Introduction
Bitcoin ATMs are amazing, they represent one of the giant leaps of Bitcoin and other cryptocurrencies toward mass adoption. We will explore some of the basics you need to know about Bitcoins in this blog post. And if you do choose to use one – the things you need to be aware of to get the best of it and to stay safe.
The first public Bitcoin ATM appeared as far back as November 2013, at a coffee shop in Vancouver Canada. And so far, it has become more popular. Bitcoin ATMs are a direct means to convert your fiat currencies to Bitcoin. It is a convenient entry point for many into the world of cryptocurrencies.
According to Coinatmradar.com, there are currently over 39,000 Bitcoin ATMs globally with almost 90 percent domiciled in the United States alone. The trend for new installations has continued to grow as many cities tend towards being crypto-friendly.
Bitcoin ATMs offer the unique advantage of being a very convenient way to purchase with physical cash. It is also a fun way to buy crypto considering how far crypto use has evolved.
While these are all positive markers for a better general acceptance of Bitcoin and crypto in general, some issues need to be addressed. These are ;
1. Bitcoin ATM Transaction Fees
The Bitcoin ATM (or BTM as it is sometimes called) fees can be outrageously high. It typically ranges from 7- 30 percent of the total cost of purchase. That means you might get as low as $700 worth of Bitcoin for every $1000 bill you sloth into the Bitcoin ATM. Compare that to the typical 1-3 percent charge you might get if you were to make the same purchase from a crypto exchange using your credit/debit cards.
The justification for this tends to be that there are additional responsibilities that are borne by the operators of such machines e.g. cash handling and security.
2. Loss of Anonymity and Privacy
It was originally thought that you could go fully anonymous using such Bitcoin ATM services. It was conceived that since you could make payments using physical cash, one could bypass the direct interference from banks and the government. However regulatory requirements have removed such anonymity.
Many Bitcoin ATMs particularly those in the US will often require you to set up a user profile before you can use the Bitcoin ATM.
Setting up a user profile will require you to disclose your name, phone number, and a valid ID card. So you really cannot stay off the grid when you make use of a Bitcoin ATM. You still leave some trails behind. If privacy is of huge concern to you (which may be very legitimate), you may want to consider options.
3. Negative Attention From Scammers
While this is not essentially a Bitcoin ATM problem, its use by scammers constitutes a growing cause for concern. The FBI has warned that Bitcoin ATM is becoming a preferred method of receiving payments from scammers. The fact that Bitcoin is very efficient for international remittances also makes it a tool for scammers overseas.
The US Federal Trade Commission also issued a public warning as regard this earlier in January 2022. Telling people of the potential of being a victim of a scam through this means.
Stay vigilant!
Conclusions
Bitcoin ATMs have a lot of benefits to the crypto community and the public in general. It provides an alternative means of effecting payments. Excellent for converting cash into cryptocurrency and for International Remittances. It has the added benefit of being convenient and easy to use.
Besides the benefits of Bitcoin ATMs, you should also be aware of the Privacy concerns, the high fees, and the prevalence of its uses to perpetuate scams.
Chart Credit: https://coinatmradar.com/charts/growth/
