In this rapidly evolving cryptocurrency landscape, Bitcoin ATMs and their installations are massively increasing worldwide. However, Bitcoin ATM is also known as Bitcoin Teller Machine (BTM) and it allows BTM users to buy and sell Bitcoin either using fiat (Cash) or debit/credit cards. It is similar to traditional ATMs and also looks similar to them, but despite withdrawing cash here with cash you can buy Bitcoin or even sell your Bitcoin for cash.

In this article, we’ll see more about Bitcoin ATMs, how they work, their advantages and disadvantages, and many more things. So, make sure to read till the end for a complete understanding of Bitcoin ATMs.

What is a Bitcoin ATM?

A Bitcoin ATM is a machine that helps crypto enthusiasts buy or sell Bitcoin through a vending machine. To use this machine, you don’t need to have an existing account, meaning if you have then well and good, but if you don’t have then with minimal verification, you can create a crypto wallet to store bitcoin and other altcoins. To buy Bitcoin, you should have either cash or credit, or debit cards. 

It also helps you to withdraw cash in exchange for Bitcoins, just like traditional ATMs. However, it depends on ATM manufacturers, service providers, and sometimes specific models of ATM. For all these top-notch facilities, ATM charges a small amount of fee based on the transactions. 

However, these fees help ATM operators to become motivated, and in recent days crypto enthusiasts across the world are trying and make a passive income with this ATM. According to recent news, the installation of these ATM is significantly increasing across the globe, and the sales of these ATMs hit $1 billion this month.

How does a Bitcoin ATM work?

These ATM works in a very simple manner, just like the traditional ways, but based on the manufacturer, service providers, or specific models, they work differently. Here’s a simple overview of how it works:

User authentication: Crypto enthusiasts need to provide their identification if they have their account already, or scan a QR code from the mobile crypto wallet, or if the user is new, then they can create an account there.

Enter the amount to buy and sell: Here, in this step, users need to place a certain amount of money that they use to buy Bitcoin, or enter the amount of Bitcoin to withdraw cash from the ATMs. Just like the traditional ones.

Payment Type: Once you place the amount of buying you need to pay using cash, or debit/credit cards. However, to sell, you need to scan the QR code.

Transaction confirmation: Once the payment is successful, users receive the confirmation receipts just like a traditional paper receipt, users receive after cash withdrawal from the ATM.

This is a simple overview of BTM and how it works.

Bitcoin ATM fees

Using Bitcoin ATMs is fascinating, but the charges the operators take for the services can vary between 10% to $23% of the total transaction value. However, several factors cause price differences, such as the geographical location, the BTM operator, and the total transaction value.

These operators charge this decent fee just to make sure all transactions go smoothly. Things like ATM rent or cost, customer support costs, cash logistics services cost, leasing space cost, and many other costs make the transaction fees too high as compared to online buying of cryptocurrencies. 

One thing crypto users must think of is that before using any Bitcoin ATMs, make sure cross-check the fee structure. 

Types of Bitcoin ATMs

As we all know, Bitcoin ATMs are used to buy Bitcoin using cash or debit/credit cards, or sell Bitcoin for cash. However, this thing is not common in Bitcoin ATMs, there are two types of Bitcoin ATMs. These are as follows

Unidirectional Bitcoin ATMs: This type of Bitcoin ATM is very common across the world. In this crypto, users can only buy Bitcoin or altcoins using cash/fiat or debit/credit cards, and based on the transaction, these ATMs charge fees.

Bi-directional Bitcoin ATMs: This type of Bitcoin ATM allows users to buy cryptocurrencies using cash, or they can sell their cryptocurrencies and withdraw cash from the ATMs. This type of Bitcoin ATM is being installed more these days.

These are the types of Bitcoin ATMs that currently exist across the world.

Concerns and Challenges

Despite lots of benefits of using Bitcoin ATMs, it also comes with a lot of challenges, which are as follows:

Regulatory Uncertainty: There are many countries across the world where cryptocurrency is legal, and they are using these ATMs. But in countries like India, where there is no clear stance on crypto, BTMs can face regulatory challenges.

Security Concern: As these ATMs hold cash, there is also a chance that anyone can physically damage these ATMs to remove the cash. Additionally, it could be an easy target for thieves and hackers.

High transaction fees: Bitcoin ATMs’ transaction fees are much higher, and they vary between 10% to 23%. However, these massive fees can damage crypto users’ pockets.

Exchange Volatility: In online buying cryptocurrency, crypto users can place a limit-order type to buy any cryptocurrency, but here on Bitcoin ATM, due to high volatility, it is very difficult for users to buy crypto in such a scenario.

These are some challenges and concerns of Bitcoin ATMs.

Benefits and risks of Bitcoin ATMs

These ATMs come with lots of benefits as well as risks. Here we’ll see what those are:

Benefits:

• They are easy to access even if there are any internet issues.
• Many Bitcoin models allow users to buy cryptocurrencies with minimal personal information.
• These ATMs are much faster than buying cryptocurrencies on online cryptocurrency exchanges.
• Users can buy cryptocurrencies without even having a bank account, as through BTM, users can buy using fiat/cash.
• No involvement in any government trouble like regulatory issues or money laundering cases, on online exchanges, or others.

Risks

• BTM transaction fees are much higher than online exchanges.
• Only a few BTMs allow users to sell cryptocurrencies.
• In this, there are concerns of theft, fraud, and tampering.
• Limited customer support
• Not everyone can use BTMs; only a few countries do.
• Lack of crypto price maintenance compared to online exchanges.

Conclusion

A Bitcoin ATM is just like a traditional ATM, which allows crypto enthusiasts to buy cryptocurrencies using cash or debit/credit cards. Additionally, users can sell their cryptocurrencies and withdraw cash from them. This BTM allows users to buy cryptocurrencies with limited information. However, the transaction fees of BTMs are very high compared to online exchanges.

FAQs

Can you withdraw cash from a Crypto ATM?

Yes, it is possible to withdraw cash from a Crypto ATM after you sell your cryptocurrencies, but only a few Bitcoin ATM models have this feature.

Is it safe to use a BTM?

Yes, it is safe, but there is also a possibility of theft, fraud, and tampering.

How much does a Bitcoin ATM charge per transaction?

Bitcoin ATM charges a transaction fee of between 10% $23% of the total transaction value of any cryptocurrencies.