If you’ve decided to invest in Bitcoin, you’re now trying to figure out what’s the best way to stack “sats.”
While there are many ways to create a Bitcoin wallet, buy Bitcoin, and cash out Bitcoin, the best bet remains using a Bitcoin ATM. A Bitcoin ATM transaction is the easiest way to use Bitcoin.
But as Bitcoin ATMs are still rather new, many Bitcoin investors, old and new, still haven’t caught on. If you’re wondering how does a Bitcoin ATM work, then read on.
Here’s what you need to know on how to use a Bitcoin ATM:
Have You Seen My Bitcoin Wallet?
Perhaps what throws off many potential Bitcoiners is the very thing that makes Bitcoin attractive in the first place. Rather than having to store your money in a bank, your entire fortune is stored in a Bitcoin wallet which you carry with you at all times.
But Bitcoin wallets also have their flaws and can be rather intimidating for new investors. Before making our case for Bitcoin ATMs, we have to first look at how they compare to web wallets and hardware wallets.
Web Wallet
The web wallet is the easiest way to buy, sell, trade, and store your Bitcoin if you want to avoid any technical know-how.
You make an account on an online web exchange platform such as Coinbase. Then, using your credit card or bank account information, you convert your fiat currency to Bitcoin.
The web wallet stores your Bitcoin. Through the platform, you can conduct any Bitcoin transaction, such as selling or trading. You don’t have to stress about knowing your public key, recovery phrase, etc.
So, why isn’t the web wallet the best solution?
This is because a web wallet works in the same manner that a bank works. When you deposit your hard-earned money in a bank, it’s no longer your hard-earned money.
It’s hard-earned, sure, but the money now belongs to the bank. They can, due to government legislation, do certain things with the money without your express consent. After all, it’s not your money anymore. You are simply borrowing your own money when you withdraw cash from the ATM.
A web wallet is a cryptocurrency version of a bank. You’ll hear seasoned Bitcoiners state, “not your keys, not your coins.” This is because if you store your Bitcoin on such an exchange, you might one day lose it all.
Hardware Wallet
This is a superior version of a Bitcoin wallet and gives you complete control over your assets. Unlike a web wallet, you are solely responsible for your Bitcoin, but this also means that they can’t get confiscated as easily.
Hardware wallets are harder to track, which makes them better for protecting your Bitcoin from hackers or government overreach.
You’ll have to keep track of the following information when you buy a Bitcoin hardware wallet:
- Your Private Key (like a password)
- Your Public Key (like a username)
- Your Recovery Phrase (answers to ‘security questions’)
You’ll also have to never lose the physical device. If you do, and you don’t have the above information, then you’ve lost your Bitcoins forever.
While this sounds intimidating and bothersome, this is what makes it harder for others to steal your Bitcoin. It’s also what lets you have total ownership of your Bitcoin. You hold your coins rather than a “crypto bank” holding your Bitcoin.
So, with all the advantages of a hardware wallet, why should we bother with a Bitcoin ATM at all?
The Case for Bitcoin ATMs
While hardware wallets offer excellent protection from theft, they aren’t infallible. The smartest hackers can still find methods to steal your Bitcoin directly from your hardware wallet.
Bitcoin ATMs bring together the best advantages of both web wallets and hardware wallets without the disadvantages.
Here’s what they offer:
- Easy to purchase Bitcoin
- No need for technical know-how
- The wallet is easier to conceal
- Bitcoin ATMs are all over the world
- Can exchange for any fiat currency
- Privacy and anonymity
- Fast process for completing a transaction
You can look at this link to see where the best Bitcoin ATMs are in your area. You’ll soon find that they’re just as easy to use as a regular ATM and that they offer the best solution for buying and holding Bitcoin.
How Does a Bitcoin ATM Work?
Now let’s look at how you’ll work with a Bitcoin ATM. This is a generic set of guidelines, and there might be variations depending on the brand you choose. There might also be further requirements due to your area’s laws regarding Bitcoin.
Step 1
When you approach a Bitcoin ATM, you might have to first login to your account. In some areas, you’ll have to make an account online before you can use the Bitcoin ATM.
However, the best Bitcoin ATMs won’t have such stringent KYC requirements. This is what sets them apart from other forms of Bitcoin wallets.
Step 2
After you access the Bitcoin ATM, you’ll be prompted with a screen asking you how much Bitcoin you wish to purchase. Using the keypad, you’ll type in the number in SATS.
Step 3
After you confirm this amount, you’ll get told how much cash you’ll have to deposit to buy the amount. At this stage, you can go back to make edits if you wish.
Once you confirm, you’ll have a few seconds to deposit your cash into the Bitcoin ATM. You want to make sure you only deposit the local fiat currency and that you have clean and crisp bills.
Step 4
After you deposit the cash, you’ll have to confirm your purchase one more time. Once you do this, you wait a few seconds for your receipt to get printed. Once it prints, your transaction is complete.
How Your Paper Wallet Works
The “receipt” is actually your paper wallet. This paper wallet will contain information regarding how much Bitcoin you own. It’ll also display your public and private keys. You want to keep this paper wallet safe so that others can’t steal your Bitcoin.
Next time you want to add more Bitcoin, you can scan this paper wallet to the Bitcoin ATM. This adds to your existing wallet rather than creating a new one.
Sending Money Via a Bitcoin ATM
With a Bitcoin ATM, you can also send Bitcoin to another recipient. This can also be used if you need to make purchases with Bitcoin.
For this, you’ll have to first check if you have sufficient funds in your paper wallet. You’ll have to be logged in so that you can access your Bitcoin funds through the Bitcoin ATM.
When you log in to the Bitcoin ATM, you’ll see a button to send Bitcoin to another wallet. The wallet doesn’t have to be registered with the same Bitcoin ATM provider.
You’ll type in the user’s public key as well as how many sats you wish to send them. You follow the on-screen instructions and the Bitcoin will get sent within a few seconds.
The Bitcoin ATM will print out a receipt that confirms that the Bitcoin was sent. The recipient can use the same Bitcoin ATM to convert the amount received to cash if they wish.
This is much faster than using a hardware wallet and offers more privacy and lower transaction fees compared to a web wallet.
Frequently Asked Questions
Now let’s look at a few frequently asked questions and concerns you might have about buying Bitcoin and about using a Bitcoin ATM. Make sure you fully understand these before you decide to buy using a Bitcoin ATM.
Are My Transactions Anonymous?
All Bitcoin transactions will get recorded on the public ledger. However, they won’t get tied to your identity. Some Bitcoin ATMs will keep records of all transactions on your account.
This can, in some cases, get tied to your identity. However, most of the time your transactions will be anonymous.
Bitcoin ATMs offer greater privacy than other types of wallets. However, by law, they’ll always have to comply with the legislation of a particular jurisdiction.
If they have to collect your data and share it with the government, they’ll do it.
How Much Bitcoin Can I Buy?
The price of Bitcoin always fluctuates so the Bitcoin ATM puts limits on how much of a particular fiat currency you can use. As a general rule, you can spend between $1,000 to $3,000 on a particular transaction.
In some cases, this can go as high as 5-figures. However, company rules can always change, and they are often affected by local legislation. There might also be limits on the number of transactions you can complete within a 24-hour period.
How Long Will My Transaction Take?
Using a Bitcoin ATM will only take 30-60 seconds to complete your transaction. However, the blockchain will have to approve the transaction to send your Bitcoin to a wallet.
This can take a few more minutes, depending on how much Bitcoin is being used. At worst, it can take about 1 hour for a Bitcoin transaction to get completed. However, in most cases, one won’t have to wait more than 5-10 minutes to complete a transaction.
Can I Get “Robbed” at a Bitcoin ATM?
While a thief can steal your paper wallet, no one can break into a Bitcoin ATM to steal your or anyone else’s Bitcoin.
However, Bitcoin isn’t stored on a Bitcoin ATM. A hacker can’t break into a Bitcoin ATM to access anyone’s Bitcoin. You can always ensure that Bitcoin ATMs are kept in secure locations in safer neighborhoods.
As a result, you can prepare in advance when you want to buy Bitcoin. You can ensure that you’re kept safe when making a transaction with your Bitcoin ATM.
Best Practices With Using a Bitcoin ATM
Now let’s wrap up by looking at a few best practices that you should follow when using a Bitcoin ATM. As with anything related to cryptocurrency, you want to ensure that you take calculated risks, so you don’t run into issues.
Always speak to a financial advisor before using a Bitcoin ATM and ensure you know the legislation of your jurisdiction.
Research the Price First
While the price can always change, especially in a volatile market, make sure you research the Bitcoin cost first. This helps you prepare for how much cash you’ll have to withdraw before you go to the Bitcoin ATM. Remember, you’ll only be able to buy Bitcoin using cash and not a credit or debit card.
In most cases, your Bitcoin ATM will only accept one type of fiat currency. In the event that it allows multiple currencies, you should always use the stronger currency.
For example, if you’re in Serbia, you’ll benefit more from buying Bitcoin using Euros rather than Dinars.
Protect Your Privacy
As stated before, a great advantage of using a Bitcoin ATM is that you’ll get added privacy and security for your purchases. Nevertheless, in our age of growing surveillance, one must take extra precautions.
Consider wearing clothing that can conceal your identity when you use a Bitcoin ATM. You can wear sunglasses over your eyes and a hoodie covering your head.
This might sound extreme, but it has become the norm in authoritarian countries such as Nigeria, where governments are trying to criminalize Bitcoin.
Research the Fees
Each Bitcoin ATM will charge a small fee for a transaction. This includes buying and sending Bitcoin.
Make sure you research these fees in advance so you know how you can save on them. Fees are generally much lower if you make larger transactions.
See You At the Bitcoin ATM
Now you know how does a Bitcoin ATM work and how you can get started with buying Bitcoin.
It offers more convenience and security compared to a web wallet or a hardware wallet. You can buy Bitcoin using cash and you want to always check the prices beforehand.
Make sure you always follow our best practices to have the right experience when using a Bitcoin ATM. While Bitcoin ATMs are still in their infancy, based on this guide, you can tell that they will continue to rise in popularity.
You can read more articles about Bitcoin on our website.
