Some hail Bitcoin as the future of the financial world, while others view it as a bubble that will burst at any moment. Irrespective of the view one subscribes to, there’s no doubt about the massive popularity of Bitcoin! And when anything is this successful, thousands of subsidiary businesses pop up. In the world of crypto, too, following the success of Bitcoin, there was an interesting development: the Bitcoin ATM.
What is a Bitcoin ATM?
Anyone who has used an ATM, a.k.a. a cash machine, could guess what a Bitcoin ATM is. A machine where people can buy and sell Bitcoin and other cryptos using cash. It is usually set up in a kiosk-type of infrastructure that can connect the user, via the internet, to their crypto wallet. Bitcoin ATMs are not associated with any bank and do not require your bank account details. Powered by blockchain technology, these machines allow you to deposit any crypto purchased into your digital wallet.
Although these transactions can be made online, introducing ATMs simplifies the process.
In summary, here are some of the main things to know about them:
- Users can purchase or sell cryptos using Bitcoin ATMs.
- They usually use QR codes to receive and send tokens to users’ digital wallets.
- You don’t need to use your bank credit or debit cards to access Bitcoin ATMs. And they are not connected to any bank account.
- Third-party companies usually own and operate Bitcoin ATMs.
How do Bitcoin ATMs work?
Bitcoin ATMs comprise a QR scanner, bill acceptor, and dispenser. These components are linked together through software to make the buying and selling process faster and more secure.
There is a service fee associated with using a Bitcoin ATM. Typically, this is a percentage of a transaction.
Types of Bitcoin ATMs
How Bitcoin ATMs work depends on the type of machine it is. There are two main types:
- Unidirectional: These are one-way transaction machines that support either the buying or the selling of Bitcoin and other cryptos.
- Bi-directional: These are two-way transaction machines, unlike the former type. They support buying AND selling of Bitcoin and other cryptos.
Bitcoin ATMs can also be used to send crypto to another person. To use this option, enter the wallet address of the person you’d like to send the Bitcoin instead of your own.
How to use a Bitcoin ATM
At the outset, you will need to locate an ATM. You can learn to do this by reading the section below.
Bitcoin ATMs verify the user’s identity in several ways. If the transaction amount is large, the ATM may request your mobile number to send you a verification code or ask you to submit a scanned identification document. Some Bitcoin ATMs may also have a fingerprint-scanning facility.
Steps for buying crypto via a Bitcoin ATM:
- Create an account with the Bitcoin ATM operator on the machine itself. Usually, this requires scanning your ID and entering your personal information, which is kept confidential.
- Keep your crypto wallet (digital wallet/Bitcoin wallet) details ready for use. It will securely store your crypto.
- To receive Bitcoin, enter the wallet address on the device. This is easily done by using the QR code. Most mobile wallets generate a QR code—scan it, and you are ready to go.
- Insert the relevant amount of cash into the ATM to receive Bitcoin in your wallet. Let’s say you insert ₹100; the machine will sell you Bitcoin worth ₹100 minus the ATM fee.
- Don’t forget to collect the confirmation receipt of your transactions.
Steps for selling crypto via a Bitcoin ATM:
The selling process, too, is fairly simple. If you have multiple wallets, decide which you wish to use. Remember, there is a selling fee as well. Here is how it works:
1. Log into your account at the Bitcoin ATM.
2. Indicate the amount you wish to sell and the digital wallet you wish to use.
3. The Bitcoin network or blockchain will verify the transaction using your private key. Once you receive a notification post verification, you can withdraw your cash.
4. The transaction time may vary with different operators, and selling may take longer than buying.
5. Do your research. Use a reputable and fast Bitcoin ATM operator.
Bitcoin ATM fees
Typically the fee charged, as mentioned before, is a percentage of the transaction amount. In most cases, Bitcoin ATMs charge between 7% and 15%, but sometimes the fee may be as low as 4% or as high as 25%.
In recent years, there have been some allegations of Bitcoin ATMs charging exorbitant transaction fees and not being transparent about it. Nonprofit Truthout, for instance, argues that Bitcoin Depot ATMs sometimes charge up to 20% in exchange fees without disclosing the real cost to users.
BTC ATM locations: Where can I find them?
Between December 2020 and January 2022, over 1,000 Bitcoin ATMs were installed every month. However, with the subsequent bear market, there has been a slowdown. Still, Bitcoin ATMs can be found across the globe now. The largest concentration of them is in the US as of May 2023.
There are websites, including Google Maps and Coin ATM Radar, to guide you to them. They also help you figure out the fees. Just key in your location and hit “enter” to locate the nearest kiosk.
Are there any Bitcoin ATMs in India?
The first Bitcoin ATM in India was in Bengaluru. It was set up in 2018 by Unocoin, an Indian blockchain solutions company. But the government seized it soon after its installation due to Reserve Bank of India (RBI) restrictions. It never reopened.
The RBI lifted its ban later, but several regulations continued to be in place, limiting the number of ATMs.
In India currently, there is a Bitcoin ATM in Delhi. However, its operational status is not known.
If you do decide to use a Bitcoin ATM in India, here are some things it may help to be aware of:
- Transactions on Bitcoin ATMs are irreversible, so don’t expect refunds.
- Remember, you cannot pay services or bills using a Bitcoin ATM.
- If you have a paper wallet for transactions, never share it with anyone—not even the image.
- Always purchase Bitcoin for yourself only, never on behalf of third parties.
Is there Bitcoin ATM in India?
Yes, there are Bitcoin ATMs in India that allow users to buy and sell Bitcoin using cash or cards.
How much is a Bitcoin ATM?
The cost of a Bitcoin ATM can vary, but generally, it ranges from a few thousand dollars to tens of thousands of dollars.
How much does Bitcoin ATM charge for $100?
Bitcoin ATMs typically charge a transaction fee that varies between 3% to 8% of the total amount being purchased or sold.
Can I convert Bitcoin to cash in India?
Yes, you can convert Bitcoin to cash in India through various platforms and exchanges that support cryptocurrency transactions.
Where I can buy Bitcoin in India?
You can buy Bitcoin in India from cryptocurrency exchanges such as CoinSwitch.