Bitcoin ATMs are a handy way of buying and selling Bitcoin (BTC) in person without dealing with actual people. A couple of years ago, there was only a handful of Bitcoin ATMs all over the globe, whereas now, the practice has become almost commonplace: there are more than 2,000 Bitcoin ATMs (BTMs) in Canada alone.
Bitcoin ATMs are a practical, though somewhat expensive, option for buying and cashing out cryptocurrencies. They’re maintained by independent BTM operators, who charge you for their services. Each BTM operator sets its own fee schedule, and you should expect to pay above-average fees for standard transaction operations like withdrawal and deposit, compared to trading on crypto exchanges.
In this article, we’ll explain how Bitcoin ATMs work and how you can deposit and withdraw money from BTMs.
What Is a Bitcoin ATM (BTMs)?
To put it simply, a cryptocurrency ATM is a way to deposit, withdraw and trade digital assets in person without ever meeting someone else. Bitcoin ATMs allow you to deposit or withdraw your assets and cash out in a few minutes, though some ATMs may not be equipped to do both.
There are more than 38,000 Bitcoin ATMs in the world, and over 30,000 of those are located in North America. They are run by different operators that set deposit, trade and withdrawal conditions and terms for each ATM.
Bitcoin ATMs were seen as an expensive but surefire way of buying and selling Bitcoin anonymously when they first came onto the scene. However, this isn’t the case for all crypto BTMs now, as many operators require some proof of ID before completing your transactions as a precaution against money laundering and other scams.
The proof of ID requirements vary between operator companies, but most BTMs require you to submit at least your phone number. Others may require a photo ID, such as a driver’s license, depending on the crypto regulations in place.
If you’re looking for a way to buy BTC anonymously, check out the Bitcoin ATMs near you and see if they require identity verification before your purchase. The BTMs in Canada comply with Canadian KYC (Know Your Customer) and AML (Anti-Money Laundering) protocols and require identity verification for crypto transactions worth over $1,000.
How Do Bitcoin ATMs Work?
Cryptocurrency ATMs, including BTMs, resemble regular ATMs or ticket kiosks, but they work somewhat differently. Instead of depositing or withdrawing fiat money with a debit card, you use a QR code of your wallet address to complete your transactions.
Bitcoin ATMs charge handsomely for their service, and you should expect to pay %7-10% of your transaction in fees. The ATM fees might be hidden (included in the price without being advertised), so it’s a good idea to search your options for the best deal before you proceed with your transaction.
You should also keep in mind that not all BTMs or crypto ATMs let you deposit and withdraw cash. Some only allow you to purchase coins or transfer your funds to another crypto wallet. If you want to deposit and withdraw fiat money from a Bitcoin ATM, check out first if it’s a two-way operator that lets you do both.
You can check out Bitcoin ATM locations near you on Coinatmradar.com. They offer a Bitcoin machine map that filters all nearby kiosks according to whether you can buy or sell Bitcoin. You can also find the locations of different cryptocurrency ATMs, including Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH) and DASH, on-site.
How to Buy Bitcoin Using a BTM
Buying Bitcoin with a BTM is pretty simple, though the exact process may change a bit depending on the ATM you’re using. These Bitcoin machines may use slightly different software/hardware, and the vocabulary might change a little depending on the operator.
That said, buying Bitcoin from a BTM is generally quite straightforward and includes four steps: Identity verification, submitting the deposit address, inserting cash and completing the transaction.
Aside from cash, you will need your phone, a government-issued photo ID and a Bitcoin wallet address QR code. There are many Bitcoin wallet apps you can use to generate a wallet address, or you can create a paper wallet.
Here is a step-by-step guide on how to buy BTC on a Bitcoin ATM with fiat money:
- Click Buy Bitcoin on the BTM screen.
- Scan the QR code of your Bitcoin wallet address. Your BTC will be sent to the wallet address once your purchase is complete. (Some ATMs let you generate a wallet address on the spot, but it’s a good idea to have it ready beforehand for security purposes).
- If prompted, provide identity verification.
- Enter the amount of Bitcoin you want to purchase.
- Insert cash into the deposit slot.
- Click “send” or “finish.”
- You’ll receive a receipt for your transaction. It might take 10 to 15 minutes for your funds to arrive in your account.
How to Sell Bitcoin Using a BTM
Selling Bitcoin with a BTM isn’t the most profitable way to cash out your Bitcoin, as BTM operators charge far higher fees than regular cryptocurrency exchanges. You might get better rates on an exchange platform or a peer-to-peer marketplace, though in that case, you’ll have to receive the money in your bank account before you can receive cash.
In a way, BTM’s let you skip a step, so you can directly withdraw cash, but the convenience comes at a price. Remember that you can’t cash out large amounts of Bitcoin on Bitcoin ATMs. ATMs enforce strict daily limits ($1,000- $10,000) on withdrawals, so if you’re looking to withdraw a large number of digital assets, it’s best to check out other options.
It can be a good idea to check out BTMs near you to see their daily withdrawal limits. You don’t want to visit several Bitcoin ATMs, as you’ll have to pay huge fees for each transaction.
Here is a step-by-step guide on how to sell BTC on a Bitcoin ATM for fiat money:
- Select Withdraw Cash on the screen.
- Complete identity verification if prompted.
- Provide your mobile phone number. You’ll receive a verification code in a text message. Enter the confirmation code to proceed.
- Enter the amount you want to withdraw.
- Send BTC to the wallet address provided to you by the ATM. Some ATMs print out a receipt with a QR code for the deposit address.
- Once your deposit is complete, you can complete the withdrawal and receive cash.
A Few Words Before You Leave…
Bitcoin ATMs used to be a popular way of buying and selling bitcoins anonymously. While this is no longer the case (with more countries start regulating crypto purchases and trades), the popularity of crypto ATMs continues to increase as crypto becomes more mainstream.
Perhaps the simplicity of buying and selling on crypto ATMs and their similarity to traditional ATMs may be enough to explain their popularity. However, it’s an expensive way to purchase or sell crypto, as Bitcoin ATM operators charge high fees for their service.
If you want to withdraw your BTC anonymously, you can check out our list of the best Best Anonymous Crypto Exchanges in Canada. And if you’ve tried BTMs and found the fee schedule too expensive for your taste, you might also want to take a look at our article on the Best Crypto Exchanges With Low Fees.