Bitcoin ATMs: What they are and how to use them

When the first Bitcoin ATM was installed at a café in Vancouver in October 2013, it was a novelty – one of the first real-world bridges between cash and crypto. Fast-forward to today, and Bitcoin ATMs are everywhere, with more than 38,000 machines operating across nearly 70 countries and six continents.

As cryptocurrency becomes more mainstream, the gap between traditional finance and digital assets is narrowing. Bitcoin ATMs are helping bridge that gap, giving people an easy way to buy and sell Bitcoin (BTC) with cash – similar to using a regular ATM for withdrawals or deposits. For those who want a simple, familiar way to interact with crypto without relying on an online exchange, Bitcoin ATMs offer just that.

In this guide, we’ll explain how to use a Bitcoin ATM, from finding a machine to completing a transaction, so you know exactly what to expect whether you're using one to buy, send, or sell BTC.

What is a Bitcoin ATM? 

A Bitcoin ATM is a physical teller machine that lets users buy Bitcoin (BTC) with cash or debit cards. Unlike traditional ATMs that connect to banks, Bitcoin ATMs process transactions directly on the blockchain, typically requiring users to scan a QR code from their crypto wallet to send or receive funds.

Some Bitcoin ATMs are buy-only, allowing users to purchase BTC and transfer it to their wallet. Others support selling Bitcoin for cash, while two-way machines offer both options in one device. Many also support additional cryptocurrencies like Ethereum (ETH) and Litecoin (LTC).

Bitcoin ATMs vs. traditional fiat ATMs

At first, Bitcoin ATMs and traditional bank ATMs seem similar, but they actually function very differently. A Bitcoin ATM connects to the blockchain, allowing users to trade BTC without a bank account or an online exchange login. In contrast, a traditional ATM is linked to a checking and/or savings account, allowing withdrawals, deposits, and balance checks.

Beyond their core functions, Bitcoin ATMs and traditional ATMs also differ in security measures and transaction speeds. Bitcoin ATMs often require identity verification, such as a phone number, government-issued ID, or even biometric data, depending on compliance regulations. Traditional ATMs, on the other hand, typically rely on a debit or credit card and a PIN for access.

Transaction speed is another major difference. Bitcoin ATM transactions can take 10 minutes to an hour, depending on blockchain congestion, while traditional ATM transactions are nearly instant since they process through banking networks rather than a decentralized blockchain.

How does a Bitcoin ATM work?

Unlike traditional ATMs that connect to banks, Bitcoin ATMs operate on the blockchain. Depending on the machine, transactions may be processed through a centralized exchange or directly on the Bitcoin network, based on the operator’s setup.

To meet anti-money laundering (AML) regulations, Bitcoin ATMs typically require know-your-customer (KYC) verification that can vary depending on the transaction size. For smaller transactions, a phone number might be enough for verification. Larger purchases, however, usually require a government-issued ID or even biometric authentication.

Security doesn’t stop at identity checks. Bitcoin ATM operators constantly monitor their machines for unusual activity, such as multiple failed login attempts, abnormally large transactions, or rapid repeat purchases – all of which could signal fraud.

To further protect users, encryption secures transaction data, keeping sensitive information safe during the process. (That said, Bitcoin transactions aren’t entirely private. Since every transfer is recorded on a public blockchain, anyone can track wallet addresses, spot patterns, and analyze metadata – even if there’s no direct link to a person’s real-world identity.)

How to use a Bitcoin ATM

Using a Bitcoin ATM is fairly straightforward, though the exact steps may vary by machine and operator. To start, use the official directory on Bitcoin’s website or another website or mobile app like Coin ATM Radar to find a Bitcoin ATM. Once you’ve located one, here’s a general breakdown of how the process typically works:

How to buy or send BTC using a Bitcoin ATM

1. Start the transaction: Once at the ATM, select the option to buy Bitcoin. Some machines may require you to indicate that you’re depositing cash for crypto.
2. Verify your identity: Depending on the transaction amount and the machine’s security settings, you’ll need to verify your identity, usually using your phone number or a government-issued photo ID like a passport or driver license. For phone verification, you’ll enter your phone number and confirm the code sent via SMS. Otherwise, you’ll scan your photo ID using the kiosk’s camera.
3. Provide the wallet address: If you’re buying BTC, enter your wallet address. If you’re sending BTC to another person, enter the recipient’s wallet address. The easiest way to do this is by scanning the wallet’s QR code. You can also manually enter the address but double-check to make sure it’s correct. 
4. Deposit cash: Insert the amount of cash you want to convert into Bitcoin.
5. Confirm and finalize the transaction: Review the details and finalize the purchase. Since Bitcoin transactions are irreversible, most ATMs will ask you to confirm before processing.

How to sell BTC for cash using a Bitcoin ATM

Withdrawing cash from a Bitcoin ATM is a bit more involved than using one to buy BTC, but the process is still manageable. Also, not all Bitcoin ATMs support cash withdrawals, so make sure to find one that does. Coin ATM Radar lets you filter machines by whether they allow buying, selling, or both.

Like buying or sending BTC, the exact steps may vary depending on the machine and operator, but here’s a general breakdown of how it works:

1. Start the transaction: Select the option to sell Bitcoin or withdraw cash. Choose the cryptocurrency you want to exchange and enter the amount of fiat currency you’d like to receive.
2. Verify your identity: Depending on the transaction amount and the machine’s requirements, you may need to enter your phone number and confirm a code sent via SMS or scan a government-issued ID using the ATM’s camera.
3. Send Bitcoin to the ATM: The ATM will generate a QR code with its wallet address and the exact amount of BTC required. Open your Bitcoin wallet and send the requested amount to complete the transaction.
4. Check the exchange rate and fees: Some machines have transaction fees, and their crypto-to-cash conversion rates update frequently. Always check the details before confirming your transaction.
5. Wait for confirmation: Bitcoin transactions aren’t instant. The machine will wait for the network to confirm the transfer, which could take anywhere from a few minutes to over an hour, depending on blockchain congestion.
6. Collect your cash: Once the transaction is verified, the ATM will dispense your fiat currency.

Bitcoin ATM pros and cons

Bitcoin ATMs make it easy to buy, sell, and send BTC, but whether they’re the right choice for you depends on your needs. Here’s a closer look at their pros and cons.

Pros

• Privacy and accessibility: Unlike online exchanges, Bitcoin ATMs let you use cash to buy and sell crypto, which can be useful if you prefer to avoid traditional banking. However, larger transactions require KYC verification, so they don’t offer full anonymity.
• Easy to use: If you’ve used a regular ATM, you’ll feel right at home. The process is straightforward, with QR code scanning and real-time exchange rates helping to keep things simple.
• Security and convenience: Bitcoin ATMs use encryption to protect transactions and are often placed in busy areas, which can help deter tampering or theft.

Cons

• Limited availability: There are around 38,000 Bitcoin ATMs worldwide, but most are in North America. If you’re in another region, finding one might not be easy.
• Transaction limits and downtime: Many Bitcoin ATMs have cash withdrawal and deposit limits, and they can run out of money or go offline for maintenance.
• Higher fees: Using a Bitcoin ATM isn’t usually the most cost-effective way to buy, send, or sell BTC. Fees typically range from 7% to 20%, much higher than online exchanges. Since conversion rates change often, the amount you get in cash or crypto can vary.

CoinTracker: The easy way to report your crypto transactions

Bitcoin ATMs offer a convenient way to buy, sell, and transfer BTC. But whether you're using cash or digital platforms, keeping track of your crypto transactions is key – especially when tax season rolls around.

CoinTracker makes it easy to accurately log Bitcoin ATM transactions alongside the rest of your crypto activity. With integrations across 500+ exchanges, wallets, and NFTs, plus support for 23,000+ DeFi smart contracts, CoinTracker automatically syncs your portfolio, tracks gains and losses, and generates IRS-compliant reports. Whether you file with TurboTax, H&R Block, or a CPA, CoinTracker takes care of everything you need to file in minutes.

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Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.