Did you know that you can buy your morning coffee using bitcoin? All you have to do is link your Starbucks app to your crypto wallet.
Your morning java isn’t the only thing that you can buy with digital currency. You can also get cars, groceries, and airline tickets.
For things that you can’t buy directly with bitcoin, you can get a gift card that you can use to purchase the item. You can also withdraw the cash you need for what you want at a cryptocoin ATM.
The question is, what is a bitcoin ATM, and how do they work? Continue reading to find out.
What Is a Cryptocoin ATM?
A cryptocoin ATM has the same appearance and function as a regular bank ATM. The difference is that it’s connected to the cryptocurrency exchange instead of a bank.
Every transaction is processed through the blockchain. Once the transaction goes through, you won’t be able to reverse it.
While most ATMs will allow you to buy and sell more than bitcoin, you’ll still be limited. If you don’t use one of the more popular coins on the market, you’ll be out of luck.
Benefits of Using a Bitcoin ATM
The biggest advantage of using an ATM is that it’s probably the easiest way to buy bitcoin because you don’t have to be super tech-savvy.
Bitcoin ATMs are also secure, the transactions can be completed within a couple of minutes, and it’s a great way to convert currency.
You’re a Beginner
If you can use an ATM at the bank, you can use a bitcoin ATM. All you have to do is follow the steps on the screen.
You have to meet certain requirements to be able to open a bank account. With a bitcoin ATM, you only need a phone number and digital wallet.
Secure Transactions
Since bitcoin is an online-based currency, many people worry about security. In truth, going to a bitcoin ATM is safer than going to a bank.
When setting up a bank account, you have to hand over a lot of personal information. Information that, if leaked, could give someone everything they need to steal your identity. You don’t have to use your social security number at a cryptocoin ATM.
If someone manages to get their hands on your digital wallet, they won’t be able to take it to an ATM and wipe your account clean. You see, before you’re allowed to buy and sell, you have to confirm your identity.
To do this, you can have a code sent to your phone or scan your driver’s license. If the thief has neither, it will be impossible for them to access your wallet.
Crypto ATMs Are Fast
Once you insert your cash and hit the confirm button at the ATM, you can expect to see your bitcoin in your wallet within a few seconds. In the case of selling, you may have to wait up to ten minutes.
If after an hour you don’t see your funds, you’ll need to contact customer service. These instances are rare, but they do happen.
If you buy bitcoin online instead of going to an ATM, it will be a few days before you receive your coins.
They’re Great for Travelers
After traveling to another country and getting off a long flight, the last thing you want to do is wait in line to convert your currency.
Save yourself some time by going to a bitcoin ATM and exchanging some of your digital currency for cash. If you’re in Europe, for example, the machine will convert your US bills into euros as a default.
Cons of Using a Bitcoin ATM
Of course, nothing is without its flaws. There are some cons that you have to take into account before you head to your nearest bitcoin ATM. The main one is availability.
You’ll also have to deal with high transaction fees, and customer support can be shaky at best.
Availability
Since cryptocurrency isn’t widely accepted as a form of cash yet, there aren’t a lot of bitcoin ATMs around. If you live in a big city, you can find them in most airports and convenience stores.
If you live in a more rural area, however, you’re going to have to do some driving. It’s likely that there isn’t a machine around for miles.
Transaction Fees
You can’t buy and sell bitcoin for free at the ATM. You’ll have to pay a large convenience fee.
While the average amount is about 8%, some companies will charge up to 30%.
Customer Support
At the end of the day, bitcoin ATMs are a piece of technology, and technology can be fickle. If the software malfunctions while you’re in the middle of your transaction, you’ll have no choice but to call customer service.
Since bitcoin ATMs are still pretty new, it could take weeks for a technician to come out and fix the machine. If that particular machine is the only one in your area, you’ll have no choice but to wait.
Setup Your Crypto Wallet
Before you go to a bitcoin ATM at this location or dabble in the cryptocurrency industry at all, you’ll need to set up a digital wallet. This is the place where you’ll store your bitcoin.
Well, it will reflect the amount of bitcoin that you have access to on the blockchain, anyway.
You can choose between hot and cold wallets. They both have their own set of pros and cons.
Hot Wallets
Hot wallets are wallets that you can’t use without an internet connection. It’s for this reason that they are vulnerable to hackers and malware. This being said, hot wallets are simple to set up and use, making them a popular choice for beginners.
Some of the most popular hot wallet options are mobile, desktop, and web. Since you’re going to a bitcoin ATM, mobile and web are going to be the easiest ones to work with.
With mobile wallets, you only need to download an app, take your phone to the ATM, and scan a QR code. Web wallets work about the same way, except you’ll pull your wallet up in a browser instead of using an app.
Cold Wallets
Cold wallets are wallets that work completely offline. They provide greater security because they’re impossible to hack.
Hardware is the most popular type of cold wallet. They often take the form of flash drives and are available at most electronic stores. They’re easy enough to use, but they’re expensive. One hard drive can cost up to $200.
The second most popular cold wallet is a paper wallet. They’re cheaper than hardware wallets, but they’re more difficult to use.
They’re also fragile. If you rip your paper wallet, that’s it. You’ll no longer have access to your private keys.
How Do You Find a Cryptocoin ATM?
Again, cryptocoin ATMs aren’t easy to find. The best thing you can do is look up a map online.
They’ll show you a list of machines that are in your area. Some of them will even display operation fees, so you know what to expect before you go.
Buying Bitcoin
Once you have your wallet set up and find an ATM, it’s time to go through the process of buying. The first thing you’ll need to do is verify your identity.
To do this, you can punch your phone number into the machine. You’ll receive a code that you’ll type into the machine. If you don’t have a mobile phone, you can scan your driver’s license instead.
Once you verify your identity, open your wallet and scan the QR code. You’ll then tell the ATM how much bitcoin you want to purchase.
You’ll have to insert physical cash into the machine to buy the cryptocurrency. Bitcoin ATMs won’t take your bank credit card.
Selling Bitcoin
Selling bitcoin works pretty much the same as buying it. Select the sell option, verify your identity, and scan your wallet.
Tell the machine how much bitcoin you want to sell, and hit the confirm button. It will print out a receipt that you’ll need to have on your person when it comes time to pick up your cash.
Everything You Need to Know About Using a Cryptocoin ATM
There are so many things that you can buy with bitcoin. Even if you can’t get all the things you want, you can go to a cryptocoin ATM to exchange your digital currency for cash that you can use.
As you can see, using one of these machines is about as easy as operating a bank ATM. You don’t need a lot to get started, and the process only takes about ten minutes. It’s a win-win!
For more information on bitcoin ATMs and digital currency, visit the Crypto section of our blog.
