What is a Bitcoin ATM, and does it actually function as an ATM? The short answer is yes.
Technically, these aren’t traditional ATM’s (Automatic Teller Machines) as they do not allow physical withdrawals of BTC from an account you own. Instead, these machines will enable you to purchase Bitcoin, depending on the specific machine. There are a number of machine types around from various companies, the top 3 being: General Bytes, Genesis Coin, and Lamassu.
How A Bitcoin ATM Usually Works
- You verify your identity through an one-time-password sent to your mobile or email. Again, this varies from machine to machine.
- You decide if you want to buy or sell BTC (if you have the option).
- To buy, you must choose the amount you want to in terms of BTC or your target fiat currency.
- You then deposit the fiat currency into the machine.
- Several things may happen depending on the machine:
- A QR code may appear on the screen for you to scan
- A QR code may be printed off corresponding to your new BTC wallet.
- The machine will ask and scan the QR code of your pre-existing wallet.
- You input your email address to have a QR code sent to you.
To sell, you must send the appropriate amount of BTC to the address displayed on the screen. Once the transaction is confirmed, you will receive the agreed fiat sum. How long this takes depends on the machine.
Bitcoin ATM’s v.s Crypto Exchanges
Bitcoin ATM’s are connected to exchanges. When using one, you are essentially buying or selling your chosen coin on an exchange. However, you’re interacting with a physical machine in a specific location rather than online. The price difference between using an online exchange and an ATM is generally around 5-10%. This means that ATMs cost 5-10% more to buy, and selling means you receive 5-10%.
Despite the premium that must be paid, many are attracted by these machines’ convenience and ease. They allow for a more visual and straightforward financial transaction that most are already familiar with. In addition, machines do not require any confusing registration processes or the need to learn about online trading interfaces.
When selling through an online exchange like Phemex, the platform’s spot markets offer more control over the price you are transacting with. You can also take advantage of limit orders and stop orders if you are not happy with current market prices. To read all about the different order types on spot exchanges, check out this article.