Way back in 2009, when Bitcoin was first introduced to the digital market, excited investors often found themselves on the receiving end of ridicule and teasing. Shouts of “You’re buying thin air”, and “Why are you wasting your money on nonsense” could sometimes be heard, but over the years, this cryptocurrency has more than proven its worth, with Bitcoin being so in demand that the price has skyrocketed and early buyers have even found themselves being able to retire thanks to the value of the crypto. It’s become so popular that there are even ATMs dotted around to transact with Bitcoin, but what are they and how do they work?
What is a Bitcoin ATM?
Most banks will have ATMs set up to provide a quick and convenient way for their customers to access their accounts, withdraw money and check their balance. Bitcoin ATMs are different in the sense that instead of withdrawing, they provide the option to insert cash and have it exchanged into this form of cryptocurrency.
This can be done in a wide selection of locations, with options for multiple currencies to be exchanged, with USD being the most popular option.
As almost $11 billion Bitcoin is traded with in every 24 hour period, these ATMs have made it easier to take part in peer to peer trades, as well as marketplace exchanges.
How can these machines be used?
With a Bitcoin ATM, everything is digitized, meaning that once the cash has been inserted, the steps that follow are straightforward whilst ensuring safety and security. In most cases, the cash will need to be applied first and then the user will have the option to log in using their Wallet ID, or a QR code directly from their smartphone.
Depending on the currency being transacted with, the current market’s exchange rate will be displayed, for example as 1 USD to BTC and the trader can choose to accept, or receive their cash back. The process was intentionally designed to be streamlined so as to avoid any potential drops in Bitcoin value from hour to hour.
Why might a Bitcoin ATM be used?
There are a number of reasons why people may choose to use an ATM for Bitcoin – from topping up their wallet ready for a trade, right through to taking advantage of a sudden reduction in crypto value.
The option can be ideal for both long-term and short-term traders, too, as once deposited, the cash exchanged will immediately transfer into BTC, allowing the sum to be stored, or traded away as soon as required, and without any delay.
What is needed to use a Bitcoin ATM?
With more than 63,000 Bitcoin ATMs throughout the United States alone, traders will find at least one accessible within convenience stores, malls and other locations.
In order to use the machine, the trader will first need cash, and access to their Bitcoin wallet ID.
The machine has a small slot for paper cash to be inserted, and this will need to be done one bill at a time. Each time a bill is approved, the machine will register the amount. Once the transaction is complete, a button on the touchscreen can be pressed and a new image will load providing details on the currency exchange rate as defined by the market at that time.
The ATM is maintained under strict supervision, allowing it to retrieve data securely from a global server, which in turn provides up-to-date currency values on the spot.
The Wallet ID can be added, or the QR code can be scanned by the built-in camera, or alternatively by tapping the sensor on compatible machines, and the user will then have the option to complete their transfer once the credentials have been accepted.
Are these machines safe to use?
Yes, in fact, they use some of the most advanced encryption software available, surpassing the technology of certain banks.
Human error is one of the leading contributors of issues arising, however, and these machines are not impervious to fraudulent activities, and so caution is always advised.
There is also a small fee to consider when using these ATMs, often between 13 and 15% of the total transaction value. For instance, when transferring $100 USD into Bitcoin, the machine’s software will retain anywhere between $13 and $15.
Other fees can apply, such as flat fees, or currency conversion fees – but this will all be detailed on the device itself.
In conclusion
Bitcoin ATMs provide a safe, secure way to access a Bitcoin wallet, review an account’s balance, or simply insert a cash currency and have it exchanged into BTC with minimal fuss. They are ideal for traders that don’t currently have access to an app, or want to take advantage of a decline in BTC value. Additionally, they are frequently maintained for peace of mind and some models even have options to make payments to other Wallet account holders, making them ideal for quick transactions on the go, or when Bitcoin is the preferred method of payment and a wallet needs to be topped up.
Featured image credit: Unsplash
