Marc Serafino
Simply put, a Bitcoin ATM allows you to buy and sell Bitcoins for cash. It’s that simple, but it’s not really the best way to do that, though you may find yourself in situations when that’s the only or the easiest way to sell your bitcoins — you don’t really want to buy them through this sort of an ATM.
Here are 5 things you should know about Bitcoin ATMs:
1. Bitcoin ATMs are expensive
The convenience of using a Bitcoin ATM comes with a price tag. And it could be a hefty one, though that depends on the amount of bitcoins you want to buy or sell.
Generally speaking, fees are in the range of 5% and quoted prices are taken from large exchanges on a live basis.
There is an obvious reason for this — a physical machine and its placement in a store (or wherever it happens to be) costs real money. And the company behind that ATM needs to make some cash, so they are charging a premium for the convenience you’re getting.
2. You can’t be anonymous
Regulations in most countries require that users are verified with the system, so if you thought you could get cash for your Bitcoins anonymously from this sort of an ATM — forget about it. Since Bitcoin ATMs are essentially money transmitting tools, they fall under FinCEN rulings and have to comply with Know Your Client and Anti Money Laundering procedures.
This applies to most (if not all) countries, so chances are you will have to identify yourself in order to make transactions with a Bitcoin ATM. What’s more, most of these machines require you to scan your identification before letting you buy or sell bitcoins.
3. Most Bitcoin ATMs use QR codes
If you want to buy bitcoins, a Bitcoin ATM will first ask for the cash and then generate a QR code that contains the private key with the address where your bitcoins (or satoshis) are located. This is basically what we would refer to as a “paper wallet” for bitcoins.
For those who don’t know, a QR code is a square of black and white pixels that can be scanned by a smartphone or some other smart device.
4. Bitcoin ATMs will get more users on board
Although the initial users of Bitcoin have been tech-savvy individuals, it will be the physical machines that will help the mainstream consumer adopt and start using Bitcoin and other cryptocurrencies.
The fact that you can touch something makes all the difference; suddenly Bitcoin isn’t just another virtual commodity a few users can benefit from — rather, it is the real holder of value that has a practical use case in the “offline world.” It already has such use case — as you can buy physical stuff with bitcoins — but you get what I mean.
5. Bitcoin ATMs are great for travelers and the unbanked
One of the best use cases for Bitcoin ATMs is that they allow travelers to exchange their bitcoins for a local currency. Sure, some fee comes included with this transaction, but some fee would also be applied if you would use your credit card in a foreign country (though a lower one).
Another benefit of a Bitcoin ATM could be in developing countries where many people are considered underbank or even unbanked — as in they don’t have a readily available access to modern financial services people in developed world take for granted. In such places a Bitcoin ATM could serve as an entry point to the world of financial services, enabling users to easily send and receive money from all around the world, effectively helping them get their slice of the global economy.
Conclusion
The number of Bitcoin ATMs is growing with the day, and chances are that trend will continue. Even some of the major companies, like Swiss national railroad company is allowing its customers to trade bitcoins on their ticket machines, which effectively makes them [the ticket machines] Bitcoin ATMs. We expect this trend to continue with cryptocurrencies steadily moving into the mainstream market.
Speaking of which, as with any emerging market — the sooner you enter, the more you get to benefit. So what are you waiting for?
