As you travel to various destinations throughout your week, such as your local gas station, have you been noticing Bitcoin ATMs appearing? There is a very large trend happening not only in your neighborhood but around the world as well.
Recent statistics suggest that there are now over 39,000 cryptocurrency ATMs. This is a dramatic increase since September 1, 2020, when there were under 10,000 ATMs globally.
A Bitcoin ATM is a convenient way for crypto investors to convert their Bitcoin to cash. The tricky part is that while it has the acronym “ATM,” it does not work like a traditional automated teller machine that you have from your traditional bank. Therefore, there is a bit of a learning curve for a new Bitcoin investor.
Don’t worry; everything you need to know is right here, and we broke it down with simple instructions. Here is how to work a Bitcoin ATM.
What Can You Do at a Bitcoin ATM?
Firsts, you can use cash to purchase Bitcoin. Then, you can send the Bitcoin to a wallet. Many Bitcoin ATMs will let you sell Bitcoin too, and get cash.
You could even insert cash and send the funds to another person’s account or the Bitcoin wallet. All you need for the transaction is a smartphone.
Do This Before Going to the Bitcoin ATM
You will need a digital wallet. Just like your physical wallet in your pocket carries your cash and credit cards, a Bitcoin wallet stores Bitcoin. Crypto is digital money, and it must land somewhere.
A Bitcoin wallet is essentially your “storage” place.
Although Bitcoin lives in the blockchain or online ledger. It never leaves it. So, while a Bitcoin wallet does not have Bitcoin exactly, it contains your Bitcoin balance or how much you own.
Various Forms of Digital Wallets
This is how you track your crypto, like how a physical wallet can help you track physical currency. There are a few options for the type of Bitcoin wallet you can get, as follows:
- Desktop software
- Hardware device
Each has pros and cons. However, if you wish to use a Bitcoin ATM, you should likely choose a web-based Bitcoin wallet or mobile application.
Set Up a Bitcoin Wallet
You will need to make sure your digital wallet is ready to go and that you have easy access to it prior to making a transaction at a Bitcoin ATM. If you use a mobile app to set up your wallet, it is much easier to open up.
Keep in mind that mobile access will change depending on the type of wallet you have. To secure your crypto, all Bitcoin wallets have “keys.” These are usually alphanumeric characters.
You will either need to download a QR code or note your key. Your wallet will supply instructions, and you will need to follow the guidance they give you.
As soon as you set up your digital wallet, you can find a Bitcoin ATM. Click here for more info on Bitcoin ATM locations.
How to Work a Bitcoin ATM
If you want to purchase Bitcoin, the process is painless. Locate your Bitcoin ATM and arrive at your desired location.
Then, the Bitcoin ATM will want you to enter your Bitcoin wallet. This is where the Bitcoin ATM will send your funds, too.
Next, insert your cash. How much you can insert can depend on the Bitcoin ATM. Plus, the Bitcoin ATM will subtract a miner’s fee, and you will see this on your receipt.
Finally, take your receipt. The confirmation you get records your secure transaction. It is proof that you have Bitcoin worth the dollar amount of cash you put in.
Selling Bitcoin at the Bitcoin ATM
Some Bitcoin ATMs will allow you to convert Bitcoin to cash. Here is how.
First, to own Bitcoin, you already possess a Bitcoin wallet. Some people have more than one Bitcoin wallet. If that is the case, then choose which Bitcoin wallet you desire to sell from.
The Bitcoin ATM operator will want you to create an account to do this. Once you have an account, you will use their kiosk to enter how much Bitcoin you wish to sell. Then, you must also enter which Bitcoin wallet address you are going to sell from.
The blockchain, or Bitcoin network, will want to verify your transaction. You will get a notification when they verify it. As soon as they verify it, you can withdraw cash.
It takes longer to sell Bitcoin than to buy Bitcoin. How long it takes varies by the Bitcoin ATM operator. The operator will also charge a fee for your transaction, and so the cash you receive from the transaction will be after the operator’s fee and potentially the miner’s fee, too.
Sending Cash to Someone With a Bitcoin ATM
If you want to send someone you know Bitcoin, a Bitcoin ATM is a great way to do it. All you would need to do is sell a portion of your Bitcoin, and you can send your Bitcoin to their digital wallet.
However, you may not want to sell your Bitcoin. Instead, you may want to send cash. You can do this too, and here is how.
Again, you must start by holding an account with the Bitcoin ATM operator. When you arrive at the Bitcoin ATM, log in to your account. Enter how much cash you desire to send someone.
Next, add the person’s address for their Bitcoin wallet. You do not want to enter your wallet, but enter the digital wallet of the person you are sending the Bitcoin to.
Now, you can insert cash. The cash you insert will deposit in the Bitcoin wallet of the recipient in Bitcoin cryptocurrency. The person you send it could cash it and withdraw if they desire.
How Much Cash Could You Insert at a Bitcoin ATM?
It depends on the Bitcoin ATM operator. Usually, you see limits at $1,000 to $3,500 for each transaction, while some operators will let you insert up to $20,000.
Can I Purchase Bitcoin With a Credit Card?
Not with a Bitcoin ATM, no. Many people are advocates of this when conducting cryptocurrency business.
If you want to purchase with a credit card, though, you could do this with a peer-to-peer network. However, they are more prone to hacking, so proceed with caution.
Is a Bitcoin ATM Anonymous?
Transactions that users make with a Bitcoin ATM are anonymous, yes. That is why many users like cryptocurrency.
If anonymity is important to you with your financial transactions, consider Bitcoin over using a credit card.
Benefits of Cryptocurrency
If you still have not attempted a Bitcoin ATM transaction, what are you waiting for? If you are hesitant to dabble in cryptocurrency, then you must consider these significant advantages they offer.
Consider how long you take to transfer money to someone in the U.S. Most traditional financial institutions in the United States have transactions that will settle in three to five days.
When you send a wire transfer, typically it will take 24 hours at the least. For stock trades, they settle in three days.
Cryptocurrency transactions, on the other hand, can complete in a matter of minutes. All you need is confirmation by the block network, and it fully settled your funds. Further, they are ready to use.
Cost of Transactions
Compared to other financial services, the cost of crypto transactions is low. Take a domestic wire transfer, for example. This can cost you $25 or $30 to send.
When you wire money internationally, the cost is even more.
Typically, crypto transactions cost less. Although, it is important to understand that the cost of the fees depends on the demand of the blockchain, which could increase the cost of transactions. Even if the blockchain has congestion, though, median transaction fees are still less than the wire transfer fees.
While a Bitcoin ATM is convenient, all you need is a smartphone or computer and the Internet to use cryptocurrency. Setting up a Bitcoin wallet is quick, much quicker than going to your local bank to open an account. Plus, with a crypto account, you do not need an ID, and there is no credit check.
For people without bank accounts, cryptocurrency gives them a way to access financial services and not have to go to a centralized authority. Some people are unable to open a traditional bank account, while others are unwilling to. Even if you do not have a traditional bank account, Bitcoin wallets offer a way to send money to a loved one or make an online transaction.
There is no way to break into your account and access your funds unless someone has access to your wallet’s private key. Although, if you lose your private key, you are in a bit of a pickle. You cannot access your funds either.
Transactions are secure because of how the blockchain system works. There is a distributed network of computers that verify transactions. It becomes more secure as more computing power builds up the network.
For a hacker to attack the network and even try to change the blockchain is an enormous challenge. Someone would need to get enough computing power that they could confirm multiple blocks ahead of the rest of the network, verifying a ledger’s accuracy.
There are instances of crypto account hacking, but many times this is because a centralized exchange has poor security. When you keep your cryptocurrency in your digital wallet, there is a tremendous amount of higher security.
The blockchain ledger distributes publicly, and this is where all crypto transactions take place. Tools are available that would give anyone the ability to find the data for a transaction. You could find when, where, and how much crypto was sent to someone’s digital wallet.
Further, anyone can see the amount of cryptocurrency in a person’s wallet.
With so much transparency, it is a deterrent for fraudsters. You can prove you sent the money, and there is proof that it was received. Also, you can prove to someone that you have the funds to make a transaction if you were to make a purchase.
Protect Yourself From Inflation
Many people like Bitcoin and other cryptocurrencies because they see them as a way to protect themselves from inflation. How Bitcoin works are that there is a hard cap on what they will mint. This number will never grow.
Since the money supply is growing, it outpaces the growth of the supply of Bitcoin. Therefore, the price of Bitcoin should increase. There are a few cryptocurrencies with mechanisms to cap their supply, too.
Your transactions are pseudonymous. Your wallet address is your identifier on the blockchain. However, there are no specific details about you.
All the data of a transaction is public, but there is no way to identify you, the person making a transaction.
How to Use a Bitcoin ATM
Now that you have more details on how a Bitcoin ATM works and the benefits of cryptocurrency, you can roll out and start buying Bitcoin at your local convenience store, gas station, or anywhere else. Bitcoin is a hot financial topic, and we love bringing you valuable information on what is new and interesting in the world.
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