There are currently 21 989 Crypto ATM’s Worldwide, and as per Coin ATM Radar, every single one of them provides support for Bitcoin, which is hardly surprising. The amount of crypto ATM installations worldwide is trending up in a big way, as can be seen on the charts below.
This article will focus on BTM’s, Bitcoin Teller machines. BTM’s are connected, automated Crypto ATM machines that provide support for Bitcoin only. These machines allow users to purchase and sell Bitcoin. BTM’s come in two flavors: one way (buy only) and two ways (buy and sell).
BTM’s have experienced a surge in popularity
BTM’s have experienced a surge of popularity in recent years, for a number of reasons.
Bitcoin represents a paradigm change, in terms of Trust. The Bitcoin Network’s explosive growth and the sheer amount of BTM installations across the globe simply mean that more and more individuals choose to Trust Code instead of centralized entities such as banks and governments. Trust has been displaced, towards the Algorithm that allows nodes to create Trust in a Trustless environment. A growing number of individuals today would rather not deal with banks. They would rather use BTM’s in order to conduct transactions including but not limited to cross-border transfers and bill payments.
For privacy aware users, BTM’s are an attractive proposition. While BTM’s do not provide anonymity (the premisses in which BTM’s are located have cameras and the BTM’s themselves are equipped with cameras that will link your physical appearance to your public address), transactions with BTM’s have low to inexistent KYC (Know Your Customer) and AML (Anti Money-laundering) requirements.
BTM’s are also popular among the unbanked, individuals who for some reason do not or cannot be provided with a bank account. The Displaced, for example, who flee war zones or unstable political situations in their home countries, sometimes do not have the paperwork required for them to obtain a bank account, and therefore Bitcoin becomes an attractive proposition, as it allows them to conduct transactions without the identification requirements that financial institutions usually impose on their customers.
How to use a BTM
But how do these BTM’s work exactly? Is it complicated? How are users able to purchase and sell bitcoin by using these automated devices, which can be found in malls, restaurants and convenience stores around the world?
Let us find out!
First thing first: you will need a Bitcoin wallet in order to conduct transactions with a BTM. There is a wide variety of Bitcoin wallets available on markets such as Google Play. Pick a wallet and download it on your phone, in order to be able to receive the Bitcoins you want to purchase, or Scan the QR Codes Generated by the BTM.
Once you have downloaded a Bitcoin wallet on your phone, you will need to find a BTM. For this purpose, a website such as Coin ATM Radar is extremely useful. While you could use Google Maps to determine the location of the nearest ATM, a site such as this one will allow you to fine tune your search to find the BTM that best fits your needs. Coin ATM Radar provides information such as fees, verification procedures and online status, which can come in very handy.
You might be looking for a two-way BTM (buy and sell). Google Maps will not provide this information and you might end up disappointed if you turn up at a location that only allows you to buy Bitcoins!
Purchasing Bitcoin with a BTM is a very simple and straightforward process. While BTM User interfaces are not all the same, they bear enough similarities that the purchasing process in 7 points that you see below can be applied to all of them:
On the BTM Interface, click “Buy Bitcoin”
Use the BTM’s scanner and scan the QR code of your Bitcoin wallet address. Some BTM’s provide the option to enter your Bitcoin address manually - which is not something we recommend due to the length of Bitcoin addresses and the potential for human error!
Input the amount of Bitcoin you wish to purchase.
Insert fiat currency into the Bitcoin Teller Machine to cover the cost of your purchase.
Wait for the BTM to process your transaction.
Click on Finish.
Collect your receipt, which can be either printed or sent to your email address or texted to you, depending on the BTM model you are using.
After the transaction has been completed, you should check your Bitcoin Wallet, to make sure you have received the BTC you just purchased. Receiving your BTC might take 10 minutes to an hour to - fingers crossed, we hope this never happens to you - days, depending on network congestion and the mempool situation.
To ensure that your transaction is swiftly included in the next block, BTM operators should attach a “priority fee”, as miners will prioritize transactions with higher fees. When it comes to transactions, most of the delay is due to the fact that fees were not sufficient.
As you can see, purchasing Bitcoin using a BTM is not rocket science!
If a user experiences any problems during the purchasing process, they can usually contact the Bitcoin ATM network’s customer service department. The responsiveness of customer service when treating customer requests or complaints is of utmost importance.
The Selling process, which we detail below, is also very simple:
On the BTM user interface, click “Withdraw Cash”
Input the amount of BTC you wish to sell.
Scan the QR code generated by the BTM and send the exact amount of BTC shown on screen. Do not send less or more than the amount indicated, as this usually results in problems!
Wait for the Transaction to be processed.
You will be able to withdraw cash as soon as your transaction is processed. This can take a few minutes, as your transaction will need to be confirmed first.
BTM’s are extremely convenient, however savvy users should be aware of their pain points before using them:
The transaction fees can be rather high! Certain BTM operators pass on the cost of maintenance and rent to the users. Typically, BTM’s charge 7 to 12% for buying and selling, however, as you can see below, fees can be much higher than this.
BTM’s are not suitable for large transactions. Most BTM’s have deposit and withdrawal limits between 1000 and 10 000 dollars, to prevent money laundering.
The potential unreliability of BTM Network operators and the lack of customer service after a stuck transaction is one of the main issues with BTM’s. It is something that happens more often than we would like. There is nothing more frustrating than a lack of customer service after experiencing a stuck transaction.
While using BTM’s to purchase and sell bitcoin is not rocket science, and is rather straightforward, using these machines comes with a set of warnings. One should follow provided instructions religiously, and the fees as well as the lack of customer service, which leaves customers hanging and fuming, can really spoil the experience. As the Bitcoin Network grows, the network of BTM’s will expand accordingly. The current challenge and opportunity for operators is to provide service in underserved areas.