Beginners Guide to Bitcoin ATMs

. 8 min read

One of the most basic but at the same time common questions asked when starting out in the world of cryptocurrencies is: "Can I sell my bitcoins somewhere without the need for an intermediary?", "How can I convert my cryptocurrency into cash without going through the long process of finding a buyer?”,“Is there a faster and more anonymous way to sell digital assets without having to register on a platform that stores my data?”. The short answer to all those questions would be a great: Yes! and that's where Bitcoin ATMs offer a possible solution, but one that is not always without certain conditions, and maybe not the right solution.

What Is a Bitcoin ATM?

A bitcoin ATM, like traditional ATMs that usually belong to large banking chains worldwide, are automated machines that allow bitcoin to be “withdrawn” from them in local fiat currency based on the geographic location in which they are located. Some of them only dispense cash in exchange for the bitcoins in each user's wallet, while others, on the other hand, act as providers, even allowing them to buy bitcoins with a simple deposit of cash in their slots.

However, the reality of these ATMs is not that they magically “convert” bitcoins (or any other cryptocurrency) into cash as if it were conventional money, but actually what they do is buy the bitcoin stored directly in the wallet of the person interested in withdrawing. All this, thanks to certain purchase standards that are part of its pre-programmed functions at the time of being installed, such as the purchase price depending on the rate set on the Internet in real time, or the commissions charged per transaction, which are adjusted according to the manufacturing company.

what is a bitcoin ATM?

A Brief History of Bitcoin ATMs

The first Bitcoin ATM started operating in October 2013, with a Robocoin brand machine that was installed in a local coffee shop in Vancouver, Canada. This became the first functional and available Bitcoin ATM open to the public worldwide and was operating a bitcoin ATM there until 2016. In 2013, the first Bitcoin ATM in Europe was installed in the city of Bratislava, in Slovakia. While, in turn, the first Bitcoin ATM to set foot in the United States was in Albuquerque, New Mexico, in 2014. While some places like the United States and Australia were growing in cryptocurrency ATM use, increasing regulations has put a hamper on the usability and viability of these machines in many places.

How Does a Bitcoin ATM Work?

This form of “bitcoin machine” currently allows interested in buying and selling bitcoin to do so as if they were a real-time trading platform using cash. So they can be understood more as a "money exchange" connected to the Internet than as an ATM in a literal sense. However, these ATMs offer options similar to traditional ATMs, such as generating printed receipts for buying and selling, or generating digital receipts that the user can store virtually.

  • Buying Bitcoin: Although each model of Bitcoin ATM is different, the process to buy from them is basically similar:
  1. Once you are in front of these, search and select the option: “Buy Bitcoin”.
  2. Next, you will need to scan the QR code of your Bitcoin wallet address with the ATM scanner. This is usually done from the ATM to the screen of your phone.
  3. According to the regulations of the Bitcoin ATM and the jurisdictions of the country where it is located, sometimes you will need to provide some type of legal documentation in order to complete the transaction. Such as a passport or a driver's license.
  4. Enter the amount you want to buy (in fiat currency or the exact amount in BTC).
  5. The ATM will then ask you to insert the cash into one of the corresponding slots.
  6. The machine will then take a few minutes to process the transaction.
  7. And it’s done, just like if it were your bank account! Check the balance of your Bitcoin wallet to confirm that everything went correctly. There you can request that the ATM generate a physical printed receipt or a digital version that can be stored on a cloud or your email address.
  • Selling Bitcoin: The process of to sell bitcoins using one of these ATMs is much more diverse depending on the model, but the process is still as intuitive and simple:
  1. Once you are in front of these, search and select the option: "Sell Bitcoin".
  2. Next, you will need to scan the QR code of your Bitcoin wallet address with the ATM scanner. This is usually done from the ATM to the screen of your cell phone.
  3. According to the regulations of the Bitcoin ATM and the jurisdictions of the country where it is located, sometimes you will need to provide some type of legal documentation in order to complete the transaction. Such as a passport or a driver's license.
  4. Enter the amount you want to sell (in fiat currency or the exact amount in BTC).
  5. There, sometimes in parallel, the ATM will show you in real time the rate will pay you for the bitcoin fractions you want to sell. And even, it will calculate in advance the commission margin that it will be charged for the transaction and that will be reflected in the final amount.
  6. If you agree with the amount offered, you must accept and the machine will take a few minutes to process the transaction.
  7. And again it will be finished! Withdraw the cash that the ATM will give you and check the balance of your Bitcoin wallet to confirm that everything went correctly. There you can request that the ATM generate a physical printed receipt or a digital version that can be stored on a cloud or your email address.

Is It Safe to Use a Bitcoin ATM?

A great advantage of Bitcoin ATMs is that a large majority of them allow you to buy or sell bitcoins transparently, anonymously and securely. Although we’ve mentioned before that some of them can request some type of legal document when completing the transaction due to certain regulations or legislation in the country where they are installed.

But answering the specific question, the main mechanism that guarantees the security of these machines are the Two-factor Authentication (2FA) processes. Those that are implicit in certain actions that we carry out on a daily basis (such as logging into our email or social media profiles, or even using the traditional ATMs of our banking entities). In Bitcoin ATMs this requirement works in the same way, sometimes asking the user to simply provide their phone number to send a code that they must enter to confirm a transaction. Others simply by scanning a QR code that will be sent to their phones.

Do Bitcoin Atms Charge Any Fee?

This is usually the trickiest issue when using Bitcoin ATMs, not only because of the fact that the range of fees can vary from an ATM to another, but the amount can be quite significant. Since the average is 8.9% for any bitcoin "withdrawal" (sale); but many ATMs can go much further and even charge well over 12%. Usually this is the principal reason why most experienced Bitcoin users avoid the use of Bitcoin ATMs altogether. Since, unless there is some sort of emergency it generally makes sense to buy and sell BTC elsewhere as the final amount of cash or BTC will be considerably reduced by the high commissions charged by these bitcoin machines.

For all these reasons, it’s that we advise (especially to new traders) that if they want to buy or sell their first bitcoin portions, they should go to a decentralized P2P exchange that offers enough options that guarantee them greater accessibility to trade and that charge low commission rates so they will not lose profitability. LocalCoinSwap is one of those decentralized P2P platforms where you can find buyers and sellers close to you. Where you can search for options to buy and sell cryptocurrency using more than 250 different payment methods and see if there are offers available that suit your needs. And the best part, LocalCoinSwap only charges 1% commission for every successful transaction! So the final amount you receive will not be seen but only slightly affected by the fees. So what are you waiting for? Go to LocalCoinSwap and create an account today.

bitcoin ATM fees

How Can I Find the Closest Bitcoin ATM?

The fastest way to find out where you could find a nearby Bitcoin ATM to get cash in bitcoin is using a search tool for Bitcoin ATMs, these can be found on the Internet. The most popular is Coin ATM Radar, which allows you to find the closest Bitcoin ATMs through a map search similar to the searches carried out on Google Maps, but where only the places where there’s any installed unit of Bitcoin ATM will be marked. Additionally, said website will allow you to know other relevant information about each ATM that will save you time and transport, such as the brand, how much fee percentage they charge, the purchase or sale limits of each one, and if they can only buy, or buy and sell at the same time.

bitcoin ATM map and locations

How Many Types of Atms for Bitcoin Are There and How Can I Get One?

Currently, the three best-known brands on the market are General Bytes, from the Czech namesake company; the Genesis Coin, from the United States market; and the Swiss-made Lamassu. Each of these, in turn, has sub-models whose prices vary in a wide range depending on the number of functions they perform, the type of cryptocurrency they work with, the import time they take and the mode of manufacture itself. Thus, for example, the General Bytes, being the most commercial, have models such as the BATMTWO and the BATMTHREE, which range from $ 3,000 to $ 7,500. The Genesis Coin, which offers the Genesis1, the Satoshi1 and the Finney3 models, ranging from $ 4,500 to $ 15,000, due to their high technology and great versatility. And finally, the Lamassu, who make a diverse family that includes models such as the Gaia, the Sintra and the Douro II.

To install an ATM of bitcoin, either because you are the owner of a shopping mall and want to offer a new liquidity alternative to your visitors, or because you own a very busy small business in a community where you know that the business with cryptocurrencies is very dynamic; you should only contact the customer support of these large companies and formalize the request indicating the region where you live and the type of model you need.

Conclusions

Bitcoin ATMs have been practical machines that have made life easier for many people that want to convert their digital funds into cash quickly, comfortably and safely. And that at the same time, they demonstrate that although the Bitcoin and cryptocurrency business have made a qualitative leap that merges with traditional economic procedures as we know them, they still have enough practicality to imitate conventional financial mechanisms (such as development of various ATM bitcoin and otherwise). And thus guarantee greater commercial accessibility to all of those individuals who want to start in this environment with a reasonable investment in cash.

In this way, some are the advantages and opportunities offered by the convenience of bitcoin atms, but in the same way, they have their disadvantages and risks that make them devices that are not suitable for most people wanting to get involved in crypto. But that's what LocalCoinSwap is for! Since we are a P2P cryptocurrency marketplace that offers a wide variety of payment methods, mechanisms to trade securely, availability in more than 100 countries and also, very low commissions that allow you to create large or small offers without limits! In other words, all the right reasons for you to start trading today!


Skip the Bitcoin ATM and get started trading P2P on LocalCoinSwap. You can also join our Telegram community or follow us on Twitter & Facebook. To find more articles like this one, check out the rest of our Blog.



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