Whether you're looking to invest in cryptocurrencies as a store of value or use them to make payments, bitcoin ATMs are an easy way to get your hands on digital currency. Buying bitcoin online could sometimes involve complicated processes such as repeatedly failed identity verification; however, bitcoin ATMs allow you to buy bitcoins easily with your credit or debit card, without additional processes
They're quick, easy, and just about everywhere if you know where to look. Here's what you need to know about how they work and how to use them.
What Are Bitcoin ATMs?
A Bitcoin ATM is a system or an internet-connected kiosk that allows users to conduct financial transactions. Traditional ATMs enable customers to withdraw and deposit cash, while Bitcoin ATMs allow users to purchase and sell Bitcoin and other cryptocurrencies using fiat money.
A typical Bitcoin ATM consists of a display, a QR scanner, a money acceptor, and a dispenser. The software connects these elements in the background to make purchasing and trading Bitcoin quick, easy, and secure.
On the other hand, Bitcoin ATMs are not connected to a bank account like regular ATMs. Instead, they link directly to a bitcoin exchange through the internet. These exchanges enable people to buy and sell Bitcoin in real-time.
How Do Bitcoin ATMs Work?
Unlike online crypto exchanges, Bitcoin ATMs make it easy to purchase and sell Bitcoin. However, in most cases, Bitcoin ATMs need customers to have an existing account to use the machine.
Bitcoin ATMs, or BTMs, are classified into two types:
- Unidirectional Machines: One-way transactional machines that allow for purchasing OR selling cryptocurrencies, but NOT both.
- Bi-directional Machines: Two-way machines that allow for the purchasing AND selling of cryptocurrencies.
To facilitate the exchange of bitcoin for cash, BTMs must be linked to the internet. BTMs generally transfer funds using a public key on the blockchain; however, some still issue paper receipts.
As a result, Bitcoin ATMs sometimes need authentication, especially when processing large sums of money. In addition, customers must pay a service fee to use a bitcoin ATM. This fee is usually levied as a percentage of the transaction value rather than a fixed monetary amount.
How To Use Bitcoin ATMs
The procedure of identification verification is the initial step in utilizing Bitcoin ATMs. Therefore, before you purchase, you are normally requested for your cellphone number to obtain a verification code. Of course, since Bitcoin ATM services are powered by Centralized Exchanges (CEXs), they are required to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.
All BTMs must have some form of identification confirmation; hence, if you have a problem scanning your government-issued ID, you would be required to submit a cell number registered in your name, as the law requires. After submitting your phone number, you will be required to authenticate your transactions via a one-time password (OTP) or some other passcode that the BTM will send to your phone as a text.
Buying BTC on A Bitcoin ATM
Ideally, you should have a bitcoin address before you can use a Bitcoin ATM to buy or sell Bitcoin. When buying, you would need an address to receive the purchased BTC. The BTM will initially prompt you to input the amount of money you wish to swap for Bitcoin. Next, you enter your cash deposit into the machine's appropriate container, the machine will then calculate its value in Bitcoin, and you'll receive it at the address you have provided to the Bitcoin ATM.
You must now hit BUY or CONFIRM after double-checking that you entered the proper amount of money and are pleased with the transaction. The Bitcoin you just purchased will be delivered to the address you confirmed previously with your QR code.
Selling BTC on A Bitcoin ATM
Similarly, when you want to sell, you will be required to put in the amount you intend to sell, and the BTM will provide you with a unique QR code to scan; after the transaction is complete, you will get cash.
The Steps are summarized below:
- First, choose your preferred choice, whether you are buying or selling (in this case, you intend to sell your coins, so click "Sell BTC"). Scan the QR code located on the back of your wallet. You could scan it with your mobile app, print it, or input the address manually.
- Then, click on your identification. Although it varies by nation, most BTMs require users to input a phone number, scan a valid ID, or snap a picture. Some machines can even read fingerprints. Verification is essential for transactions involving large amounts of Bitcoin.
- Transfer the bitcoin to the provided address. This is commonly accomplished by scanning a QR code. Some machines immediately issue cash, while others require you to wait for the recipient to authenticate the transaction. Confirm the transaction and wait for the results.
The Key Benefits of Using Bitcoin ATMs
Some of the advantages of using a Bitcoin teller machine are as follows.
- It's a quick and simple way to buy and sell Bitcoin.
- There is no need for physical cards or bank cards to transact.
- Individuals who do not possess or prefer not to maintain bank accounts can use Bitcoin.
- It makes Bitcoin available in locations with few options for purchasing cryptocurrencies.