How to use a bitcoin ATM and where to find one

There are several ways to buy cryptocurrency. The traditional and convenient option is through an online exchange (CEX, Binance). Trading platforms after registration allow you to replenish the balance through electronic payment systems or with a plastic card with the subsequent exchange of fiat to digital currency. If you need to buy virtual coins for cash, a good solution is to find a bitcoin ATM. Blockchain technology continues to attract new customers because of the ability to transfer money with low fees and cash out anywhere in the world.

Features of cryptocurrency ATMs

Such terminals differ little from conventional ATMs and allow you to buy bitcoin for cash online. With their help, BTC becomes more widespread, since for many users it is much more convenient to work with it than with an exchange on the Internet. An ATM with cryptocurrency often gives the opportunity to only buy digital money without selling it in exchange for cash.

What is a cryptomat and why it is needed

A terminal for buying digital coins for cash allows you to exchange not only Bitcoin and Ethereum, but also other altcoins at exchange prices. After confirming the transaction with the phone (one-time from SMS or QR code), the virtual currency is transferred to the user’s wallet. It is not everywhere possible to sell koins via ATM in exchange for cash.

Principle of operation

Bitcoin ATMs are devices that perform the functions of payment terminals and currency exchange offices connected to the Internet.

The purchase begins by sending information to the system, which stores data on the size of the asset on the balance. If the required amount is present on the service account, a QR code with the wallet address is displayed.

Provided the user agrees with the exchange rate, cash is deposited. After confirming the received amount, the ATM sells Bitcoin.

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The operation of buying cryptocurrency through a Bitcoin terminal includes the following actions:

1. Depositing cash.
2. Selecting the cryptocurrency to be purchased.
3. Entering the wallet address.

In some crypto-machines you have to go through a confirmation procedure from scanning a QR code with your phone to reading your fingerprint (the latter function is used, for example, in Genesis Coin machines).

Commissions

The amount of fees that the user pays for using the device is quite high. As of 2021, Bitcoin ATM charges on average about 6% of the transaction amount. The size of the commission depends on the presence of exchangers of other operators nearby. If there are none, the client can give up to 10%.

Cash withdrawal

Not all crypto ATMs can exchange digital assets for fiat money. There are 2 types of terminals:

• 1-way ATM – Bitcoin can only be purchased.
• 2-way ATMs that allow you to buy and sell coins.

The cost of the transaction is determined by the current confirmed price on the crypto exchange. Some ATMs get exchange rates from multiple sources. And the customer has the right to choose which one to conduct the transaction at.

Regulation

The main regulatory act in the jurisdiction of the Russian Federation is Law No. 259-F3 “On digital financial assets, digital currency”. It came into effect on January 1, 2021.

According to Article 4 “Accounting and Circulation of Digital Financial Assets”, persons who are not investors (without a license from the Central Bank of the Russian Federation) can buy cryptocurrency within the limit of 600 thousand rubles per year (the Central Bank’s decree No. 5635-U set a limit on the amount of transactions).

The law also provides for the regulation of mining and the rules for issuing digital money in Russia.

When opening a wallet, the procedure for confirming the owner’s identity has become mandatory. Responsibility for providing information to the control authorities is also introduced.

How to find a cryptomat

Exchange machines are installed in passable places: near metro stations, in large shopping centers.

The location of ATMs can be viewed using the Coin ATM Radar service. It helps you find the nearest one to the client. The site will also help you when traveling: the developers maintain up-to-date information about all cryptomats installed in the world.

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Author: Saifedean Ammous, an expert in cryptocurrency economics.