Crypto ATM – Investopedia
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 as well. 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 with a user’s digital wallet to process the transaction and send crypto to the customer. There are tens of thousands of crypto ATMs around the world, with a majority of them located in the U.S.
Crypto ATMs connect to a cryptocurrency exchange, and convert deposited cash 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 (typically via a QR code), depositing cash, and transferring the purchased cryptocurrency directly to the digital wallet.
Some crypto ATMs use a crypto exchange app that allows the redemption of a voucher purchased for cash. This allows users to deposit funds, select which crypto to purchase, and then print a voucher that 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, meaning crypto can be purchased, 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 QR code, choose how much crypto to sell, and receive cash from the ATM after the transaction is processed.
Crypto ATMs are distributed throughout the world, but the majority of them are found in the U.S. There are several apps that track the location of crypto ATMs, with Coin ATM Radar being the most thorough.
There are more than 34,000 crypto ATMs in the U.S. alone, with thousands also available in Canada. There are dozens of crypto ATM providers, with different services and features available on each.
Crypto ATMs are typically located in public shopping centers, gas stations, and airports, similar to traditional banking ATMs.
Crypto ATMs are a great way to quickly exchange cash for crypto, but there are a few risks involved:
Crypto ATMs charge high fees, with some charging over 10% per transaction. Compare this 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 custody 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 secure way to protect your crypto holdings, but there is no insurance against theft or loss.
As with most crypto exchanges, there usually will be minimum and maximum transaction limits set by the ATM company. Transaction minimums and maximums are generally in the range of $10-$10,000.
Crypto ATMs are limited in their number and locations, and may require traveling a long distance to access.
Using a crypto ATM requires a mobile phone, phone number, a picture (optional), and access to a digital wallet. While each crypto ATM provider has its own process, here are the common steps required to use a crypto ATM:
Some crypto ATMs offer a printed voucher to redeem later, while others simply deposit funds into your wallet. Others may require downloading a specific application to use the ATM. Always read the on-screen instructions carefully before making any purchases at a crypto ATM.
Crypto ATMs are inherently secure, as they process transactions using blockchain technology. The funds are transferred to the digital wallet selected, and are recorded and verified on the blockchain, which is a public ledger that is immutable and cryptographically secured. And to protect users from fraud, many crypto ATMs follow Know Your Customer (KYC) best practices for identity verification, requiring the scanning of a photo ID and inputting a tax identification number. That being said, crypto ATMs can be vulnerable to phishing scams and other attacks, so it is important to protect your cryptocurrency by never sharing the private keys to your digital wallet.
Crypto ATMs are notorious for charging high fees for transactions. These fees may include a crypto exchange fee, cash exchange fee, or a card processing fee (if using a debit card). Transaction fees can be as high as 20% (or more), depending on the ATM and transaction being processed. According to research by CoinATMRadar, crypto ATM fees average around 15% per transaction, which is very high. Fees vary by ATM, and can be as low as 2% to 4%, but most are much higher.
Crypto ATMs do not connect to your bank account like a traditional ATM, they instead connect with a user’s digital wallet to process the transaction and send crypto to the customer.
How Many Bitcoin ATMs. ''There Are Currently 50,544 Bitcoin ATMs in the U.S.''
Coin ATM Radar. "Bitcoin ATM Map."
Coin ATM Radar. "Buy Fee Size at Bitcoin ATMs."
Robinhood. "Get More Crypto for Your Cash."
Policy Advice. "Crypto Insurance: What Is Crypto Insurance, and How Does It Work?"
BitIRA. "What Are Crypto ATMs?"
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