near you complies with AML/KYC regulations. As the number of ATMs worldwide is growing steadily, it is sure going to be interesting to track its progress in complying with government regulations while keeping true to the principles of privacy and decentralization. Stay tuned!