More and more cryptocurrency ATMs are popping up around the world. Since this is a relatively new phenomenon, it is normal to be a bit confused about what they are and how to use them. Essentially, cryptocurrency ATMs make it easier to buy and sell cryptocurrency.
The First One Ever
The first crypto ATM was in the form of a Bitcoin ATM at Waves Coffee House. It went live in October 2013. The first day it was in use, transactions totaled about $10,000 in Bitcoin. At the time, Bitcoin was worth about $200 each.
How They Work
From that first Bitcoin ATM, all cryptocurrency ATMs have operated on a similar principle. While a traditional ATM for fiat connects to your bank account via your debit card, that is not the case with a crypto ATM. Instead, Bitcoin ATMs just connect to the internet and the user’s chosen Bitcoin exchange. This lets you access a crypto exchange via the machine to buy crypto using cash or a card (depending on the machine) or to convert your crypto to cash.
Verification Methods Can Vary
Since crypto ATMs do not connect to your bank account, they do not ask you to insert a card and PIN like a fiat ATM would. Instead, they have their own verification methods to confirm your identity. The first ATM required users to scan their ID cards and palm to confirm identities. Some ATMs today require no or minimal verification of identities while others may require you to spend minutes proving you are a real person.
Finding a Crypto ATM
Unfortunately, there is no official system for finding a cryptocurrency ATM by you. Many areas of the world will not have any within a reasonable distance. Meanwhile, some cities have dozens. It all depends on the prevalence of cryptocurrency in the area. There are some third-party websites that track locations of crypto ATMs. Coin ATM Radar currently lists that there are 4,452 crypto ATMs in 77 countries. They work with BTC, BCH, ETH, Dash, LTC, ZEC, XMR, and/or DOGE.
Be Aware of Fees
The great thing about crypto ATMs is that they let you purchase cryptocurrency without having to visit a crypto exchange on your own device. Their convenience, however, is made up for with very high fees. Most crypto ATMs charge significantly higher fees than you would find at an ATM. This is a trade-off for convenience and the lack of verification required. Some ATMs even charge up to 16% per transaction.
How to Use Them
Using a cryptocurrency ATM tends to be fairly straightforward. If you want to buy crypto, you will select the “Buy” option on the screen and follow the instructions. You will need to already have a cryptocurrency wallet. Select the coin you want to buy and then have the machine scan the QR code for your wallet. Insert your money, hit Finish or Buy, and grab your receipt.
If you want to sell your crypto for cash, the process is also pretty straightforward. Select the option to withdraw cash. Select the coin you want to sell and the amount. Use your mobile wallet to scan the QR code the machine gives you, and send it the funds. The machine will dispense your cash.
The Takeaway
As time passes, you will likely see more and more cryptocurrency ATMs appearing around the world. While they tend to have high fees, they can also be incredibly convenient, so they are worth considering for those who are just getting into crypto.