The rising popularity of cryptocurrency has paved the way for many advancements in the crypto market. Developers are looking for every possible way to integrate innovations into the crypto platform, and one such innovation is crypto ATMs. Though the first crypto ATM was launched in 2013, it became popular in recent years.
This crypto ATM guide includes information on their operation, features, limitations, etc.
Table of Content
- What are Crypto ATMs?
- Components of a crypto ATM
- Some Facts About Crypto ATMs
- Advantages of Crypto ATMs
- How Crypto ATM Work?
- Where and How to Find a Crypto ATM?
- How to Buy a Cryptocurrency Using a Crypto ATM?
- How to Sell a Cryptocurrency Using a Crypto ATM?
- Limitations of Crypto ATMs
What are Crypto ATMs?
Crypto ATMs (automatic teller machines) are stand-alone electronic devices that enable customers to buy and sell cryptocurrencies in exchange for cash, debit cards, or crypto wallet. Unlike traditional automatic teller machines that allow the transfer of fiat currencies and perform various other functions, most crypto ATMs perform one-way operations, where customers can purchase digital currency by entering fiat currency into the machine. However, some recent models support buying of fiat currency against crypto coins.
Components of a crypto ATM
- Bill acceptor
- QR scanner
- Dispenser
- Touch screen display
Advantages of Crypto ATMs
- Easy access: Crypto ATMs allow customers to buy and sell cryptocurrencies on the go. These ATMs are located in major cities and towns, giving people access to quick transactions of crypto without the need for an internet connection.
- 24×7 service: Crypto ATMs operate 24×7. People can depend on crypto ATMs for the transfer of crypto at any time, without waiting for regular banking hours.
- Privacy: Online transaction requires access to personal data, and are more prone to hacks and scams. Crypto ATMs provide strong security and privacy for crypto transactions.
How Crypto ATM Work?
Crypto ATMs are controlled and monitored by independent business firms and authorities, which means they are not decentralized. These ATMs are connected to a crypto exchange from which the crypto is transferred to the user, a user can enter the cash or debit card into the ATM and receive the cryptocurrency against the money he entered.
Crypto transactions are moved directly to a digital wallet and the transaction details are stored virtually in the blockchain, which means no bank account is involved. The exchange rate will fluctuate depending on the market value of the cryptocurrency during the time of the transaction.
A user can choose the crypto exchange option from the display screen. Once the mobile number is entered in the prompted section, an SMS with a two-factor authentication code is received. Entering the code in the displayed section navigates to use a QR code to scan the destination for the wallet. A user can choose a destination of his choice. Finally, enter the cash into the machine and receive crypto coins against the money in your wallet.
Some Facts About Crypto ATMs
- Crypto ATMs eliminate the cumbersome registration formalities and long waiting periods.
- The limit of crypto ATM transactions is generally between $20 and $25,000 each day. However, it can vary depending on location and operator.
- A KYC (Know Your Customer) verification is mandatory for a single transaction above $900, and not required for transactions below $900.
- Large transactions require the submission of multiple documents including ID and documents indicating the source of wealth.
- All Crypto ATM transactions are not devoid of fees, some charge a fixed fee along with a percentage of the transacted amount.
- Zero-commission crypto ATMs are rising in the industry offering a more efficient choice for users.
Where and How to Find a Crypto ATM?
Crypto ATMs are located all over the world, offering different services and functionalities. In the United States, there are more than 36,000 crypto ATMs available. Generally, crypto ATMs are located in retail stores, gas stations, airports, supermarkets, etc.
A crypto ATM can be tracked using search engines and apps. Coin ATM Radar is one of the most used apps to locate Crypto ATMs. ‘Bitcoin ATM near me’ and ‘Buy Bitcoin near me’ are the most used search engines. Different websites also list Crypto ATMs with their detailed addresses, making it easy for users to locate one.
How to Buy a Cryptocurrency Using a Crypto ATM?
Buying a cryptocurrency from a crypto ATM is easy, every platform operates similarly. A user must have a crypto wallet for making ATM transactions.
Step 1: Complete the verification process
- A user has to fill in the mobile number and scan the ID to complete the verification.
- Once the mobile number is entered, a 2FA code is generated through SMS.
- Fill the 2FA in the destined column to verify the mobile number belongs to you.
Step 2: Provide the wallet address
- Once the verification process is completed, open the wallet app on the mobile phone.
- Scan the QR code of your wallet address using the ATM’s scanner.
- Choose the cryptocurrency you intend to buy from the list displayed on the screen.
Step 3: Enter purchase information
- Choose ‘buy’ on the display screen.
- Choose the cryptocurrency you intend to purchase.
- Enter the amount of cryptocurrency you want to buy.
- Insert the fiat currency against which you want to buy the crypto into the machine.
Step 4: Verify and process the transaction
- Review the transaction details.
- Once the transaction is verified, process the transaction.
- The cryptocurrency gets transferred into your wallet.
How to Sell a Cryptocurrency Using a Crypto ATM?
Selling a cryptocurrency using a crypto ATM is as simple as buying them. A user must own a crypto wallet to proceed with the transactions.
Step 1: Complete the verification process
- Enter the mobile number in the designated column.
- A 2FA code is generated through SMS, type in the code in the prompted space.
Step 2: Enter the purchase information
- Choose ‘sell’ on the display screen.
- Choose the cryptocurrency you want to sell.
- Enter the amount of cryptocurrency you intend to sell.
Step 4: Send cryptocurrency
- Using the digital wallet scan the QR code and send the bitcoin to the destined address.
- The crypto ATM generates the cash against the cryptocurrency you sold.
Limitations of Crypto ATMs
Crypto ATMs pose many advantages, but this doesn’t mean that they are free of limitations. These ATMs have numerous limitations.
- Limited crypto options: Crypto ATMs mostly allow the transactions of Bitcoins, and some ATMs allow numerous other cryptocurrencies. The lack of a wide list to choose from limits users from making transactions using crypto ATMs.
- Scams and hacks: Though crypto ATMs are secure and private, they are prone to hacks and scams. Many cases of con artists tricking people into retrieving money have been reported in the US and other countries.
- Lack of regulatory guidelines: Since cryptocurrencies are decentralized, the government hardly has authority over crypto ATMs and their transactions. It can be challenging to get government support in cases of fraud.
Final Thoughts
Crypto ATMs are similar to conventional ATMs but they allow transfer of cryptocurrencies. The larger availability of crypto ATMs and the strong privacy offered attract people to use these ATMs for crypto transactions. However, the limited availability of crypto variants makes people choose crypto exchanges.