How Do Bitcoin ATMs Work?
A Bitcoin ATM, as the name implies, is similar to a regular ATM — except that it transacts in Bitcoin.
In short, it is an electronic machine, installed in a physical location, that facilitates the exchange of cash for cryptocurrency.
Usually set up as a small kiosk with a screen interface, a Bitcoin ATM offers a convenient way to transact Bitcoin (BTC). Using one is similar to using a traditional ATM machine to access a bank account.
Not all Bitcoin ATMs are alike: some models allow you to convert your Bitcoin into fiat currency in order to withdraw cash, while others allow you to insert cash to buy Bitcoin.
In all cases, Bitcoin-fiat exchange rates rely on the current market rate for Bitcoin (BTC), but with an added commission (ATM fees) charged by the ATM operator — on average, 8.4%.
In rarer cases, Bitcoin ATMs (with or without ATM fees) may also support Bitcoin or other cryptocurrency debit cards for cash withdrawals. However, Bitcoin ATMs generally only accept cash as a means of payment to purchase Bitcoin — not credit cards or other plastic.
How to Use a Bitcoin ATM to Buy or Sell Bitcoin: A Step-by-Step Guide
- How to use a Bitcoin ATM to buy Bitcoin requires you to scan the QR code of your Bitcoin wallet using the ATM’s scanner. This gives the machine information about your Bitcoin address or other cryptocurrency wallet address.
- Some machines will require you to enter your phone number to receive a verification code, and/or to show an official ID to comply with KYC and AML rules.
- You will need to type in the amount of BTC you wish to buy: in some cases, a machine will give you a printed receipt for you to double check before proceeding to the actual transaction. Once that’s done, you insert cash bills and wait for the transaction to be confirmed on the blockchain.
- Selling Bitcoin using a Bitcoin ATM usually requires you to send your Bitcoin to a wallet address given by the Bitcoin ATM through a QR code. For Bitcoin sales, you will either receive your cash immediately or have to wait for a redeem code while the transaction is confirmed on the blockchain.
Three Popular Bitcoin ATM Producers
Repackaging a time-tested device for the 21st century has inspired several branded nicknames, like Lamassu’s “cryptomats” or the “BTM” (Bitcoin Teller Machine) from Bitaccess.
But a catchy name alone doesn’t appear to be enough to take the lion’s share of the market: Genesis Coin is currently the world’s leading Bitcoin ATM producer, capturing almost 35% of the global market share.
The next most successful manufacturer is General Bytes, with a close to 30% share, while Bitaccess, Coinsource and Lamassu trail follow with a 5-10% share each.
Coinatmradar is a useful resource specializing in Bitcoin ATMS, which also provides a handy Bitcoin ATM Map detailing ATM locations worldwide. The United States currently has the highest number globally, accounting for almost 75% of all installed machines.