If you’ve fallen down the rabbit hole, you know that Bitcoin matters for everyone’s future.
Yet, even now, over a decade since Bitcoin was released into the world, many newcomers are confused as to how to start buying Bitcoin or “stacking sats” as the phrase goes.
Do you know how to use a Bitcoin ATM? You’ve likely seen a few here and there in your town but aren’t sure of how to get started with them.
Here’s our comprehensive Bitcoin ATM guide:
Buying and Holding Bitcoin
Before you start buying Bitcoin you need to know why Bitcoin has become so popular.
One major reason is that you can control your Bitcoin which you can’t with fiat currencies.
When you hold your Bitcoin you are in complete control of it. This is in complete contrast to fiat currencies that are in custody by your bank and manipulated by your central bank.
With Bitcoin, there are 3 methods for buying and holding Bitcoin. They are:
- Crypto exchanges
- Hardware wallets
- Paper wallets
The latter is what you’ll get when you use a Bitcoin ATM machine.
However, let’s first study the first two before we delve into why a Bitcoin ATM is the best option.
Crypto Exchange
This is the most popular method for buying Bitcoin. You’ll create an account on the crypto exchange and connect your payment method(s). Your payment method can include the following:
- Bank account
- Credit card
- Debit card
- Payment authorizer (PayPal, etc.)
- Gift cards
After you buy your Bitcoin it’ll get stored in your wallet associated with your account. Using the crypto exchange you can also send, sell, trade, and make purchases with your Bitcoin.
This is, by far, the most convenient method for buying and holding Bitcoin. That’s precisely why you should avoid it at all costs!
This convenience should not be traded for your freedom. The whole point of Bitcoin is that you’ll have more freedom and control over your money.
Physical Wallet
Another option is a physical wallet also known as a hardware wallet. This is a small device that can fit into your pocket. Within this small device, you’ll hold all your Bitcoin.
Unlike a crypto exchange, you’ll hold full custody of your Bitcoin. This means that your Bitcoin isn’t susceptible to government theft. While hardware wallets can get hacked it’s a lot harder compared to crypto exchanges.
The main thing that turns off potential investors from hardware wallets is that it requires more work on your end. You’ll have to know how to send and receive Bitcoin as well as how to recover your Bitcoin.
You’ll need to know your public and private keys, your recovery phrase, as well as your PIN code. The company that provides your hardware wallet won’t be able to help you recover any lost Bitcoin either.
It seemed for the longest time that this was the best way to buy and hold Bitcoin.
But the fact is, most of the population prefers convenience, so they’ll opt for the ease of a crypto exchange.
But then does this mean that they’ll just allow a crypto exchange to have custody over their coins? Will they always be at the mercy of what local governments want?
Luckily, there is a third option that offers convenience without having to sacrifice freedom.
Paper Wallets
A paper wallet is a wallet that you receive from a Bitcoin ATM machine.
On this paper wallet, your wallet’s credentials are stated.
This includes the private key, public key, and the amount of Bitcoin stored on it.
This is much easier to hide and protect compared to a hardware wallet. Since it’s not in digitized form, hackers can’t break into your paper wallet and governments can’t spy on them.
Now let’s look at buying Bitcoin from a Bitcoin ATM.
What to Know About Buying and Using Bitcoin
Before you head to the closest Bitcoin, which you can find at bytefederal.com, you want to learn a few requirements regarding buying Bitcoin.
Your first step is to always study the laws regulating Bitcoin in your jurisdiction.
Make sure you know if you have to report any Bitcoin transactions before you become a regular at your Bitcoin ATM.
Here’s what else you should know about buying from your Bitcoin ATM machine.
Bitcoin Is Almost Anonymous
One of the biggest advantages of Bitcoin is that you can be anonymous with your transactions. All Bitcoin transactions will get saved and recorded on a public ledger.
However, this ledger will not showcase your identity.
So if Bob sends Bojan 1 Bitcoin it’ll show:
‘Wallet fhuaef7a79’ sent 1 Bitcoin to ‘Wallet fnaw9efh9’
rather than showing the names of the wallet owners.
When you purchase Bitcoin or make any transaction using a Bitcoin ATM, it’ll be anonymous in most cases. Some Bitcoin ATMs might want you to provide data such as your name, ID card, etc.
This data might get shared with other authorities and can potentially get hacked.
However, in most cases, a Bitcoin ATM won’t ask for any KYC details and this is one of its biggest appeal factors.
How Much Does It Cost to Use a Bitcoin ATM Machine?
Each Bitcoin ATM brand will offer differing limits on how much Bitcoin you can buy at a time. The local laws of your jurisdiction might also put certain restrictions.
While you can buy fractional shares of Bitcoin, this might not work with a Bitcoin ATM machine. It’s unlikely that they’ll let you buy Bitcoin with $1 or $2. You might need at least $20 to complete a transaction.
Also, remember that most Bitcoin ATMs only accept cash. You won’t be able to use your credit card or debit card to buy Bitcoin using the ATM.
Some Bitcoin ATM machines will allow larger amounts of cash to get used. But these depend greatly on your local laws.
How Long Is the Process With Bitcoin ATMs?
Next, you want to know how long it’ll take for you to conduct a transaction using a Bitcoin ATM.
If you simply wish to buy Bitcoin then it’ll only take one minute. You’ll follow the on-screen instructions to specify how much Bitcoin you wish to buy. You’ll then deposit the cash into the ATM and after confirming the transaction you’ll receive the paper wallet printed out.
If you wish to send Bitcoin payments using a Bitcoin ATM then the transaction will also take about a minute. You’ll just have to have the recipient’s Bitcoin public key available to conduct it.
However, it’s the blockchain that handles the transaction and this can take longer depending on the amount that you send.
In most cases, a Bitcoin transaction won’t take over 10 minutes. However, if you send a much larger amount of Bitcoin it can take an hour.
Once the Bitcoin ATM completes its work then you won’t need to use it anymore to send your Bitcoin. You have to wait for the blockchain to complete its work which happens outside the realm of the Bitcoin ATM.
Can I Recover My Bitcoin Via the Bitcoin ATM Machine?
The Bitcoin ATM doesn’t store Bitcoin inside it as Bitcoins are always stored on the blockchain. This means that no one can help you recover your Bitcoin.
You’ll receive a recovery phrase that lets you recover your Bitcoin from your paper wallet. This is needed in case you forget your public and private keys.
However, if you lose this recovery phrase then the Bitcoin ATM machine provider can’t help you. While this is an inconvenience, this also means that even the Bitcoin ATM machine can’t access your Bitcoin.
Best Practices for Buying and Using Bitcoin
Let’s now look at some of the best practices you’ll have to know about buying and using Bitcoin.
You want to first understand the local laws regarding using Bitcoin. You might have to report any Bitcoin you own. You might also have to keep records of any Bitcoin transaction.
For the latter, you might have records of your transactions saved on your account with the Bitcoin ATM.
In the event that the Bitcoin ATM doesn’t save these records make sure you keep these records for yourself. You might have to share such records when you complete your tax forms.
Make sure you also research the prices of Bitcoin before you visit the Bitcoin ATM.
Prices can change sharply so you want to ensure that you have as enough cash as possible.
You want to also keep track of your paper wallet at all times. With a Bitcoin ATM, you won’t be able to recover your Bitcoin if you lose the paper wallet.
The paper wallet will contain all the information needed to keep track of and access your Bitcoin.
How Does a Bitcoin ATM Work?
So, how does a Bitcoin ATM help you buy Bitcoin and conduct transactions with it?
As mentioned earlier, the Bitcoin ATM doesn’t store any Bitcoin. It simply serves as a medium to help you store your Bitcoin and make transactions with it.
It operates in the same manner that a crypto exchange would but it doesn’t own your Bitcoin. You own sole custody of your Bitcoin and are in complete control of it.
In some cases, you’ll have to first create an account to use a Bitcoin ATM. Some will allow you to create the account using the ATM itself while others will require you to make it on a website first.
Once you’ve made the account you can start using the Bitcoin ATM. Some Bitcoin ATMs allow anyone to use them without having to make an account first.
As your account isn’t saved to one Bitcoin ATM you can use any Bitcoin ATM in your area. If the Bitcoin ATM is tied to your account then you must use one of the same brand.
If you use a Bitcoin ATM of a different brand then you’ll be given a brand-new paper wallet. You can always transfer your Bitcoin to one paper wallet. But for ease of use, it’s always best to stick to using one Bitcoin ATM.
Precautions to Take
Let’s wrap up by looking at the precautions you should take when using a Bitcoin ATM.
First, let’s look at guarding your privacy.
While it’s up to you how much information to add, you can shop around to find a Bitcoin ATM that requests as little information as possible for KYC regulations. This helps you protect your privacy.
Some Bitcoin ATMs might have CCTV cameras built-in. These are ideal for protecting you in case you get robbed.
Some Bitcoiners, however, adopt a disguise when using them to protect their privacy. This is becoming commonplace in countries with totalitarian governments.
As mentioned earlier, Bitcoin ATMs are often in more secure locations. However, you want to research the neighborhood where a Bitcoin ATM is located in case you aren’t familiar with it.
Make sure you also store your paper wallets carefully. They can’t get recovered so you want to keep them concealed where others can’t find them. It’s best not to try to digitize your paper wallets.
Digital files can get hacked much easier and then these hackers can then access your Bitcoin wallet and conduct transactions with it. You also have to remember that Bitcoin ATMs operate on electricity and the internet.
If you’re in an area with poor weather conditions, you might want to hold off on using a Bitcoin ATM.
If the power fails, then you might lose your cash and the transaction can get canceled during the process!
That’s How to Use a Bitcoin ATM
Now you know how to use a Bitcoin ATM and you can now start building your Bitcoin portfolio.
You want to focus on using a Bitcoin ATM machine rather than a crypto exchange or hardware wallet. Make sure you study your local laws before investing in Bitcoin.
You have to pay in cash, and you’ll have to research how much cash you can use. Make sure you take precautions, so you never lose your Bitcoin during a transaction.
Please share this Bitcoin ATM guide with other Bitcoiners, old and new.
You can read more great content about buying and using Bitcoin and other finance-related articles on our blog.