How to use a bitcoin ATM or How does a bitcoin ATM work
Ways to acquire bitcoins
With recent bitcoin price spike and news coverage people hear again more often about new phenomena as digital currencies or Bitcoin in particular. Although learning about it is a whole adventure, getting first bitcoins is even more difficult.
There are many ways to get some bitcoins:
- Sell something for bitcoins. For example, Open Bazaar is a totally new e-commerce concept, when shops are run by individual business owners, rather than hosted at a central party. In a nutshell, it is a decentralized Ebay market, when nobody can tell you that they don’t allow you to sell something because of whatever reason. In order to make payments possible bitcoin is purely used a means of payment on this platform.
- Work and get paid in bitcoins. There are many places where jobs are posted when employer is ready to pay with bitcoins, e.g. Coinality or Jobs4Bitcoins sub on Reddit.
- Purchase bitcoins. This is the main straightforward way of getting your bitcoins.
Many platforms allow buying bitcoins by sending a wire transfer or connecting your bank account, using credit card, or even PayPal payment. To name the biggest players: Coinbase, Cirle, bitcoin exchanges BitStamp, Kraken. The drawback of all these methods — they require a tedious customer identification by following their KYC/AML policies, which requires you to provide docs and usually wait several days to get approved.
Another option is to go to a local bitcoin meetup or find someone at localbitcoins in order to make a direct trade with another user. This is a more anonymous way to buy bitcoins, and you can find options of buying via bank deposit, or even meeting someone and trading for cash (probably, amount should be big enough so that other person agrees to meet). Peer-2-peer purchased usually also impose pretty high fees compared to market price.
Easier and reliable way of getting your first bitcoins is by using one of many bitcoin ATMs around the world.
They have fixed permanent locations, usually placed in stores, restaurants or other public places and have a predefined rules of operation (like open hours, fees, verifications etc). This is the most affordable and easiest way to acquire small amounts of bitcoins (like $20), however, many users acquire large amounts as well (more than $1K). Ticket varies for different locations, but on average is about $200 according to information from different operators.
Find a bitcoin ATM
First you need to find a bitcoin machine near you that you would like to use. There are plenty of different ATM types and they support different operations (all usually allow to buy bitcoins, however only 40% of them also allow to sell bitcoins and get cash).
The easiest way to find a bitcoin ATM is by using Coin ATM Radar website, which collects all information about bitcoin ATMs, including fees, verifications, online status and many more.
Here is the video tutorial of how to find a location in particular city:
You can sort locations by fees in order to find cheapest proposals in your area. Bitcoin ATMs list can be filtered by operation direction, e.g. when you need to find only locations where you can sell bitcoins for cash.
Bitcoin ATM types
There are many different bitcoin machine types. Here are the main ones you can see in the wild:
Genesis1 bitcoin ATM
This is a two-way bitcoin machine supplied by San Diego based Genesis Coin bitcoin ATM producer. Normally you can buy and sell bitcoins at this type of machines. As it is a first-generation model, it has only 31 installations (4.6% of all ATMs).
Satoshi1 bitcoin ATM
This is a one-way bitcoin ATM from the same producer. This machine allows only buying bitcoins, and not selling bitcoins for cash. It has a huge 21" screen, which is usually customized for brand of the operator. There are 154 machines installed of that type (22.8% of all locations).
Satoshi2 bitcoin ATM
This is the last generation of Genesis Coin machines. It basically has the same hardware as Satoshi1, but there is a cash dispenser available on the bottom right. So it is a two-way machine and supports buy and sell operations normally. There are 51 machines of this type installed worldwide (7.6% of all).
So Genesis Coin machines are the mostly often used by operators. Total number of these machines in operation is 236 or 35% of all currently installed and working bitcoin machines.
Lamassu bitcoin ATM
This bitcoin ATM was previously the most popular, however, moved to second place after leading of Genesis Coin machines. Lamassu is known for its easy bitcoin purchase process in 15 seconds. Mostly these machines support buying bitcoins only. There are 164 Lamassu machines worldwide (24.3% of total).
Lamassu with Santo Tirso
With additional Santo Tirso floor stand, which has cash dispenser, Lamassu bitcoin ATM becomes a two-way machine and you can sell bitcoins for cash at these machines.
BATM2 bitcoin ATM
This is a second generation model from General Bytes bitcoin ATM manufacturer which allows buying bitcoins only. First generation model was BATM1 — looking the same (but w/o fingerprint scanner). This is quite a compact model with 57 machines worldwide currently in operation (8.4% of all).
BATM3 bitcoin ATM
This is a two-way model from General Bytes launched in beginning of the 2015. Machine allows to buy and sell bitcoins for cash.
There are currently 20 BATM3 machines in the world (3% of total amount).
BitAccess bitcoin ATM
This is a bitcoin ATM produced by a Canadian company. Usually it supports buy and sell bitcoins operations.
It is quite broadly installed with 62 locations worldwide (9.2% of total).
BitXatm bitcoin machine
This bitcoin machine is produced by a German company and is used mostly in Europe. It allows both buy and sell bitcoin operations and can also serve as a POS terminal in a restaurant or other business. There are 32 locations currently which use these machines (4.7%).
Robocoin kiosk
This is a bitcoin ATM of a company which is not supplying machines anymore. However, there are several machines still left on the market. They are mostly switched to operating using General Bytes software, which means kiosk looks similar, but the UI is from General Bytes. There are several machines running on BitAccess, Lamassu, or custom developed software. Totally there are 37 machines (5.5%).
Skyhook bitcoin machine
This is most compact bitcoin ATM that was broadly used on the market. However, the company producing it abandoned the market a while ago, and number of these machines diminishing due to lack of support and unreliable software. There are currently still 30 machines running (4.4%).
These are the main types of bitcoin ATMs currently used on the market. Altogether they comprise 95% of all locations worldwide.
How to use a bitcoin ATM
The process of buying and selling bitcoins using these machines may vary depending on machine type and also settings operator defined for a particular machine. There are two detailed tutorials available with videos demonstrating the buy and sell bitcoins process for different machines:
In case you used a wallet generated by a machine, here is a description how to obtain those bitcoins to your wallet:
In short, both processes can by summarized in the following lists.
Buy bitcoins at an ATM process
First time usage:
- Choose language and initiate the process (press “Start” or similar).
- Choose “Buy bitcoins” if machine also supports sell bitcoin transactions.
- Choose amount (optional, defines the verification steps for you).
- Enter mobile number (in case required), receive SMS code and enter it.
- Scan ID doc (in case required) — usually only for large amounts.
- Choose whether you already have a Bitcoin wallet (yes — scan it later, no — generate and print new one).
- Scan QR code.
- Insert cash bills.
- Click “Send” or similar to finalize a transaction.
- Get receipt or provide email to get notified about successful transaction.
Phone verification and ID scan might be not required and it depends on the machine and operator.
Also some machines, like Lamassu for example don’t print receipts, that means you are required to have your own bitcoin address QR code (generated within your wallet) prior to using a machine.
Other visits:
As you are already a registered user you don’t need to go through verifications every time. Normally you start the process by entering a phone and getting a code, which you enter on the screen. If you scanned ID before — that will automatically get associated with your new purchase.
Sell bitcoins at an ATM process
Selling bitcoins is usually more strict with respect to verification. They are done in a similar way as for buy process and are required only to be done once.
Standard process is usually:
- Choose a language and initiate the process (press “Start” or similar).
- Choose “Sell bitcoins”.
- Choose amount (optional, defines the verification steps for you).
- Enter mobile number (in case required), receive SMS code and enter it.
- Scan ID doc (in case required) — usually only for large amounts.
- Define amount of fiat currency you’d like to receive in cash.
- ATM will provide a QR code where bitcoins to be sent with require amount of bitcoins.
- Use your wallet and send bitcoins.
- You will get cash out immediately (if operator set 0-confirmation acceptance, which might be for small amounts) or you will get a receipt printed with redeem code, and you need to wait for 1 or 2 confirmations depending on requirement.
- Come to machine later and start the process with “Redeem code” and scan a code from your receipt.
- Machine will dispense cash.
Some services like the one from BitAccess allow to initiate selling of bitcoins remotely. That means you don’t need to come to machine twice. You can send bitcoins from any place, e.g. from home, and only when your bitcoins delivered and confirmed (you normally receive an SMS) you visit closest bitcoin ATM and withdraw cash.
