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Buying Bitcoin from a bitcoin ATM


 What You Need to Know Before  Buying Bitcoin from a bitcoin ATM.

Buying Bitcoin from a bitcion ATM

Buying crypto doesn't have to involve dealing with complex exchanges. Some places have ATMs specially designed to facilitate transactions.

Bitcoin (BTC) buying guides usually start with the advice that you should first create a cryptocurrency exchange account and download or purchase a crypto wallet to store it. However, there is another convenient way to buy bitcoin that doesn't involve using a computer, let alone a cryptocurrency exchange.

Using a bitcoin ATM, people have the option to purchase BTC by inserting cash or debit cards and performing a few basic steps. But as bitcoin ATMs become a growing part of the industry, the idea of ​​using one of them still sounds like an oxymoron to many.

How can something like bitcoin, a purely digital currency, be distributed by an ATM that normally spits out physical currency?

This is an excellent question. Here's what you need to know.

What are Bitcoin ATMs?

Bitcoin ATMs allow people to purchase bitcoin and sometimes other cryptocurrencies using cash or a debit card. However, the term ATM is somewhat misleading.

Bitcoin ATMs are not like ATMs that allow customers to manage funds in their accounts. Bitcoin ATMs are simple tools with which you can buy – and sometimes sell – bitcoins and do not require users to create any accounts to do so.

Unlike cryptocurrency exchanges, bitcoin ATMs offer users the ability to hold their own purchased bitcoins by linking tokens directly to a crypto wallet of their choice. However, if you use centralized exchanges like Binance or Coinbase (COIN), you can also choose to have your coins sent to your "deposit address" provided by your exchange and let the platform hold the assets for you.

Wallet creation is often an essential part of the process of buying bitcoin using ATMs and is the part that is often targeted by scammers (as we'll explore below).
The first bitcoin ATM appeared in a cafe in Vancouver, Canada in 2013. Back then, it was common for bitcoin users to spend bitcoin at cafes or drop 10,000 coins for two pizzas.

Since then, bitcoin ATMs have been popping up all over the world. According to Coin ATM Radar data, as of today, there are 36,610 Bitcoin ATMs in 77 different countries. 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 top bitcoin ATM operators are Bitcoin Depot (19.1% market share), CoinCloud (14.1%), and CoinFlip (9.7%).

How to buy bitcoin from a bitcoin ATM?

  • When you see a bitcoin ATM, you usually know that it has a QR code that prompts you to download a specific crypto wallet powered by the ATM.
  • A popular option is the Coinbase crypto wallet, but you can also choose from a long list of other wallets.
  • If you haven't already, you'll need to download the wallet first and follow the installation instructions when prompted.
  • Your newly created wallet will generate a unique bitcoin address to which the ATM will send your purchased coins once the transaction is confirmed and completed.
  • Bitcoin ATMs are an intuitive experience for anyone who has used an ATM before, so all you have to do is follow the on-screen instructions.
  • Machines vary slightly by country and location, and some may require you to complete know your customer (KYC) steps before authorizing a purchase. Minimum and maximum purchase amounts may also vary.

After installing your wallet and specifying your wallet address for incoming transactions, you will need to enter the amount you want to buy and enter your crypto wallet address. This is usually done automatically by scanning the QR code on your screen phone instead of entering manually (this can cause errors and permanent loss of funds).

It normally takes roughly 10 minutes to complete the transaction, but it could take up to an hour.

Advantages and Disadvantages of Bitcoin ATMs

For non-tech-savvy users, Bitcoin ATMs are a great gateway to crypto. Fortunately, most ATMs don't store users' KYC information, bank details, or private keys, so it doesn't come at the expense of security compromise.

But there are obvious downsides. Bitcoin ATMs charge exorbitant fees – 7% to 20% in some cases – and also have stricter purchase limits compared to a cryptocurrency exchange. Also, if something goes wrong, there is little or no customer support.

Beware of scams involving Bitcoin ATMs

There are two scams involving the use of Bitcoin ATMs:

  • Scammers often advertise items for sale on sites like eBay, Craigslist or Gumtree (UK). These items are often sold at a discount to the normal market price and encourage potential buyers to get in touch.
  • Scammers tell victims that if they want to secure these rewards, they should usually make purchases by depositing money at a bitcoin ATM and sending the crypto to the scammer's wallet address. Once the process is complete, the scammers disappear.

This is popular with scammers due to the irreversible and largely unregulated nature of blockchain-based payments. Once a transaction is complete, it is nearly impossible to undo.
Another type of Bitcoin ATM scam is more complex and sinister.

Scammers often target job seekers and offer them a trial run. The experiment tells scammers to send money to a person's bank account, then withdraw the money to them and convert the funds at a bitcoin ATM to bitcoin, then transfer the cryptocurrency to the scammer's address.

However, after a few days, the money sent to the victim's account is canceled because it came from a stolen account. This leaves the victim's account with a negative balance. (Here's the story of a Reddit poster who got scammed like this for money.)

All in all, if you want to buy decent amounts of bitcoin relatively privately and don't mind paying particularly high fees, then a bitcoin ATM might be a good choice for you - provided there are machines in your area. , Certainly. Otherwise, using an exchange or buying bitcoins are also good options, possibly through the apps available on your smartphone.