Did you know that around 16% of Americans have invested in cryptocurrency in some way, shape, or form? In a little over a decade cryptos like Bitcoin have transformed from a novelty into a legitimate form of currency.
For proof, just look at the infrastructure that’s popping up around cryptocurrency, like Bitcoin ATMs. But what is a Bitcoin ATM? And how does a Bitcoin ATM work?
If you want to know the answers to these questions, then you’re in the right place. In this article, we’ll answer all your questions about these machines. That way, you can decide if they’re right for you.
What Is a Bitcoin ATM?
A Bitcoin ATM is a type of kiosk found around certain cities. This kiosk can connect to the internet allowing you to purchase Bitcoin cryptocurrency using any cash you have.
A Bitcoin ATM is not like a traditional one. It doesn’t allow you to access your funds and bank account. Instead, all it does is transactions related to Bitcoin and other types of cryptocurrencies.
Most Bitcoin ATMs will only accept physical cash for Bitcoin transactions. However, some newer models allow you to exchange any cryptocurrency you have for Bitcoin or cash.
There are even ones that allow you purchase gold. Traditionally, an ATM interaction will likely take under a minute to complete. That’s not the case with Bitcoin ATMs.
The transaction for these machines can last up to an hour, so be prepared for that when you arrive. And if you think Bitcoin ATMs sound like the perfect tool for bank robbers, then think again.
All Bitcoin ATMs are required to register their machines with the Financial Crimes Enforcement Network (or FinCEN). In addition to this, they must also comply with any provisions made by the Bank Secrecy Act.
These anti-laundering features place limits on how much money you can put in and the number of transactions you can make. In addition to this, a large transaction will require a government-issued ID to be cleared.
How Do These Bitcoin ATMs Work?
Most Bitcoin ATMs have a pretty straightforward interface. Before you get started you will need first need to verify your identity. To do this, enter your cellphone phone number into the kiosk.
This will register you into the system and confirm your identity for the ATM. Next, you need to input your blockchain wallet’s address.
This is a digital wallet that will be used to store any cryptocurrency that you purchase or trade. Setting one up is easy and typically free.
The simplest way to input your wallet address is to use the QR code that comes with it. Now, you’re ready to start inserting money into the Bitcoin ATM.
Before you start make sure you look at the exchange rate for cash to Bitcoin. Once you confirm it you can begin feeding it money. It will show you how much money you’ve inserted into the ATM.
After you finish you will be issued a receipt. However, your transaction isn’t over yet. Why?
Because to be confirmed Bitcoin needs to be verified on the blockchain a minimum of six times. That’s why the entire process can take up to an hour-long.
Pros of Bitcoin ATMs
There are a lot of reasons to like Bitcoin ATMs. For one thing, it allows you to convert fiat currency to cryptocurrency without the need for a centralized financial institution like a bank.
Next, Bitcoin ATMs are fast compared to the other method of cash deposits. You would have to deposit money in a bank, transfer it to the exchange you want, then buy Bitcoin.
Bitcoin ATMs, on the other hand, make it much more streamlined and quicker. Lastly, Bitcoin ATMs give you a lot more privacy than the average central exchange.
To buy, sell or trade on these sites you will need to fill out a full form before getting started. So, if you want to remain fairly anonymous Bitcoin ATMs are a good choice.
Cons of Bitcoin ATMs
Sadly, Bitcoin ATMs also come with some drawbacks that you should consider. First, Bitcoin ATMs typically charge much higher processing fees than the average online exchange.
The specific amount can vary from ATM to ATM. But, the result means that your cash won’t go as far as it would online.
Second, Bitcoin ATMs have limits on the number of transactions you can complete. This is to protect against money laundering, but it does make things inconvenient if you’re making a lot of deposits.
Lastly, Bitcoin ATMs are not widely available. They’re typically only available in big cities. So, if you don’t live near one, then you might not have access to buy cryptocurrency.
How to Find a Bitcoin ATM
Depending on where you live Bitcoin ATMs might be widespread or hard to find. If you live in a major city, then you should be able to find them fairly easily.
However, if you live in a smaller city or a rural town, then you’re not likely to be able to find them. If you want to find a Bitcoin ATM that’s close by the easiest way is to search ‘Bitcoin ATM near me’ on Google.
Just make sure you pick an ATM that has a good reputation. You should also check to see that they’re following all regulations.
Ideally, they’ll also offer low transaction fees. But, depending on your options you might not have this luxury.
Appreciate Learning About Bitcoin ATMs? Keep Reading
We hope this article helped answer the question, What is a Bitcoin ATM? As you can see, Bitcoin ATMs are an excellent way to turn any physical money you have into cryptocurrency.
That being said, there are some drawbacks that you should consider before using them.
Did you enjoy learning about Bitcoin ATMs? If the answer is yes, then keep reading our website to find similar content that’s just like it.
