Important Things You Need To Know Prior To Buying Bitcoin From An ATM

Important Things You Need To Know Prior To Buying Bitcoin From An ATM

Bitcoin News
September 29, 2022 by Diana Ambolis
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The recommendation that you first open an account with a cryptocurrency exchange and download or buy a crypto wallet to store your bitcoin (BTC) is frequently the first tip in buying guides. However, there is another practical method of purchasing that doesn’t require the use of a computer, much less a cryptocurrency exchange. People have
Important Things You Need To Know Prior To Buying Bitcoin From An ATM

The recommendation that you first open an account with a cryptocurrency exchange and download or buy a crypto wallet to store your bitcoin (BTC) is frequently the first tip in buying guides. However, there is another practical method of purchasing that doesn’t require the use of a computer, much less a cryptocurrency exchange. People have the option to buy BTC using a bitcoin automated teller machine (ATM) by inserting cash or their debit cards and following a few simple procedures. However, even if bitcoin ATMs are a significant market component, many people still find the idea of utilizing one absurd. How can an ATM that typically spits out tangible currency be used to distribute something like bitcoin, which is solely a digital currency?

What are ATMs for bitcoin?

People can purchase bitcoin and occasionally other cryptocurrencies using cash or debit cards at bitcoin ATMs. The word “ATM” is a little deceptive, though. They don’t function like bank ATMs, letting users control their accounts’ money. They are tools that allow you to buy and sell bitcoins and don’t require users to open accounts.

Bitcoin ATMs allow customers to control their own purchased bitcoin by wiring the money straight to a crypto wallet of their choice, unlike cryptocurrency exchanges. You can choose to have your coins transmitted to the “deposit address” provided by your business and allow the platform to custody of the assets for you if you utilize centralized exchanges like Binance or Coinbase (COIN). Purchasing bitcoin through an ATM frequently involves the establishment of a wallet, and this is the step that scammers typically target (as we’ll see later). The first bitcoin ATM appeared in a Vancouver, Canada, coffee shop in 2013. Bitcoiners back then would frequently spend their currency at cafés or spend 10,000 coins on two pizzas.

CoinDesk – Operators of unknown bitcoin ATMs (Coin ATM Radar)

Since then, they have appeared in countless cities and countries. According to information from Coin ATM Radar, there are currently 36,610 bitcoin ATMs spread across 77 different nations. With 15,140 machines, Genesis Coin leads all producers of bitcoin ATMs, followed by General Bytes (7,965 machines) and BitAccess (5,549).

The top three operators of bitcoin ATMs are CoinFlip (9.7%), CoinCloud (14.1% of the market), and Bitcoin Depot (19.1%).

CoinDesk – The increase of Unknown Bitcoin ATM installations ( (Coin ATM Radar)

How to use an ATM to purchase bitcoin

  1. When you see a bitcoin ATM, you’ll notice that it has a QR code that instructs you to download a specific cryptocurrency wallet that the ATM supports.
  2. The Coinbase cryptocurrency wallet is a well-liked alternative, but there is a sizable selection of other wallets.
  3. If you haven’t previously, you must first download the wallet and then adhere to any setup instructions that may be given.
  4. After the transaction is approved and finished, the ATM will deliver your acquired coins to the the specified address generated by your just-established wallet.
  5. You only need to follow the screens’ directions because they are designed to be intuitive for once those who have used an ATM before.
  6. Different countries and locations will have slightly different machines, and some may require you to go through know-your-customer (KYC) procedures before approving the transaction. There may be additional minimum and maximum purchase amounts.
  7. After setting up the wallet and finding your address for inbound transactions, you need to enter the amount and your crypto wallet address. Instead of manually putting it in, you can typically accomplish this automatically by scanning the QR code on your phone’s screen (which can lead to mistakes and cause your funds to be lost forever.)
  8. Although it could take up to an hour, the transaction is often finished in under 10 minutes.

Also Read: Josselin Tonnellier And His Opinions About Blockchain And Bitcoin

Benefits and drawbacks of bitcoin ATMs

  • ATMs are an excellent way for individuals who aren’t tech-savvy to get started with cryptocurrency. Fortunately, it doesn’t come at the expense of compromised security because most ATMs don’t keep users’ private keys, bank information, or KYC information.
  • However, there are some apparent drawbacks. Compared to a cryptocurrency exchange, bitcoin ATMs have stricter purchasing restrictions and astronomical costs (7%–20% in some situations). Additionally, there is little to no customer service offered if something goes wrong.
  • Be on the lookout for bitcoin ATM fraud.
  • Using bitcoin ATMs is a component of two frauds.
  • On websites like eBay, Craigslist, or Gumtree, con artists frequently post items for sale (UK). These things are often marked down significantly from the going market prices to entice interested parties to get in touch.
  • The con artists claim that to ensure those prices, and the victims must make cryptocurrency purchases; typically, this entails using a bitcoin ATM to deposit money and sending the cryptocurrency to the con artists’ wallet address. The con artists disappear after the transaction is finished.
  • Due to the irreversible and mostly unregulated nature of blockchain-based payments, this is popular with scammers. A transaction can rarely be reversed once it has been completed.

More complicated and nefarious bitcoin ATM scams exist.

Scammers frequently target job seekers and promise them temporary jobs. In the trial, con artists send money to a victim’s bank account and instruct the recipient to withdraw the money, use an ATM to convert it to bitcoin, and then transfer the cryptocurrency to the con artists’ address. However, the money paid to the victim’s account was reversed a few days later because it came from a stolen account. (Read one Reddit user’s understanding of how they were conned out of money here.) The history of the victim now has a negative balance. Overall, it could be a viable option if you’re trying to buy a respectable amount of bitcoin in a somewhat secret manner and you’re not especially fussed about paying hefty fees – provided there are machines in your area, of course. Alternatives include using an exchange or buying using the software you most likely already have on your smartphone.