Explainer: What is a crypto ATM?

As the name suggests, crypto ATMs work just like any other ATM. However, these cryptocurrency ATMs function and operate more like a crypto exchange. Let us now study in detail about these.

What are crypto ATMs?

Crypto ATMs are terminals allowing users to buy and sell cryptocurrency in exchange for cash or with a bank debit card. All crypto ATMs sell Bitcoin, while some also offer other cryptocurrencies. It must be noted that not all crypto ATMs offer crypto sale, some are limited to purchases only.

These cryptocurrency ATMs are connected to a cryptocurrency network and are generally not controlled by financial institutions. They are linked to the user’s digital wallet to process the transaction and send crypto to the customer. While there are thousands of crypto ATMs worldwide, most of them are located in the US.

Know the working of crypto ATM

A crypto ATM comprises of a QR scanner, monitor, debit card acceptor, bill dispenser, and in some cases, cash. On the back end is the software that makes buying and selling cryptocurrency possible.

When you approach the ATM, you must verify your identity. While the identification process may differ from one ATM to the next, most will require you to enter your phone number. Once you have done this, you will receive a verification code that you need to enter to proceed. Now your phone number is verified and registered with the ATM.

Next, input the wallet address by simply generating a QR code from the mobile wallet's app. Place the QR code in front of the ATM's code reader and it will verify the address in seconds. Then, enter the amount of coins one wants to buy and enter a cash or debit card for the same. Transactions may take a few minutes to complete after buying crypto.

Do crypto ATMs levy charges?

A majority of cryptocurrency ATMs charge a certain percentage of the total transaction value. Generally, the fee could be as low as 4% and can also go to 20%, depending on the preferred choice of ATM.

How do crypto ATMs operate?

A crypto ATM includes a monitor, QR scanner, debit card acceptor, and a bill dispenser. Using a crypto ATM requires a mobile phone, a phone number, a picture (optional), and access to a digital wallet.

When one approaches the ATM, identity verification is mandatory. Most crypto ATMs require you to enter your phone number. Once done, a verification code will be received which needs to be entered so as to proceed ahead.

Next, one needs to enter one’s wallet address. For this, simply generate a QR code from your wallet's mobile app. This can be done by placing the QR before the code scanner in the ATM and the address is verified within seconds. Now, one just needs to enter the requisite number of coins to buy and input cash or a debit card to purchase your desired cryptocurrency. Transactions take place on the blockchain and can take a while to process. After purchasing the crypto, the transaction might just take a few seconds to complete.

Know how many crypto ATMs are across the world

As of March 2022, there are about 36,600 crypto ATMs installed across the world. While, the United States hosts the highest number of crypto ATMs worldwide, having 32, 598 devices, Canada comes next with 2,410 ATMs.

Does India have crypto ATMs?

India already has two crypto ATMs, which are working around Delhi/NCR. However, in 2018, a Bitcoin ATM was seized by the Karnataka police in Bengaluru as it was illegal and set up without any requisite approvals from the concerned authorities.  

Benefits of crypto ATMs

Fast speed

One of the most notable advantages of using a crypto ATM is that it is incredibly fast. The transaction will be made in less than a minute while using these crypto kiosks.

Security

Crypto ATMs offer foolproof security. So, when you are using it, no one can tamper with your transaction. Therefore, it is safe for all investors, and anyone can easily trust it without worrying about anything.

Easy to use

Crypto ATMs are quite similar to regular ATMs. They are most suited for people who are not tech-savvy and prefer a streamlined way to buy cryptocurrency. Moreover, these ATMs serve as a great introductory tool for beginners who are new to this space. 

Disadvantages of crypto ATMs

Availability

Not all geographical regions boost of having crypto ATMs. Since the latter are limited in number, one needs to travel long distances to access them.

Higher transaction costs

Though crypto ATMs are quite comfortable to use, one has to incur a high transaction fee to operate them. Sometimes, the amount is much higher than the average amount.

Recurring technical issues

Another con of using a crypto ATM is that most of the time, technical problems occur while making the transactions. Sometimes, technical glitches happen very often, thus making it very difficult to process the transaction.

Transaction Limits

Usually, there are transaction limits set with most of the crypto exchanges

As with most crypto exchanges, there usually will be minimum and maximum transaction limits set by the ATM company. Transaction minimums and maximums are generally in the range of $10 to $10,000.