Bitcoin ATM (BTM)

A Bitcoin ATM (BTM) is an ATM machine that lets you buy and sell Bitcoin (BTC), transfer Bitcoin (BTC) to someone else, and some even let you sell Bitcoin (BTC) and withdraw cash. Surprise!

A Bitcoin ATM is very similar to a traditional bank ATM, in that you can deposit and withdraw fiat money.

To buy Bitcoin,

You put money into the BTM.
You then enter or scan your cryptocurrency wallet address from your wallet app. Sometimes a QR code is used to make this easier.
The BTM calculates any fees, converts your cash to a cryptocurrency of your choosing, and then sends the digital asset to your wallet.

To sell Bitcoin,

You send Bitcoin from your digital wallet to the address provided as a QR code by the BTM
Simple!

However, you only deposit money into a BTM when you’re interested in buying Bitcoin. Withdrawals of cash require you to first sell your Bitcoin.

Bitcoin ATMs, like their banking counterparts, are connected to a financial network.

In this case, the BTMs are connected to the Bitcoin network. The connection is needed in order to facilitate the buying or selling of BTC.

In the U.S., Bitcoin ATMs are federally regulated by FinCEN. the Financial Crimes Enforcement Network, which operates under the U.S. Department of the Treasury.

They monitor financial networks, including Bitcoin, for money laundering and other financial crimes.

While Bitcoin is often thought to be completely anonymous, if you want to use a BTM, you’ll need to give up some personal information.

In the U.S., at minimum, you’ll need to provide a mobile phone number if your transaction amount stays below a certain amount.

If you go above this amount, you may be required to provide an email address or a copy of a government-issued ID, such as a driver’s license or passport.

Most BTMs in countries that regulate financial markets, like the U.S., have a minimum purchase amount (USD $20) and daily purchase and withdrawal limits (USD $10,000).

The daily limits are put into place because of anti-money-laundering (AML) regulations.

The most important aspects of using a Bitcoin ATM are that you:

DYOR on the company that owns the BTM. Don’t use the BTM if you haven’t researched the company to the point that you would trust it with your money
Confirm the service fees charged by the BTM to complete your transaction. Service fees can range anywhere from 5% to 25% of the total transaction amount. If you want to buy USD $100 worth of Bitcoin, if could actually cost you USD $125 to do it at the BTM!
Some BTMs let you use your bank debit card to buy Bitcoin. Again, DYOR on the company operating the BTM. There’s always a chance that the BTM has been compromised and could steal your bank account number and PIN.

Related Terms

Wallet

Made up of a unique public address called your public key (similar to your bank account number) that you can share with the world, your friends, family, and other businesses and companies that you trust, to send and receive digital assets. A wallet also stores a private key (much like the PIN that you use to access your bank account at the ATM), which, when combined with the public key, confirms ownership of the wallet, and allows you as the wallet owner to view the digital record of your wallet transactions, and allows you to perform actions such as buying, selling, withdrawing, and swapping funds.

Network Fee

A fee you pay to a blockchain network for transferring a digital asset on that network. The fees go to the miners or validators of that blockchain network who win the right or are chosen by the validation mechanism to ultimately confirm your transactions and add to the blockchain.

Bitcoin (BTC)

Bitcoin (BTC) is most well known as a digital decentralized cryptocurrency, without a central bank or single administrator, that can be sent from user to user on the peer-to-peer Bitcoin network without the need for intermediaries, such as payment gateways or banks or routing services. Think of bitcoin as Internet money, that you can send and receive directly, to and from anyone, and you can use it to pay for stuff.

Desktop Wallet

A common type of crypto wallet used to securely store and manage your private keys on a computer hard drive. They’re considered more secure than web-based wallets, since you can only access them from wherever your computer is located, and again, you control your private keys.

Transaction Fee

Fees charged by a blockchain network to execute and validate transactions on that blockchain network. Fees are used to incentivize miners to complete complex and expensive cryptographic problems to validate transaction blocks to the leger of a blockchain.