Author: John Ma
TL;DR
There are many ways to buy cryptocurrencies online, but what if you’re sitting on a pile of cash that you want to immediately convert? You can take the scenic route – deposit the cash at your local bank, register with an exchange, complete identity verification, fund your account, wait for it to appear on the exchange, and then finally make the swap.
That’s a lot of steps, though, isn’t it? Wouldn’t it be great if some magical vending machine existed that spat out Bitcoin in return for your filthy fiat bills? Good news! That machine is called a Bitcoin ATM and in this tutorial, we’re going to talk you through using one.
Introduction
Most methods for purchasing Bitcoin online will link your personal details to the purchase – from exchanges complying with KYC/AML regulations through to the credit card/bank account details used for payment.
One of the easiest ways to purchase Bitcoin (BTC) anonymously is by using a Bitcoin ATM. In this guide, we’ll walk through the procedure of buying Bitcoin with cash at a physical ATM, documenting the steps before, during, and after the purchase.
What is a Bitcoin ATM?
A Bitcoin ATM (Automated Teller Machine) is functionally similar to the ATMs commonly used to deposit cash into a bank account. A regular ATM will take your cash and update your bank balance with an IOU that you can use to pay others.
With a Bitcoin ATM, your cash is exchanged for Bitcoin, which is deposited directly into your own Bitcoin wallet. It is also often possible to purchase selected altcoins at Bitcoin ATMs, and some outlets will also include the option to sell your crypto for cash!
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Preparation
First things first! We’ll need to set up a wallet to receive the purchased Bitcoin. There are a number of wallets available on Android and iOS devices. We’ll use Trust Wallet in this guide, but the steps will be similar for other wallets.
In the wallet app, we will need to locate the public address. Most apps will display this information if you tap on a “Receive” button. For the purposes of this guide, we’ll be using the QR code. If you are using a wallet that supports multiple cryptocurrencies, make sure you have the public address corresponding to the currency that you will purchase (in this guide, BTC).
A global Bitcoin ATM map. Source: coinatmradar.com
Next, we need to locate a Bitcoin ATM, as we’ll need to physically travel to the ATM. Luckily, there’s a handy interactive tool at coinatmradar.com, which will help us locate ATMs. Enter your preferred location into the search field to display machines in the local area.
Information about specific ATMs. Source: coinatmradar.com
Clicking on any of the pins will display information about the ATM’s location and supported currencies. If we click on “View Details,” we can see price feeds, fee schedules, operator details, and, most importantly, ratings from other users.
We’ll want to pick an ATM with good recent ratings, that displays owner contact details and provides a price feed as well as a fee schedule. Fake machines exist, so this data gives us some confidence as to their authenticity.
Buying your coins
We’re now facing a Bitcoin ATM, armed with our mobile wallet in one hand and a fistful of cash in the other. Before you start pressing buttons, it’s a good idea to have a good look at the machine to see how it all works. All machines will be slightly different in layout (and aesthetic), but the basic functionality will be the same. In this guide, we will refer to the machine pictured above.
On the right-hand side, there is a touchscreen that gives instructions on how to complete a purchase or sale of Bitcoin. It states the current price that the machine is offering for the exchange (around €9,100) if you want to sell Bitcoin, and ~€9,900 if you want to buy. (Note: A quick check on coinmarketcap.com had revealed the aggregate market price of Bitcoin at approximately €9,600 – the difference in price is how the ATM operators make money).
Along the left-hand side are the slots for depositing and collecting fiat money, a receipt printer, and a QR reader for address input.
Using the touchscreen, select the “Buy” option (keep in mind that we want BTC and not altcoins) by tapping on the right-hand side (the Buy side) of the screen. Different models of ATMs will have a different method for selecting this option, but this is a fairly cosmetic difference, so the “Buy Bitcoin” option should be quite clear.
Scan your wallet’s Bitcoin receiving address with the ATM’s QR reader to tell the machine where to send the purchased Bitcoin.
Check that the alphanumeric address displayed by the machine is exactly the same as that displayed by your wallet app.
Insert your cash into the deposit slot.
Set the miner fee that you want to pay for the transaction to be included in a block (note: not all ATMs have this feature). The higher the fee, the sooner it will be confirmed.
Finalize the transaction by accepting the purchase.
Take the receipt in case of any issues.
This will send the transaction to the Bitcoin network, ending with the delivery of BTC to your wallet. Note that the Bitcoin will not appear immediately in your wallet – the transaction must first be added to a block. Generally, six confirmations are required before the transaction can be considered “final.” For the Bitcoin network, a single confirmation time is on the order of ten minutes.
After the purchase
After the purchase, you can follow the progress of your transaction by using a block explorer for Bitcoin (such as Blockchain.com) with your receiving address or transaction ID as your search terms. Depending on your wallet app, you will see the deposit in your wallet balance after 5-15 confirmations.
There should definitely be at least one confirmation in the first hour. If there are none after a couple of hours, you should contact the ATM owner immediately to see if there’s a legitimate technical reason for the delay.
Closing thoughts
Bitcoin ATMs offer consumers a simple method for purchasing Bitcoin with cash. As a bonus, the Bitcoin purchased will not have been attached to your personal identity through the use of bank transfers or credit cards.
The vendors of an ATM generally charge a spread on the offered Buy/Sell price compared to the current market price of Bitcoin in a manner similar to Foreign Exchange vendors. Using an online tool like coinatmradar.com can assist with finding a trustworthy ATM with an acceptable fee schedule.