There’s a lot of talk about cryptocurrencies like Bitcoin and Ethereum being the ideal way for the unbanked and underbanked to manage their money. But what does this mean? Who does this apply to? And how does it work?
Unbanked and underbanked refers to people who, for one reason or another, don’t have easy access to a checking account, savings account, credit cards, loans, etc. or who prefer not to use them. Merriam Webster defines the unbanked as “A person is unbanked when he or she does not participate in the banking system and relies on the use of cash rather than checks or credit cards.” Someone is underbanked when they only have limited access to or only occasionally use traditional financial institutions.
So How Many People are Unbanked?
There are more than 2.5 billion people in the world who don’t have access to the banking system. In the United States, the FDIC estimates that there are 10 million households that are unbanked or underbanked, meaning that for a variety of reasons, they don’t have access to mainstream banks, checking or savings accounts, credit cards, or other digital currencies.
How do Cryptocurrencies Help?
Anyone can buy, sell, and spend Bitcoin, you don’t have to have a bank account or credit cards. And if you want to send money to another person anywhere in the world, that person also does not need a bank account to receive Bitcoin from you that they can withdraw in cash. This is an easy transaction and can be helpful for anyone, regardless of access to financial institutions. Both the sender and the recipient need a Bitcoin wallet in order to do this transaction.
Converting cash to Bitcoin is a very easy process using a Bitcoin ATM.
- The first step is to create an account with the ATM operator so you can use the Bitcoin ATM
- Then you need to create a digital wallet to store your transactions.
- Insert cash into the Bitcoin ATM to purchase Bitcoin
- Once you have Bitcoin in your digital wallet, you can spend it at any retailer who accepts Bitcoin either online or in a brick and mortar business location. More businesses are deciding to accept Bitcoin as payment every day.
- You can also cash in some or all of your Bitcoin to receive cash from the Bitcoin ATM at any time, and you can send Bitcoin to another person’s wallet anywhere in the world.
Sending Bitcoin to Another Person
When sending cash to another person using an intermediary like Paypal, Western Union, Moneygram, and others, they need to make money on the deal, so they charge a fee. The more money you send, the higher the fee. When sending Bitcoin to another person using your Bitcoin wallet, there is a very small miner’s fee to confirm the transaction, (miners’ fees fluctuate all the time but are currently just a few cents per transaction, regardless of the amount) but that is the only fee the sender is charged. You don’t have to use a Bitcoin ATM to do this. You can log in to your wallet app and send Bitcoin directly to another person’s wallet, just using your phone.
Using Coinsource Bitcoin ATMs
- To use a Coinsource Bitcoin ATM, you need to enroll with us.
- Then you will need a wallet app:
- Locate the closest Coinsource Bitcoin ATM
- Log in, select the “buy bitcoin” option and provide a bitcoin address from your wallet, either by scanning a QR code or by copying and pasting the address
- Next, insert your cash.
You will get an immediate confirmation of your Coinsource transaction, either by text or by email if you have opted to receive confirmations.
You will receive another confirmation when the transaction is confirmed on the blockchain, which typically takes less than an hour. Coinsource does not control the amount of time it takes to confirm transactions on the bitcoin network.
What About Sending Cash?
You can use a Coinsource Bitcoin ATM to send cash directly to another person’s wallet without spending your own Bitcoin. If you have a Coinsource account, you simply log in to the closest Coinsource Bitcoin ATM, insert cash into the kiosk, indicate the wallet address you want to send to, and the recipient receives the equivalent amount of Bitcoin minus fees. And Coinsource has the lowest exchange fees of all the Bitcoin ATM operators in the market.
NOTE: Coinsource does not have access to your Bitcoin wallet, and they don’t charge any fees when you spend your Bitcoin or send Bitcoin to another person through your wallet app. Coinsource fees only apply when using one of our Bitcoin ATM kiosks for transactions.