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What Are Bitcoin ATMs and How Do They Work?
Shailee Adinolfi
&
Annie Pei
General Wallet Use
Crypto automated teller machines (ATMs) provide a simple way to buy and sell cryptocurrency using cash. These machines offer access to Bitcoin and, in some cases, other cryptocurrencies without requiring an online exchange. While some crypto ATMs require identity verification, many allow small transactions without it, making them accessible to new and experienced users.
What Is a Bitcoin ATM?
A Bitcoin ATM is a physical kiosk that lets users buy or sell Bitcoin using cash or a debit card. Unlike traditional ATMs connected to banks, Bitcoin ATMs interact with blockchain networks to facilitate crypto transactions.
Bitcoin ATMs generally come in two types:
Buy-Only Machines: These let users purchase Bitcoin by inserting cash or using a debit card.
Two-Way Machines: These support buying and selling Bitcoin, making them more versatile for users who want to cash out their cryptocurrency.
To send or receive crypto with a Bitcoin ATM, you’ll need a digital wallet like Leather and, in most cases, identification. Some machines allow small transactions without requiring ID, but this depends on local regulations.
Benefits and Risks of Bitcoin ATMs
Here’s a quick breakdown of the benefits and risks of using Bitcoin ATMs:
Bitcoin ATM Benefits
Accessibility: Bitcoin ATMs are typically in public places like gas stations, malls, and convenience stores.
Quick Transactions: Unlike exchanges that may take days to process, Bitcoin ATM transactions typically finish in minutes.
Privacy: Some Bitcoin ATMs allow small transactions without identity verification. This can provide a level of anonymity.
Bitcoin ATM Risks
High Fees: Bitcoin ATMs often charge between 5% and 15% in fees, which is substantially higher than most online platforms.
Limited Availability: While growing in number, Bitcoin ATMs are still less common than traditional ATMs and are concentrated in urban areas.
Fraud Potential: Users must verify the reputation of the ATM operator to avoid scams or unreliable machines.
How Does a Bitcoin ATM Work?
Bitcoin ATMs connect to a cryptocurrency exchange or operator’s network to facilitate transactions. Here’s a quick overview of the typical transaction process:
Select Transaction Type: Choose to purchase or sell Bitcoin.
Scan Your Wallet Address: Use a digital wallet (like Leather) and scan the ATM’s QR code. If you don’t have a wallet, you’ll need to set one up before using the machine.
Insert Cash or Send Bitcoin: Deposit cash if buying Bitcoin, or transfer Bitcoin from your wallet if you’re selling.
Confirm Details: Double-check the transaction amount and wallet address before proceeding.
Complete the Transaction: If you buy, the machine sends Bitcoin to your wallet. If you sell, the machine dispenses cash.
Transactions are processed through the blockchain, which can take a few minutes to confirm.
Bitcoin ATM Fees
Bitcoin ATMs charge fees for transactions that are generally higher than those charged on online platforms. Fees typically fall into two categories:
Transaction Fees: Depending on the operator, these range from 5% to 15% of the transaction value.
Network Fees: These are blockchain fees required to process transactions. They vary based on the current network activity.
Most machines display the fee structure before you confirm the transaction, so it’s important to review this carefully.
Where to Find a Crypto ATM
Bitcoin ATMs are found in many locations, including gas stations, grocery stores, and shopping centers. Websites like CoinATMRadar allow you to search for machines near you. These sites also show details like fees, supported cryptocurrencies, and whether the ATM supports buying, selling, or both.
Bitcoin ATMs are most commonly found in high-traffic areas, including shopping centers, gas stations, and airports. Availability will depend on your region, so check online beforehand to save time.
Top Crypto ATM Operators
Leading Bitcoin ATM operators:
CoinFlip: Known for its user-friendly machines, competitive fees, and thousands of locations across the US.
Bitcoin Depot: Offers a broad network of ATMs supporting multiple cryptocurrencies.
Coinsource: Offers compliance-focused services with transparent fees.
Bitstop: Features high-quality machines available in convenient locations nationwide.
How to Use a Bitcoin ATM
Using a Bitcoin ATM is straightforward, but you'll need a digital wallet to complete the transaction. Generally, you want to follow these steps:
Set up a digital wallet: Download a wallet (like Leather) to store your Bitcoin securely.
Locate a Bitcoin ATM: Use CoinATMRadar or a similar service to find a nearby machine.
Select your transaction: Select “Buy Bitcoin” or “Sell Bitcoin” on the machine’s screen.
Scan your wallet QR code: Use your wallet app to scan the ATM’s QR code.
Insert cash or transfer bitcoin: Add cash to buy Bitcoin, or send Bitcoin to the ATM to receive cash.
Confirm and finish: Verify the transaction details before completing it.
The machine will send Bitcoin to your wallet or dispense cash based on the transaction type.