Bitcoin ATMs have been around for a while now, but the first one was only installed in 2015. Today there are over 23,000 Bitcoin ATM locations worldwide, and they’re becoming more popular as time goes on. With that being said, crypto exchanges are still the primary way to buy cryptocurrencies with fiat currency (i.e., USD or EUR). This article will compare both options for convenience’s sake and list a few pros and cons of using Bitcoin ATMs.
What is a Bitcoin ATM?
A Bitcoin ATM is a physical machine that allows you to buy and sell cryptocurrencies like Bitcoin for fiat currency. They’re essentially just like regular ATMs, but they will enable you to exchange your cash for digital currencies instead of withdrawing money.
How does it work?
- Insert cash into the machine. The ATM will then tell you how much Bitcoin it can sell or give you based on your payment amount and any exchange rates that may be in effect at the time.
- You send a request to move money from your bank account – either directly through an electronic funds transfer (EFT) or wire transfer or by loading a debit card with funds.
- After the transaction has been confirmed on the blockchain and your bank account is debited for the appropriate amount of money in fiat currency (i.e., dollars), you’ll receive an equivalent value worth of Bitcoin to your existing wallet.
Bitcoin ATMs(BATMs) are the perfect solution for people new to cryptocurrencies and haven’t yet set up a crypto wallet or don’t want to use one. They’re convenient because you can buy Bitcoin right there at the ATM in cash form.
Pros of using a Bitcoin ATM
The benefits of using a Bitcoin ATM include:
- Convenience: You can buy cryptocurrencies right there at the ATM. It’s as easy as buying a pack of cigarettes or gum, but it allows you to purchase digital currency instead!
- Privacy: Some people don’t like using cryptocurrency exchanges because they have to create an account and link their bank accounts/credit cards with them to use them. However, using a Bitcoin ATM doesn’t require any personal information or anything like that – you can keep your identity private and just make all of the transactions anonymously in cash form!
- Safety: Buying cryptocurrencies from an exchange means first wire money. If somebody steals your credentials while doing this, they can steal everything in your account – including your cryptocurrencies. With a Bitcoin ATM, you only need to insert cash into the machine and enter some PIN code or passphrase (if there’s an error with the transaction) before sending funds from your bank account. This also means that nobody else can steal your money if they manage to get hold of your key because it’s physically not possible to do so.
Cons of using a Bitcoin ATM
The downsides of using Bitcoin ATMs include:
- Limited selection: Not all Bitcoin ATMs allow you to buy other cryptocurrencies like Ethereum or Litecoin. In fact, most of them only allow you to purchase Bitcoin. So if you’re looking to invest in other digital currencies, your only option might be an exchange.
- Higher fees: Most Bitcoin ATMs have higher fees than regular exchanges do. For example, an ATM may charge you a fee of around five to six percent for buying Bitcoin through it. Exchanges usually have fees that are lower than this – some exchanges even offer free trades!
What is a Crypto Exchange?
A crypto exchange is a website where you can buy, sell, and trade cryptocurrencies like Bitcoin. They usually have more options than Bitcoin ATMs when it comes to purchasing different coins, and they also offer services like margin trading and futures contracts.
Crypto exchanges also allow you to buy cryptocurrencies with fiat currency, but the process is a bit more complicated than using a Bitcoin ATM. You’ll need to create an account on the exchange, deposit fiat currency into that account, and then purchase the desired amount of cryptocurrency.
How it works
- You create an account on the exchange and deposit fiat currency (i.e., USD, EUR) into that account.
- Once the funds have been verified, you can purchase the desired amount of cryptocurrency with your deposited fiat currency.
- The purchased cryptocurrency is then stored in your account on the exchange
Pros of using a crypto exchange
The benefits of using an exchange include:
- Variety and convenience: Crypto exchanges allow you to buy cryptocurrencies with fiat currency, which gives you more flexibility when it comes to buying different types of coins. They also offer other services like margin trading, futures contracts, etc., so they’re much better than Bitcoin ATMs when it comes to variety.
- Security: Exchanges usually have better security measures in place than Bitcoin ATMs do. This includes things like two-factor authentication and email confirmations for withdrawals.
Cons of using a crypto exchange
The major downside to exchanges is that they are more complex and require you to do some work before using them. For example, you’ll have to verify your identity with the exchange if it’s required by law for the exchange to function properly (and comply with AML/KYC laws).
How Do Bitcoin ATMs Compare to Crypto Exchanges?
Overall, Bitcoin ATMs are a lot simpler to use than crypto exchanges. They don’t require any personal information or anything like that – you can keep your identity private and just make all of the transactions anonymously in cash form!
However, crypto exchanges have a lot more options for buying and selling different types of cryptocurrencies. They also offer other services, unlike Bitcoin ATMs, which only allow you to buy or sell BTC for fiat currency.
BATMs excel in terms of convenience – they’re straightforward to use, and you don’t need any prior knowledge about cryptocurrencies or exchanges to start using them, compared to crypto exchanges. Crypto exchanges are more suitable for people who want to invest in a broader range of cryptocurrencies and have some experience with trading.
So, if you’re looking for convenience and don’t care about having a lot of options when it comes to buying different types of coins, Bitcoin ATMs would be the better choice for you. If you want to have more options and don’t mind doing some work before you can start using the exchange, then crypto exchanges would be a better choice.
In conclusion, Bitcoin ATMs are simpler to use but lack the variety that crypto exchanges offer, while crypto exchanges are more complex to use but have a broader range of options. With this information, you are better positioned to decide which option is best for you, depending on your needs and experience.
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