What Is a Bitcoin ATM? Everything You Should Know
For better or for worse, bitcoin hits the headlines weekly. In November 2021, the headlines were great for crypto investors. Bitcoin reached an all-time high of $68,000.
But in May 2022, the market is down, with prices dipping below $30,000 for the first time in a year.
This isn’t the first time Bitcoin has fallen this far. And it won’t be the last. It’s the nature of crypto. Volatility is everywhere.
The good news is that bitcoin is currently on sale, and you can pick some up at a bitcoin ATM. What is a bitcoin ATM, and why should you use one over other forms of crypto purchasing?
Keep reading below to learn everything you need to know about using a cryptocurrency ATM today.
Ways of Purchasing Crypto
There are many ways you can buy and sell cryptocurrency. The most common is using an online crypto exchange.
There are many platforms, like CoinBase or Binance that support US-based users. If you have a brokerage account where you purchase stocks or shares of a mutual fund, using a crypto exchange is very similar.
To buy cryptocurrency using an online exchange, you need to create an account, which requires identity verification (nearly all types of crypto purchasing require this).
Then, you need to either connect your bank account to add funds to your crypto account. Or you can purchase using a debit card, which requires significant fees.
Alternatively, you can send a wire transfer for a slow transfer with a flat fee, which may be ideal for larger purchases.
Many current money-based apps and tools now offer crypto purchasing. Paypal, Cash App, E-Toro, and several other apps you likely already use support crypto purchasing.
However, most of these non-native crypto tools don’t allow you to self-custody your crypto. That means you can’t transfer it to your crypto wallet. Technically, you don’t own it at all.
So these tools aren’t ideal for those looking to invest in crypto or use it for purchases.
But one of the easiest ways to buy crypto is with a bitcoin ATM, which is the only way to get crypto for cash.
What Is a Bitcoin ATM?
Bitcoin ATMs are virtually the same as bank ATMs. You can insert cash or withdraw cash at any time.
But rather than depositing and withdrawing USD from a bank account, you are converting cash to crypto, or vice versa. There are no bank accounts involved.
These physical machines are located all over the US, as well as in many other parts of the world. You can find a bitcoin ATM near me by looking at bytefederal.com.
They have an extensive US-based network of trusted ATMs that allow you to purchase bitcoin as well as a handful of other popular cryptocurrencies.
How Do Bitcoin ATMs Work?
So how do bitcoin ATMs work? They work in conjunction with a crypto wallet. Crypto wallets are software applications that you can download to your smartphone.
Each wallet will have an address, which is a long string of characters unique to you. When you buy crypto from an ATM, you provide your wallet address, and it sends your crypto directly to you.
Once the transaction is confirmed on the blockchain (which takes a few minutes), you’ll see your crypto in your wallet.
If you’re buying bitcoin using ATM, you’ll select how much you wish to purchase. You’ll scan a QR code provided by your crypto wallet (so you don’t have to type out the long wallet address).
You then insert cash. The ATM then converts that cash into bitcoin or your chosen cryptocurrency at the current market rate.
The market rate fluctuates by the second, so your quoted price may be slightly different than the price you purchase at.
You pay a fee for the convenience of using the ATM, and the transaction waits to be confirmed on the blockchain.
At this time, you can walk away, as your work with the ATM is done. Within the next few minutes (or upwards of an hour, depending on the level of network activity), your transaction will finish.
Benefits of Bitcoin ATMs
So why would you want to use a bitcoin ATM over other types of crypto purchasing? Here are just a few good reasons:
No Bank Needed
The beauty of cryptocurrency is that it’s decentralized. It’s not controlled, managed, manipulated, or authorized by the banking system like the US dollar is.
However, buying crypto online requires the use of your bank account. You need to transfer funds from your bank to your crypto exchange of choice. And most banks don’t like crypto and have the freedom to block those transactions from taking place.
When using a crypto ATM, you can go straight from dirty dollars to valuable cryptocurrency without needing to use a bank at all.
Cash When You Need It
Most people still need to access physical cash from time to time. If you don’t use a bitcoin ATM, you’ll need to perform many steps to convert crypto to cash.
You’ll first need to sell your crypto. Then you need to withdraw that crypto to your bank account. There might be a holding period that makes you wait for one to two weeks before you can perform a withdrawal.
Then, the withdrawal process usually takes another week to hit your bank account.
Then you can finally visit a bank ATM or perform a cash withdrawal.
But with a bitcoin ATM, it’s all completed in one step. Visit a bitcoin ATM, choose how much you want to withdraw, scan your wallet address, and boom, you’ve got the cash.
Convert Cash Wages to Crypto
Many people receive some or all of their income in cash. This includes many working in the service industry or those who accept tips in one way or another.
Getting paid in cash is great in many ways. But the big problem is that inflation is so high that your green money is losing value by the hour.
With a bitcoin ATM, you can convert your cash into an asset with huge potential to increase in value. And you can do it daily, weekly, or whenever you feel like it.
To use a bank ATM that is within your network, you’ll need to visit a bank branch. These aren’t always in convenient locations.
Crypto ATMs, on the other hand, are always located in places you already frequent. Gas stations, grocery stores, and convenience stores are places you need to visit every week anyways.
So you can manage your crypto portfolio while completing your usual errands.
Everyone Can Access Crypto
Even in 2022, not everyone has a bank account. Not everyone has a computer. And not everyone has a reliable internet connection at home.
But everyone should have access to bitcoin and the wider cryptocurrency network. If we believe this is the money of the future, then every single person needs access to it.
Almost everyone has a smartphone these days. And that’s all you need to use a crypto ATM. Bitcoin ATMs help to create a fair opportunity to access crypto.
How to Use a Bitcoin ATM
So how can you use a bitcoin ATM if you’re ready to purchase crypto today? Here are the simple steps you can expect to take:
Set Up a Crypto Wallet
If you’re new to cryptocurrency, you’ll first need to set up a crypto wallet. Even if you have invested in cryptocurrency already, you’ll want to download and install a mobile crypto wallet on your smartphone.
You can use any wallet available to you. If you’re downloading one for the first time, you might as well download the wallet offered by the ATM network you plan to use.
Setting up the wallet only takes a minute. You’ll receive a seed phrase, which is essentially the super-secure password for the wallet.
Write this phrase down on physical paper and store it somewhere that you won’t lose it. Don’t store it on your phone or computer. And never share it with anyone. That’s the number one rule of crypto.
Find Your Local ATM
Once you have a crypto wallet on your smartphone, you can find your nearest ATM. Multiple ATM providers have extensive networks across the US.
You’ll find them in nearly every town on the map. They are usually located at convenience stores, gas stations, liquor stores, grocery stores, and shopping centers.
Create an Account
When you visit a crypto ATM for the first time, you’ll want to create an account. That way, each subsequent visit will be fast and easy.
Creating an account requires identity verification. Make sure to have your government ID with you. You will likely need to provide your social security number as well.
The benefit of performing this at an ATM is that approval is often granted in seconds. When it comes to online exchanges, it can take hours, if not days for your account to be approved.
You will also provide your phone number. Then, each time you visit an ATM in the future, you simply type in your phone number to access your account. You’ll receive a 2FA code on your phone for security purposes.
Complete Your Transaction
Now you can complete your transaction. You can do this by selecting the cryptocurrency you want to purchase.
Most crypto ATMs offer bitcoin, Ethereum, LiteCoin, Bitcoin Cash, and a few others. Once selected, you can choose how much you plan to purchase.
On your smartphone wallet, you’ll choose the “Deposit” option. Choose to display a QR code. Then scan that QR code at the ATM to tell the ATM where to send your funds.
Insert the appropriate amount of cash. Verify the fees associated with the transaction and the current exchange rate. Then, confirm the transaction.
The transaction will be completed at the ATM and you can walk away. However, you won’t see the funds in your wallet until the transaction is confirmed on the blockchain.
On busy networks, such as bitcoin or Ethereum, this can take anywhere from five to 30 minutes, depending on the time. More people using the network means longer transaction times.
Selling Crypto With an ATM
The process of selling crypto at an ATM and withdrawing cash is virtually the same as purchasing, with one key difference.
You’ll still input your phone number to start the transaction. Then you’ll choose the “Sell” or “Withdraw” option. Choose the cryptocurrency you plan to sell and how much.
Scan the QR code provided by the ATM, which tells your mobile crypto wallet to send funds to the ATM.
When the transaction completes, you’ll receive a receipt. It won’t give you the cash until the transaction is confirmed on the blockchain. Again, this can take as little as a minute or two, or upwards of 30 minutes.
Once you have the receipt, you are safe to walk away from the ATM until the transaction is complete. You’ll receive a notification on your phone when your cash is ready.
Just head back to the ATM, insert your receipt, and receive your cash.
Because of the slight delays, it’s best to withdraw crypto at a grocery store, or somewhere that you plan to spend some time anyway unless you don’t mind waiting for the transaction to finish.
Not All Crypto ATMs Are the Same
There are many different providers of crypto ATMs. And each one will be a little bit different.
For example, most crypto ATMs only allow for cash purchases. But a few providers will allow you to buy using a debit or credit card.
Some will offer only the top five cryptocurrencies, while others offer more than a dozen different cryptocurrencies.
Some ATMs will even allow you to buy gold, gift cards, and other forms of investments or currency. If you need a specific function from an ATM, then make sure to research all the different providers in your area to find the right one for you.
Bitcoin for Everyone
So what is a bitcoin ATM? It’s a physical ATM that allows you to deposit or withdraw cash at any time, just like traditional ATMs.
But rather than linking it to your bank account, a bitcoin ATM allows you to buy and sell bitcoin and other cryptocurrencies for cash. They are ultra-convenient and are helping to expose the wider consumer base to the world of cryptocurrency.
Looking for other crypto tips and tricks? Head over to our blog now for more informative content.