Originally published on January 27th, 2021 – Updated on February 24th, 2021
You may have noticed that in many of the usual locations where you can find a bank ATM, like convenience stores and gas stations, there’s another kiosk right next to the bank’s kiosk that says it is a Bitcoin ATM. But how do you use a Bitcoin ATM, and how do they work?
Answer: All Bitcoin ATMs allow you to use cash to buy Bitcoin and send it to a Bitcoin wallet of your choosing. And many of these kiosks also allow you to sell Bitcoin and receive cash. You can also insert cash and have it sent to someone else’s Bitcoin wallet, or account. You just need a smartphone. Here’s how:
Before You Go to the Bitcoin ATM
Get a digital wallet
Just like we have physical wallets to store our physical money, you need a digital wallet to store your digital money. Essentially, your digital money must “go” somewhere, and your Bitcoin wallet gives you a place to “store” it, at least figuratively.
In truth, all bitcoins live in the online ledger known as the blockchain and never leave it. So your digital wallet doesn’t contain bitcoins per se, but it does contain your balance and enables you to keep track of your cryptocurrency, just like a physical wallet helps you keep track of your physical currency.
Digital wallets come in various forms–such as web-based, hardware devices and desktop software–but if you’re interested in Bitcoin ATMs, a mobile app or web-based digital wallet will likely suit you best. You can determine what digital wallet works for you via Bitcoin.
Set up your digital wallet and have easy access to it
You’ll need to ready your wallet before hitting a Bitcoin ATM. This is simple if you use a mobile app as a wallet–just set up the mobile app.
Otherwise, mobile access changes depending on the wallet type you have. All wallets have “keys,” often in the form of alphanumeric characters, to secure your cryptocurrency. You may need to note this key or download a QR code. Follow the instructions your wallet supplies.
Find Bitcoin ATM Locations
Once you have your wallet set up, your next step is to find a Bitcoin ATM machine near you. This is easy–just look for them right here on Coinsource’s handy-dandy Bitcoin ATM map. Plug in your ZIP code to receive a list of businesses that host Bitcoin ATMs, along with their addresses and hours.
To use a Coinsource Bitcoin ATM, or anyone’s ATM for that matter, you’ll also need to set up an account. Follow these instructions to do that.
How to Buy Bitcoin at a Bitcoin ATM
Here’s how a Bitcoin ATM works to purchase Bitcoin. The process is simple, and relatively similar across operators.
- Create an account with the Bitcoin ATM operator, privately establishing your identity.
- You need a Bitcoin wallet that will securely store the records of all of your Bitcoin transactions, and this can be done easily with a downloadable app for your smartphone.
- Insert cash into the ATM and indicate which Bitcoin wallet address you want to send it to. Let’s say you insert $100. The Bitcoin ATM operator then sells you $100 worth of Bitcoin at the market price at that moment, minus their own operating fee. Some operators also deduct the miner’s fee, but Coinsource does not. We pay the miner’s fee for you.
- You will receive confirmation that your Bitcoin wallet now holds the secure record of this transaction, proving that you own that $100 worth of Bitcoin, minus the fees.
NOTE: Not all Bitcoin ATM operators are the same! Some take longer to complete transactions than others, and the fees charged can be quite steep. And if you have problems, it can be hard to get customer support.
How to Sell Bitcoin at a Bitcoin ATM
Looking to convert your Bitcoin to cash? Some Bitcoin ATMs work to sell Bitcoin as well. Here’s how:
NOTE: If you own Bitcoin, then you already have a Bitcoin wallet. Many people have more than one wallet, so you need to decide in advance which wallet and key you want to use to sell your Bitcoin.
- If you don’t already have an account with a Bitcoin ATM operator, you will need to create one.
- Then, using one of their kiosks, you log in to your account, indicate how much Bitcoin you want to sell, and which wallet address you want to sell from.
- This transaction needs to be verified on the Bitcoin network, or blockchain, and you will receive notification when it has been verified and you can withdraw your cash. This takes longer than buying Bitcoin, and different operators require more time than others.
NOTE: Different operators also have different levels of customer service, if any, so it pays to do your research in advance and do business with a Bitcoin ATM operator who is reputable, and has fast, reliable customer service.
- As with buying Bitcoin, the ATM operator will charge a fee for the transaction, so the cash you collect will be minus the operator’s fee and possibly also the miner’s fee.
View our complete tutorial on how to withdraw cash from a Bitcoin ATM.
How to Send Cash to Someone Using a Bitcoin ATM
Bitcoin ATMs also work well to send Bitcoin to someone else. All you have to do is sell some of your Bitcoin and send it to their Bitcoin wallet.
But if you want to send cash to someone, and not sell your Bitcoin to do it, here’s how:
- You will need to have an account with the Bitcoin ATM operator.
- Log in to your account on their kiosk and indicate the amount of cash you want to send, and the address of the Bitcoin wallet you are sending it to.
- Insert cash and it will be deposited in the recipient’s Bitcoin wallet in the form of Bitcoin that they can then cash in and withdraw.
To get more detailed instructions, check out our guide on how to send cash through a Bitcoin ATM.
Coinsource charges the lowest fees of any Bitcoin ATM operators, and they also provide 7-day-a-week live customer support. They never pass along miner’s fees to their users, and your transactions with Coinsource are quick and easy.
Frequently Asked Bitcoin ATM Questions
How Much Cash Can I Deposit at a Bitcoin ATM?
The short answer: It depends. Most upper limits are between $1,000-$3,500 per transaction and can go as high as $20,000. These numbers vary by operator. Coinsource’s upper limit is $5,000. Check out our list of Bitcoin ATM limits by operator to find the limit for any specific kiosk.
Can I buy Bitcoin with a credit card at a Bitcoin ATM?
No. Bitcoin ATMs require you to use cash. It’s one reason many favor them for conducting their cryptocurrency business.
You can use a credit card to purchase Bitcoin through a peer-to-peer network, but these platforms are more susceptible to hacking.
Are Bitcoin ATMs anonymous?
Yes, transactions made through Bitcoin ATMs are anonymous.
Cryptocurrency’s relative anonymity is part of its appeal. To be clear: All Bitcoin transactions are recorded in the blockchain, so there is a record of your transaction. However, your identity isn’t attached to that record.
If you prioritize anonymity, a Bitcoin ATM’s reliance on cash benefits you because they are less traceable than credit cards.
How long does a Bitcoin ATM transaction take?
Or as some people put it: Are Bitcoin ATMs instant?
Coinsource ATM purchases are instant. However, Bitcoin sales must be confirmed on the blockchain. This confirmation involves a third party, so Coinsource can’t control the time this takes. Typically, it’s minutes.
In comparison, it can take weeks to receive your money from a crypto exchange.
Are Bitcoin ATMs safe?
We’ll answer this from two different perspectives.
Are my finances secure using a Bitcoin ATM?
Yes. It’s important to us at Coinsource to provide a secure experience for our customers, so we’ve gone to great lengths to develop our state-of-the-art software. Also, from a practical perspective, we can’t successfully run a business with problematic software or hardware. We take special precautions to ensure the security of Coinsource ATM transactions to benefit all parties involved.
Am I safe using a Bitcoin ATM?
We do our part to make interacting with our kiosks as safe as possible. Our ATMs store relatively low amounts of cash, so they aren’t obvious targets for theft. Plus, we encourage all Coinsource ATM owners to place their kiosks in a highly visible space where they can see the activity around a kiosk.
If you want to be extra-cautious, our Bitcoin ATM map can point you in the direction of a business or a neighborhood you’re familiar with. This concludes our guide, explaining how Bitcoin ATMs work. If you ever need any help when using a Bitcoin ATM, please reach out to us.