An ATM stands for "Automated Teller Machine". A Bitcoin ATM is just that: an ATM, but for Bitcoin. Although you likely will not encounter one on the Dutch streets very often, there are about a thousand Bitcoin ATMs in the European Union. In this article, we will discuss what one can do with these ATMs and where they can be found.
What is the function of a Bitcoin ATM?
Bitcoin ATMs provide a convenient way to buy and sometimes even sell Bitcoin. Think of them as a very small physical crypto exchange.
Using Bitcoin ATMs, it is possible to redeem cash or perform a bank transaction to purchase Bitcoin, which is then sent to a Bitcoin wallet of your choice. This can be your own wallet or another person's. In addition, many of these machines offer the ability to sell Bitcoin and withdraw cash.
Buying Bitcoin at an ATM is in some cases faster than buying from an online exchange because one does not have to go through full account verification first. However, for most people, a Bitcoin ATM is not around the corner and comes with a nice travel time. In addition, this account verification at exchanges has important advantages. For example, these types of verifications help make platforms more secure and combat financial crime.
How does buying Bitcoin at a Bitcoin ATM work?
The process of buying Bitcoin at a Bitcoin ATM is simple and can be summarized in the following steps:
- Find a local Bitcoin ATM. For example, use CoinATMradar to retrieve the latest information on Bitcoin ATM locations. For example, there are quite a few Primera stores in the Netherlands that have such an ATM. Some also offer support for Ethereum.
- Connect a wallet: link a wallet to the device. Usually, this is done by scanning a QR code. Some ATMs also offer the option to generate a new wallet.
- Enter cash or bank details: Enter the desired amount of cash or enter bank account information, depending on the options offered by the Bitcoin ATM.
- Confirm and receive Bitcoin: Confirm the transaction and receive Bitcoin worth the amount entered, minus any transaction fees. The transaction through a Bitcoin ATM takes the same amount of time as a regular blockchain transaction, which means it can take anywhere from a few minutes to a few hours.
Be aware, however, that using a Bitcoin ATM is very expensive. At most Bitcoin ATMs in the Netherlands, the buy fee is above 9% at the time of writing. At Blockrise, the buy fee at the end of 2023 is 0.4%.
Differences between Bitcoin ATMs
There are some important differences between Bitcoin ATMs, as there are different brands or providers of these machines. Some Bitcoin ATMs operate completely anonymously, while others may require a verification process, such as providing a phone number, receiving a verification SMS, or going through a registration process.
And, not all Bitcoin ATMs offer the ability to convert Bitcoin into fiat currency such as euros or dollars. This varies by manufacturer and region.
Besides the high cost, there is an additional disadvantage: there have been several hacks of these types of machines in the past. Therefore, it is always at your own expense and risk to use a Bitcoin ATM.
The information provided in our articles is intended solely for general informational purposes and does not constitute (financial) advice.