What is a Crypto ATM?
Crypto Automated Teller Machines (ATMs) are stand-alone electronic kiosks that allow users to buy and sell cryptocurrency in exchange for cash or with a debit card. All crypto ATMs sell Bitcoin, while some also offer other cryptocurrencies. Not all crypto ATMs allow the sale of crypto, as some are limited to purchases only.
Crypto ATMs do not connect to your bank account like a traditional ATM, but rather connect to a user’s digital wallet to process the transaction and send the crypto to the customer. There are tens of thousands of crypto ATMs around the world, the majority of which are located in the United States.
Key points to remember
- Crypto vending machines allow users to buy and sell crypto for cash.
- Bitcoin and other cryptocurrencies are offered by crypto ATMs.
- Crypto ATMs may not require ID verification to purchase.
How Do Crypto ATMs Work?
Crypto ATMs connect to a cryptocurrency exchange and convert deposited money into crypto. Transactions are processed on the blockchain, which is a digital ledger of financial transactions for cryptocurrency. Using a crypto ATM involves connecting a user’s digital wallet (usually via a QR code), depositing money, and transferring purchased cryptocurrency directly to the digital wallet.
Some crypto ATMs use a crypto exchange application that allows the exchange of a purchased voucher for cash. This allows users to deposit funds, select crypto to buy, then print a voucher which can be scanned with a mobile app to redeem the voucher and deposit funds directly into a user wallet.
Most crypto ATMs only offer one-way transactions, which means crypto can be bought, but not sold. Some crypto ATMs offer two-way transactions, allowing users to buy and sell crypto in exchange for cash. Selling crypto is a similar process to buying: a user will scan their digital wallet’s QR code, choose the amount of crypto to sell, and receive cash from the ATM after the transaction is processed.
Where to find a Crypto ATM
Crypto ATMs are distributed worldwide, but the majority of them are in the United States. There are several apps that track the location of crypto ATMs, Coin ATM Radar being the most comprehensive.
There are over 34,000 crypto ATMs in the United States alone, and there are thousands available in Canada as well. There are dozens of crypto ATM providers, with different services and features available on each.
Crypto ATMs are usually located in public malls, gas stations, and airports, just like traditional bank ATMs.
Crypto ATM Risks
Crypto ATMs are a great way to quickly exchange cash for crypto, but they come with a few risks:
Crypto ATMs charge high fees, with some charging upwards of 10% per transaction. Compare that with the fees of a traditional cryptocurrency exchange (1% to 4%), and users will pay more to use a crypto ATM.
While some crypto exchanges offer custodial services for crypto funds that come with anti-theft insurance, crypto ATMs require you to deposit funds into your own digital wallet. Self-custody can be a safe way to protect your crypto holdings, but there is no insurance against theft or loss.
As with most crypto exchanges, there will usually be minimum and maximum transaction limits set by the ATM company. Minimum and maximum trades are usually between $10 and $10,000.
Crypto ATMs are limited in number and locations, and may require traveling a long distance to access them.
How to Use a Crypto ATM
Using a crypto ATM requires a cell phone, phone number, photo (optional), and access to a digital wallet. Although each crypto-GAB vendor has their own process, here are the common steps required to use a crypto-GAB:
- Sign up for a digital wallet. Crypto ATMs connect to your digital wallet to facilitate the transaction, so you will need to create one to buy crypto. There are many popular online wallets, and some crypto ATMs even offer their own wallet software.
- Find a Crypto ATM. Using a service like CoinATMRadar or a simple Google search can help you locate a crypto ATM near you.
- Verify Your Identity. Most encrypted ATMs will need a phone number (at a minimum) to verify your identity, but some may require additional verification, such as scanning photo ID or entering your phone number. social Security.
- Scan your wallet. To buy Bitcoin or another cryptocurrency, you will need to scan your wallet address. Most digital wallets have the option of displaying a QR code, which can be scanned into the crypto ATM.
- Make a purchase. Select the crypto you want to buy, choose the amount to pay and complete the transaction. You will need to deposit money or pay with another accepted payment method.
- Wait for the transaction to complete. Transactions take place on the blockchain and can take some time to process. Once the funds have been deposited into your wallet and confirmed, the transaction is complete. You can also get a receipt from the crypto ATM for the transaction.
Some crypto ATMs offer a printed voucher to redeem later, while others simply deposit funds into your wallet. Others may require downloading a specific app to use the ATM. Always read the on-screen instructions carefully before making purchases at a crypto ATM.
Are Crypto ATMs Safe?
Crypto ATMs are inherently secure, as they process transactions using blockchain technology. Funds are transferred to the selected digital wallet, and are recorded and verified on the blockchain, which is an immutable, cryptographically secured public ledger. And to protect users from fraud, many crypto ATMs follow Know Your Customer (KYC) best practices for identity verification, requiring scanning photo ID and entering a number. tax ID. That being said, crypto ATMs can be vulnerable to phishing scams and other attacks, so it’s important to protect your cryptocurrency by never sharing your digital wallet’s private keys.
What are Crypto ATM fees?
Crypto ATMs are notorious for charging high fees for transactions. These fees may include crypto exchange fees, cash exchange fees, or card processing fees (if using a debit card). Transaction fees can reach 20% (or more), depending on the ATM and the transaction being processed. According to research by CoinATMRadar, crypto ATM fees average around 15% per transaction, which is very high. Fees vary between ATMs and can be as low as 2% to 4%, but most are much higher.
How Do Crypto ATMs Execute Transactions?
Crypto ATMs do not connect to your bank account like a traditional ATM, rather they connect to a user’s digital wallet to process the transaction and send the crypto to the customer.