What Are Bitcoin ATMs and How Do They Work?

The Purpose of Bitcoin ATMs and How to Use Them
By 
Coin Cloud Team
, published on 
July 7, 2020
What Are Bitcoin ATMs and How Do They Work?

No doubt by now you’ve heard of Bitcoin, and maybe other terms from the industry: cryptocurrency, digital currency, blockchain, digital wallets and exchanges.

But one of the biggest (literally) developments in the crypto space is the Bitcoin ATM. What exactly are these metal machines, and how do they work?

What are Bitcoin ATMs?

You’ll hear them referred to by several names: Bitcoin ATMs, BTMs, Digital Currency Kiosks, Cryptocurrency Machines and more. But they all mean basically the same thing.

A Bitcoin ATM is a machine, similar to a banking ATM, where you can deposit and/or withdraw cash. But instead of connecting to your bank account, a BTM works with your mobile crypto wallet. You either buy or sell Bitcoin (or other digital currencies) with the cash.

The very first Bitcoin ATM was installed in a coffee shop in Vancouver, Canada, in 2013. This original BTM was made by Robocoin, who also made the very first Coin Cloud Bitcoin ATMs when they launched on the Las Vegas Strip in 2014. Since then, Coin Cloud BTMs have evolved to become smaller and sleeker, and are now manufactured inhouse.

Hardware vs Software

The hardware for a Bitcoin ATM is similar across the board. BTMs have a monitor, QR code scanner, and depending on the type, bill acceptor and/or dispenser. Some also have a thermal printer for paper wallets and receipts.

The software, which controls the back end and allows the transaction to occur, will differ based on the BTM company. But it always aims to make the process quick, easy and secure. It guides you step by step through how to buy digital currency with cash, or how to sell your crypto and withdraw cash.

Types of Bitcoin ATMs

There are basically three types of BTMs; those that allow you to buy crypto with cash, those that allow you sell your crypto for cash (or “cash out”) and those that do both.

According to Coin ATM Radar, almost 70% of BTMs are unidirectional.

!Buy-Sell Share

1. Unidirectional: Buy Only (68.2%)

These one-way BTMs will let you purchase digital currency with cash and send it to your wallet or online exchange, but you can’t withdraw cash.

2. Unidirectional: Sell Only (0%)

There are only a very few of these machines, which allow you to cash out your crypto, but won’t accept cash input.

3. Bidirectional: Buy and Sell (31.8%)

This represents a minority of Bitcoin ATMs because it requires more maintenance to operate a machine that will both buy and sell digital currency. For example, you need to make sure the machines carry adequate cash for people to be able to cash out, and employ armored truck services to pick it up. However, Coin Cloud is proud to offer 100% two-way (bidirectional) BTMs that allow you to both buy and sell crypto with cash. Coin Cloud offers 30 digital currencies for trade with cash, in the world’s largest network of bidirectional kiosks.

How Bitcoin ATMs Work

Bitcoin ATMs operate in a similar manner to a banking ATM, or even a parking meter machine. In a nutshell, the process can be broken down into a few simple steps.

1. Verify Your Identity

The first step is going to be verifying who you are, which at a BTM like Coin Cloud’s will involve entering your mobile phone number. The machine will then text you a verification code which you enter to start the transaction.

2. Choose to Buy or Sell

Once you’ve initiated the session with the BTM, you will choose to buy or sell – and you will choose what you want to buy or sell (most people pick Bitcoin, but with Coin Cloud you can also select from 29 different altcoins). To make this simpler, we’ll just talk about Bitcoin (BTC).

3. To BUY Bitcoin

Generate a QR code from the digital wallet on your phone – for the fastest process at a Coin Cloud BTM, use the Coin Cloud Wallet app. Scan the code with the BTM camera. Insert cash into the machine to be deposited into your digital wallet.

4. To SELL Bitcoin

Enter the amount you wish to withdraw, in denominations of $20 or $100. Scan the QR code on the machine with your phone. On your wallet, enter the exact amount of BTC the machine is asking for; if you use the Coin Cloud Wallet app, this amount will be calculated automatically without having to type it in. When the cash is ready, retrieve it from the machine.

Why Should You Use a BTM?

While there are several ways to buy or sell cryptocurrency, the advantages to using a BTM are enough to keep customers coming back.

1. Ease of Use

First and foremost, Coin Cloud BTMs are the easiest way to buy and sell digital currency. If you’ve ever used a banking ATM, you’ll find the process intuitive and simple.

2. Convenience

Transactions done on a Coin Cloud BTM are faster than online exchanges, and require less setup. With over 850 machines and growing, there’s sure to be a Coin Cloud machine near you. If you’re planning to sell your Bitcoin, you can even reserve the cash ahead of time using the Coin Cloud Wallet app.

3. Support

Coin Cloud offers live customer support to help you with your transaction, or answer any questions you might have. If the process is new to you, you’ll appreciate being able to talk to a live person.

4. Privacy

Unlike online exchanges, you don’t need to share your banking information to use a Bitcoin ATM – with Coin Cloud, it’s just your phone number, and if you want to become verified so you can trade higher amounts, you’ll only need to provide your ID.

5. Security

Coin Cloud BTMs work with all secure digital wallets to keep your funds safe. We also have procedures in place to limit scams and fraud, so you can trust your money with Coin Cloud. Having operated since 2014, Coin Cloud is the leader in the digital currency kiosk industry.

Disclaimer: The information and views supplied on the Coin Cloud blog are for educational and entertainment purposes only. We are not financial advisors, so please do your research and consult with a trusted financial specialist before investing your money.

What is Coin Cloud?

Founded in 2014 in Las Vegas, Nevada, Coin Cloud is the leading digital currency machine (DCM) operator. With over 4,500 locations nationwide, in 48 states and Brazil, Coin Cloud operates the world’s largest and fastest-growing network of 100% two-way DCMs, a more advanced version of the Bitcoin ATM. Every Coin Cloud DCM empowers you to quickly and easily buy and sell over 40 cryptocurrency options with cash.

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