An Introduction To Cryptocurrency ATMs
Most of us are familiar with cryptocurrencies now. They are digital currencies such as bitcoin, ethereum, and monero. Cryptocurrencies are not hard currencies such as dollar bills or pennies. They are instead stored on a digital wallet.
So how do you buy or sell a cryptocurrency such as bitcoin? Most transactions occur at bitcoin exchanges or through in-person cryptocurrency traders. Recently, a new way of purchasing and even selling cryptocurrencies has appeared. This new method is through the cryptocurrency ATM.
Cryptocurrency ATMs look and function a lot like your regular cash ATMs found at banks. Most cryptocurrency ATMs only allow users to buy cryptocurrencies. A few do have the option to sell cryptocurrencies and pay with cash.
There were almost 3,500 cryptocurrency ATMs worldwide as of 2018. That number is only expected to grow. About 1,300 ATMs were added in 2018. The current rate of cryptocurrency ATM installation worldwide is about 6.5 new ATMs popping up daily.
More than half of the cryptocurrency ATMs in the world are found in North America. Seventy-one different countries have at least one cryptocurrency ATM, though. The number of nations with cryptocurrency ATMs is only expected to grow.
How Do You Use A Cryptocurrency ATM?
Most cryptocurrency ATMs out there right now are one-way ATMs. This means that they only sell cryptocurrencies for purchase. Some two-way ATMs do exist. These allow people to both buy and sell cryptocurrencies.
Buying cryptocurrencies through a cryptocurrency ATM is very simple, and provides a local bitcoin purchasing option. You will need a digital wallet. Next, choose the amount of cryptocurrency you want to buy and then select a method of payment. You can pay using cash or a card. That is it. Payment to your digital wallet should occur after the transaction is approved through blockchain technology. A scan of ID and contact information might be required at ATMs if a user buys a large number of cryptocurrencies.
Selling at a cryptocurrency ATM works in much the same fashion with some twists. A smartphone that can scan QR codes of your digital wallet will most likely be required. This is so the ATM can confirm that you have cryptocurrency in your digital wallet. You may also have to provide identification and a phone number. After you go through these hurdles, you should be able to get a price and payment in cash through the ATM for your cryptocurrencies.
Using cryptocurrency ATMs come with substantial fees for the convenience as well as anonymity. Expect to pay an almost 10% additional ATM fee on the value of the cryptocurrencies you buy from the machine. This means that if you purchased $1,000 worth of cryptocurrencies, you would probably end up paying close to $100 in ATM fees. Selling fees are slightly lower but still substantial. Expect to pay an 8% selling fee on the value of the sale.
An example of a cryptocurrency ATM company is CoinFlip. This company actually has two-way ATMs, which let people both buy and sell their cryptocurrencies through the convenience of ATMs. CoinFlip currently has about 120 and growing ATMs in the United States. They deal in six different cryptocurrencies, including bitcoin.
Daniel Polotsky is the CEO of CoinFlip and says that running a cryptocurrency ATM business is not as easy as it may seem. Many of the ATMs that buy currencies often have problems with cash flow. This means that they run out of money when people try to sell their cryptocurrencies at CoinFlip ATMs. Regulations are constantly changing around cryptocurrencies, and that too poses a challenge.