4,263 Bitcoin ATMs were added to the global network in 2022 amid a year-long speculative market.
Despite a slowdown in ATM installations in the second half of 2022 due to global inflation and geopolitical tensions, Spain and Australia have the largest number of installed crypto ATMs.
Meanwhile, the United States and Canada remain the top countries with the highest number of ATMs overall.
What you need to know before buying Bitcoin at an ATM
Buying crypto doesn’t have to involve dealing with complicated exchanges. In some places, there are ATM machines specially designed to facilitate transactions.
Guides to buying bitcoin (BTC) often start with the advice that you should first create a cryptocurrency exchange account and download or purchase a crypto wallet to store it. But there’s another convenient way to buy bitcoins that doesn’t involve using a computer, let alone a cryptocurrency exchange.
Using a bitcoin ATM, people have the opportunity to buy BTC by inserting cash or their debit cards and completing a few basic steps. But while bitcoin ATMs are becoming a growing part of the industry, the thought of using one still seems like an oxymoron.
How can something like bitcoin, which is a purely digital currency, be dispensed by an ATM that normally dispenses physical currency?
It’s a very good question. Here’s what you need to know.
What are bitcoin ATMs?
Bitcoin ATMs allow people to buy bitcoins – and sometimes other cryptocurrencies – using cash or debit cards. However, the term ATM is somewhat misleading.
Bitcoin ATMs are not like bank ATMs that allow customers to manage the funds in their accounts. Bitcoin ATMs are simple tools through which you can buy – and sometimes sell – bitcoins and do not require users to create any kind of account to do so.
Unlike cryptocurrency exchanges, bitcoin ATMs allow users to keep their own purchased bitcoins by plugging the coins directly into a crypto wallet of their choice.
However, if you use centralized exchanges like Binance or Coinbase, you can also choose to have your coins sent to the “deposit address” provided by your exchange and let the platform hold the assets for you.
Creating a wallet is often a key part of the process of buying bitcoins using an ATM, and this is where scammers usually target (as we’ll explore below).
The first bitcoin ATM appeared in 2013, in a cafe in the Canadian city of Vancouver. At the time, it was common practice among bitcoiners to spend bitcoins in coffee shops or drop 10,000 coins on two pizzas.
Since then, bitcoin ATMs have appeared all over the world. To date, there are 36,610 bitcoin ATMs in 77 different countries, according to data from Coin ATM Radar. Genesis Coin is the largest bitcoin ATM manufacturer with 15,140 machines, followed by General Bytes with 7,965 and BitAccess with 5,549.
The leading bitcoin ATM operators are Bitcoin Depot (19.1% market share), CoinCloud (14.1%) and CoinFlip (9.7%).
How to buy bitcoins from a bitcoin ATM
When you spot a bitcoin ATM, you’ll often find that it has a QR code attached that prompts you to download a specific crypto wallet supported by the ATM machine.
A popular choice is the Coinbase crypto wallet, but you can also choose from a large list of other wallets.
You’ll need to download the wallet first, if you haven’t already, and follow any setup instructions when prompted.
Your new wallet will create a unique bitcoin address to which the ATM will send your purchased coins after the transaction is confirmed and completed.
Bitcoin ATMs are meant to be an intuitive experience for anyone who has used an ATM before, so all you’ll need to do is just follow the on-screen instructions.
Machines will vary somewhat by country and location, and some may require you to complete known customer (KYC) steps before allowing the purchase. Minimum and maximum purchase amounts may also vary.
Once you’ve set up the wallet and found your wallet address for incoming transactions, you’ll want to type in the amount you want to buy and enter your crypto wallet address. This is usually done automatically by scanning the QR code on your phone screen instead of typing it in manually (which can lead to mistakes and cause you to lose your money for good.)
The transaction usually takes about 10 minutes to complete, although it can also take up to an hour.
Advantages and disadvantages of bitcoin ATMs
For non-tech-savvy users, bitcoin ATMs are a great gateway to cryptocurrencies. Fortunately, it doesn’t come at the expense of security because most ATMs don’t store users’ KYC information, bank details or private keys.
But there are some obvious drawbacks. Bitcoin ATMs charge exorbitant fees – 7%-20% in some cases – and there are also stricter limits on purchases compared to a cryptocurrency exchange. Also, in case something goes wrong, there is little to no customer support available.
There are three types of scams that involve using bitcoin ATMs
- Scammers often advertise products for sale on websites such as eBay, Craigslist or Gumtree (UK). These items are usually priced at a significant discount to the usual market price, prompting potential buyers to get in touch.
- Scammers tell victims that they need to make purchases via crypto if they want to secure those prices — typically by depositing money at a bitcoin ATM and sending the crypto to the scammers’ wallet address. Once the transaction is complete, the scammers disappear. This is popular with fraudsters due to the irreversible and largely uncontrollable nature of blockchain-based payments. Once a transaction is finalized, it is nearly impossible to reverse.
- Scammers often target job seekers and offer them trial work. The test involves scammers sending money to a person’s bank account and then telling the person to withdraw it and convert the money to bitcoin at a bitcoin ATM, then transfer the cryptocurrency to the scammers’ address. A few days later, however, the funds sent to the victim’s account are reversed because they came from a stolen account. This leaves the victim’s account with a negative balance.
Overall, if you want to buy a reasonable amount of bitcoins in a relatively private way and don’t particularly mind paying high fees, then a bitcoin ATM could be a good option for you – provided there are bitcoin ATMs in your area, of course.
Watch more videos on Krypto Hodlers YouTube Channel and don’t forget to subscribe for the latest news!
Read more about crypto:
- LYOPAY at Future Blockchain Summit 2022: The Recap
- Why are top networkers switching to WEWE Global?
- The Power of Referral Marketing
- WEWE community can vote on platform developments
- EKO Rally Acropolis 2022 – LYOPAY Sponsor
- Token Rewards for 900 Days with Cloud Minting Program
- Blockchain and Crypto-Tech
- WEWE Global – The New Step to Crypto Utopia
- LYO Token Burning – What is token burning?
- LYO listed on 7 crypto exchanges
- 5 Reasons to Trade on LYOTRADE Exchange
- LYOPAY Joins Future Blockchain Summit 2023 in Dubai