It is common to associate the ATMs with traditional banking. But in the last few years, there are more and more Bitcoin ATMs (BTMs) mushrooming in the shops and public locations all around the globe.
In this article, we will explain how Bitcoin ATMs work, what types exist, and how to find the closest one.
A video version of this read from an Exscudo team member who opened his own BTM company back in 2014. In this video, Trevor sums up the article and explains the hidden fees and common scams of the BTM industry.
The Bitcoin ATM industry has been around for more than 7 years. But it really started growing in 2020, when it soared a whopping 167%. It all started in October 2013, when the first-ever BTM company installed a machine in the Waves coffee shop in downtown Vancouver, Canada.
Two months later, the first EU BTM appeared in Bratislava, Slovakia. Since then Bitcoin ATMs started to spread across Europe. In took a couple more months for the first machine to appear in the USA — it was placed in a cigar bar in Albuquerque, New Mexico. Although this machine was removed in just a month for unknown reasons.
At the moment of writing, there are over 10,000 Bitcoin ATMs in more than 70 countries all around the world. Even though the most popular locations are USA (7 567 ATMs) and Canada (900 ATMs), BTMs are also popular in countries with weak economies, like Venezuela and Columbia. There, BTC is a way to escape the hyperinflation.
There are two types of Bitcoin ATMs:
Unidirectional: One-way BTMs which allow users to either buy or sell Bitcoin for fiat.
Bidirectional: Two-way BTMs that can buy and sell Bitcoins. Those are particularly rare – only 30% of the total BTMs are bidirectional.
Advanced BTM providers allow users to sell Bitcoins remotely and then get the cash from the closest machine. Other progressive machines let you withdraw cash using a BTC debit card – especially useful if you’re traveling in a foreign country.
What’s more, using BTC as a payment method on a day-to-day basis can be tricky in most parts of the world. Users have to log into an exchange, sell BTC, and withdraw cash to a bank account. Only then they they can spend the money. BTMs eliminate those steps. Essentially, a BTM machine is a physical bitcoin exchange. It brings slick user experience and simplifies otherwise complex crypto.
The price of Bitcoin in the BTM equals the current exchange rates, but the machine applies additional fees. They usually stand between 8-10%, but some operators may charge you up to 15%. This is much higher than the regular exchange fee, where the users also have the option to choose the fee amount.
Buying Bitcoin with the BTM is pretty straightforward – you scan the QR code of your wallet address using the integrated scanner, then enter the amount you want to buy and insert the cash. Voila!
Selling Bitcoin with the BTM is a bit more complicated process. It depends on what type of machine you’re using, so make sure to do the research first.
Luckily, BTM operators try their best to make the interface intuitive. Just follow the instructions on the screen and you should be fine.
Coin ATM Radar is a useful tool that will help you find the Bitcoin ATM next to you. The website gives the location of the closest machine and other useful information, such as fees, instructions, and the type of BTM you are about to use. The search is not limited to only Bitcoin ATMs and includes the machines made for operations with Ethereum, Ripple, Monero, and even Dogecoin.
Don’t forget your ID, as very few machines allow you to buy Bitcoins without it. Most require the phone number to send a verification code. Others require ID details for access, but this generally happens when you withdraw large amounts.
Depending on the anti-money laundering laws in your country and BTM type, you may have to disclose your personal information to varying degrees. This is to meet compliance requirements and to keep your Bitcoins secure.
Bitcoin ATMs are a very useful tool for cryptocurrency users all around the globe. They work as a physical exchange of Bitcoin and make it easier to use BTC for payments on a daily basis.
BTMs also do a lot of advertisement for Bitcoin. There are many people who heard about the currency but think that “Bitcoin does not exist since it is only on the internet”. With Bitcoin ATMs mushrooming in the shops next to the regular ATMs, people see the physical representation of Bitcoin and become less suspicious of the technology. With such an advertisement and the overall growth of the crypto industry, there is no doubt that the number of BTMs in the world will continue to increase every year.