Depending on where you are in the world, and indeed how acquainted you are with cryptocurrencies, Bitcoin ATMs may be either be a very familiar or rather alien concept to you. Traditionally Bitcoin has been and continues to be predominantly bought and sold over the internet, but there is an increasing amount of Bitcoin ATMs around the globe. So in the cyber-age, why do Bitcoin ATMs exist? And how do you use them? All will be revealed and more in the lowdown on Bitcoin ATMs.
What is a Bitcoin ATM?
Let’s start with the basics. A Bitcoin ATM looks like just a conventional ATM, but instead of dispensing fiat currency, it – you’ve guessed it – dispenses Bitcoins. Some have the function of enabling you to sell Bitcoins as well, and some also have the function of enabling you to convert Bitcoin into fiat currency. There may be several reasons as to why you want to use a Bitcoin ATM; you may want Bitcoin to spend online, you may wish to trade Bitcoins for fiat currency in a foreign currency, or you may want to acquire some to trade with, which of course you can do here on Bybit.
How do I buy Bitcoin at a Bitcoin ATM?
It should be emphasized that before you can buy Bitcoin at a Bitcoin ATM, or sell or convert to fiat currency, you will need to have a Bitcoin wallet. Some will actually allow you to create one at the ATM, although others will require you to create one beforehand. Read this guide on how to choose a Bitcoin wallet, if you don’t already have one. Although it may vary slightly between different ATMs, the general process of how to buy Bitcoin at a Bitcoin ATM is the same.
1. The Bitcoin ATM will ask you how much Bitcoin you want, so input your desired amount. At this stage, the ATM should tell you how much it will cost in fiat.
2. Verify your phone number through an SMS code sent to your phone (although not all Bitcoin ATMs will perform this security process)
3. Some Bitcoin ATMs may also require additional security steps, such as fingerprint or ID at this point too, so provide your fingerprint or ID if prompted at this stage.
4. Go to ‘deposit’ and input your Bitcoin wallet address. This could be done by inputting manually or by scanning the wallet QR code from your phone.
5. Insert the required amount of fiat into the ATM
6. Get the receipt from the ATM for the transaction
Where can I find a Bitcoin ATM?
The first Bitcoin ATM in the world opened in October 2013 in a coffee shop in Vancouver, Canada, and there are now over 6,000 worldwide. This below chart is a striking visual demonstration of the rapid rise of them globally over their six year lifespan, and with this map, you can find your closest Bitcoin ATM, no matter where you are.
North America leads the way in their geographical distribution, with 77% of Bitcoin ATMs around the world located in the United States or Canada. Europe follows on 19%, and perhaps surprisingly, despite being the much labeled ‘crypto hub of the world’, Asia only has 2% of all Bitcoin ATMs. South America follows, with 1%, Oceania has 0.4%, and Africa sees itself with the least out of all the (inhabited) continents, with 0.2% of all Bitcoin ATMs to date, 11 in total.
Advantages and disadvantages of Bitcoin ATMs
So why use Bitcoin ATMs when they can be bought and sold simply them on the internet? Well, there are several advantages to using Bitcoin ATMs, especially in some areas of the world.
• Ease of use and convenience
Bitcoin ATMs work in the same way as normal ATMs, with the only real difference being the security steps, so they are very easy to use. Additionally, to the less computer-literate among us, and in less economically developed countries, it may be more convenient to use a Bitcoin ATM to buy and sell Bitcoin rather than doing so over the internet.
In Venezuela, for example, a country that has experienced extreme economic hardship in recent years, the country’s first Bitcoin ATM opened in September 2019. Many in the country have turned to Bitcoin as their go-to currency because of hyper-inflation, with ATMs often not able to dispense cash, and so the machine in the town of San Antonio del Táchira is bringing the added benefit to those who use it of being able to give them much needed cash.
Transactions can be completed very quickly, in around 15 seconds, in contrast to when people need to transfer from their bank accounts to their Bitcoin wallet or vice versa, a process that could take a day or even longer. Also, it can be very convenient for people traveling abroad, as people can simply use a Bitcoin ATM to exchange for the local fiat currency, instead of having to exchange fiat-to-fiat, which can sometimes be an inconvenient process.
Bitcoin ATMs are safe to use, as there are no third parties involved – only the manufacturer of the machine, and the user. The machines also allow for anonymity, meaning no trail is left after the transactions.
• Mainstream adoption
The increasing use of Bitcoin ATMs, in prominent public places such as shopping malls, can only help in winning over the wider population of the legitimacy of the cryptocurrency, and that it is no ‘scam’. Approximately 11 new Bitcoin ATMs are being installed every day worldwide.
Yet as with most things in life, there are also some potential disadvantages which should be considered.
• High transaction fees
There’s no getting around the fact that Bitcoin ATMs have high transaction fees. The average has been quoted at 8.93%. Compared to Bitcoin transactions done online, this is significantly higher. Unlike regular ATMs, Bitcoin ATMs usually charge a percentage of the transaction rather than a flat fee. Part of the reason for this has been put down to the fact they’re still quite new in their development, but as their numbers continue to expand around the world, and there is more competition between machine manufacturers, then hopefully the fees will come down accordingly.
• Lack of locations
Although they are growing in number all the time, the number of Bitcoin ATMs worldwide is still quite low. Even in the United States, the country with the most Bitcoin ATMs, the number (4198 at the time of writing – 12/3/2019), dwindles compared to the approximately 500,000 ATMs. So, there is a long way to go, but as time goes on, the amount of machines will only continue to grow and grow, and it will be easier and easier to find a Bitcoin ATM near you – hopefully
• Lack of reliability
This issue is again is related to the lack of locations. If you live in a city and the nearest ATM is out of order, it most likely won’t be a problem as there will be almost certainly another functioning one nearby. However, if your local Bitcoin ATM is out of order, then you may be stumped, because there might not be another one in your city – or even your country. However, again this is an issue that will happen less and less as the amount of Bitcoin ATMs continue to grow.
Bitcoin ATMs certainly will appeal to many for their convenience, and their increasing prominence is helping to propel Bitcoin into the eyes of the wider population as a legitimate currency. However. as with most things that have the potential to become mainstream, there are stumbling blocks. The high transaction fees may well be one of those factors holding Bitcoin ATMs back from expanding in numbers even more. Yet as their expansion worldwide continues, and with more competition between the machine manufacturers, hopefully fees can come down – and their usage increases. This, in turn, can only help in bringing about the mass adoption of Bitcoin.