One of the challenges that hinder the mainstream adoption of cryptocurrencies is the difficulty of using them as alternatives to cash for day-to-day transactions. Unless customers can use the BTC in their digital wallets in lieu of cash, these cryptos remain practically useless. But technology today is paving the way for its mainstream use through crypto cards and crypto ATMs.
If you aren’t tech-savvy but you want to enter the crypto market, you can turn to Bitcoin ATMs. They serve as an alternative to fiat-to-crypto exchanges like Coinbase, enabling you to buy and sell cryptocurrency with ease and convenience.
Bitcoin ATMs simplify everything for you, and they make cryptocurrency more accessible. Like any technological innovation, they come with several advantages, all of which you will be learning today.
What is a Bitcoin ATM Machine?
Bitcoin ATMs or Bitcoin Teller Machines make everything more convenient for cryptocurrency investors. They look like your regular ATMs that dispense cash, but they aren’t linked to your bank accounts or any traditional financial institution for that matter. These kiosks connect you to an exchange where your Bitcoin transactions take place. Through a Bitcoin ATM, you can buy Bitcoin and other cryptocurrencies using fiat money. Depending on the machine, you may also be able to sell cryptos.
Most of these ATMs will require you to present an ID or use crypto cards when you’re buying cryptos. Others would require a phone number. Ultimately, these security measures depend on the machine and the operator.
How Does a Bitcoin ATM Work?
One of the advantages of using a Bitcoin ATM instead of crypto exchanges is privacy. You are often asked to verify your complete identity to be able to trade through these trading platforms. Regardless of the amount you wish to transact, you are required to reveal personal information. Some platforms even require users to register and have a clear photo of their face taken. On the other hand, Bitcoin ATMs need as little information as possible. For instance, you will only be required to provide your phone number if the amount you want to trade or cash in doesn’t go over a certain threshold.
Convenience is also one of the benefits of using Bitcoin ATMs. There are no delays in transactions and users have multiple options. Unfortunately, it could also lead to one of its disadvantages. You may have to pay hefty premiums to enjoy such conveniences.
Due to Bitcoin’s extreme price volatility, Bitcoin ATM owners often have to protect themselves from risks. In doing so, they may set higher or lower Bitcoin exchange rates.
To cooperate with local regulations and prevent illicit activities, some crypto machines impose a certain trade limit per person per day for both the purchase and sale of cryptos. That’s also why several of these units implement a simple KYC verification especially when you’re transacting large sums of cryptocurrency or withdrawing cash.
How to Use a Bitcoin ATM
Despite the huge number of pullouts in the first quarter of 2023, there are still over 30,000 Bitcoin ATMs all over the world. Of these, more than 200 are in Australia, putting the country in the world’s top three nations with the highest number of crypto ATMs. The US earns the top spot on the list with the most Bitcoin machines, followed by Canada. To find out if there are any BTMs near Melbourne or Sydney, use services such as Find Bitcoin ATM. From there, you can look up dozens of locations across Australia and find the closest Bitcoin ATM to your location.
Take note that not all Bitcoin ATMs have bi-directional functionality. Some only allow users to purchase cryptos but not sell them. Hence, it’s always best to find out the Bitcoin ATM’s features beforehand.
Whether you are registered or not, using a Bitcoin ATM requires some sort of verification process. You might have to give a phone number for security reasons. It could also be an ID like a driver’s license or a passport. Most likely, you will have to verify your identity using a One-Time Password. Once that process is completed, you can start to buy and sell Bitcoins.
If you want to buy BTC, enter the amount you wish to exchange for cryptocurrency. You can start a new Bitcoin wallet where the digital currency will be transferred, or you can use a pre-existing wallet. You have to deposit cash through the ATM in exchange for cryptos, and then you have to confirm the transaction. The ATM will transfer the cryptos as soon as you’ve deposited the money.
Here are three ways of transferring the Bitcoins you purchased:
If you want your cryptos transferred to an existing wallet, all you have to do is scan the address QR code through the Bitcoin ATM scanner. The ATM will then send the cryptos to the address shortly after.
Starting a Bitcoin wallet
You will receive a piece of paper that contains a QR code with a private key. Scan the code to gain access to the Bitcoins you purchased.
Not all machines have this option. Only some would let you receive the cryptocurrencies through email. When you do choose this option, you will get your QR code through your email address. To make your transaction more secure, some services would let you encrypt the email with a password.
When it comes to selling your Bitcoins, the process is similar to the buying process. You need to key in the amount of Bitcoin you wish to sell and then the wallet address on the ATM. Once the transaction is completed, the ATM will dispense cash.
The selling price at an ATM is usually not more than 5 to 10% of the rates offered at online exchanges. If you reside in Australia, you may need to pay capital tax gains for every sale you make.
How to Find a Bitcoin ATM Near You
Most Bitcoin ATMs are in North America. But Australia has its fair share. In fact, when most of the world saw numerous Bitcoin ATM pullouts, Australia installed dozens of new machines from the last quarter of 2022 to the first quarter of 2023. As of March 2023, Coin ATM Radar indicates that the country has 361 Bitcoin ATM units. Melbourne has most of them with 89 in total. Sydney comes a close second with 87 BTMs. Other locations in Australia that have them include Brisbane, Adelaide, Perth, Canberra, Surfers Paradise, and more.
To find one near you, seek help from services like Coin ATM Radar and Find Bitcoin ATM. These platforms will let you search for nearby machines through a live view of the Bitcoin ATM map.
Using these services, you can find Bitcoin ATMs anywhere in Australia, including the ones closest to you. More importantly, you will be able to look up important details about any Bitcoin ATM such as their fees and limits.
You can also find out what their features are. These platforms will let you know if the ATM you’ve chosen offers two-way operations. You can find out if the ATM only lets you buy Bitcoins but not sell them. You can also get directions from your current location to the nearest machine.
Use Coin ATM Radar
You don’t need to break a sweat to conduct your search. If you use Coin ATM Radar, here’s what you need to do:
- Open their website and find the live map.
- Tick a few boxes that indicate what you’re looking for in a Bitcoin ATM. You can choose the cryptocurrency you want to transact with, and the operations you want your machine to have.
- Add or click locations near you and wait for search results.
- Select the ATM that’s closest to you to view its details.
- Click on the Get Directions
Use Find Bitcoin ATM
Find Bitcoin ATM has a slightly different setup. They show the live map, but they don’t have tick boxes to narrow your search. However, you can zoom in on the locations that are tagged on the map. Here’s what you need to do to find a Bitcoin ATM using this specific platform:
- Open their main website.
- Find the Locations menu on the navigation bar, where they list the cities in Australia with BTMs. And choose the city you’re currently in.
- From there, you will find everything you need to know about the machines found within that city, including directions.
- You can click Open to learn more about the BTMs on the list.
Operating Bitcoin Machines
The ever-increasing growth of crypto markets is creating even more opportunities for entrepreneurs looking to establish themselves in the industry before mainstream adoption. But before you decide to delve right in and operate a BTM business, you need to look at the costs and risks involved and weigh them against the potential value your company can gain.
Operators receive an average of $30,000 a month in transaction volume, according to Coin ATM Radar. Some earn about $20 to $25 while there are others who reap hundreds of thousands for each ATM unit.
Several factors determine your revenue— transaction volume, population density, and the community’s Bitcoin awareness level are some of them. For instance, a Bitcoin ATM located in Sydney would be used more often than a machine found in a city with a smaller population.
In the same report, Coin ATM Radar noted that machines placed in commercial locations with high foot traffic are more profitable. As for machines placed in stores and shops, revenue is determined by opening hours and the type of company hosting them. They say that restaurants and pizzerias are some of the more popular locations.
Take a few weeks to determine if your current location is a good spot for your Bitcoin ATM. If it isn’t, you should consider plans to install your units in other locations where they might be more customers.
Costs of operating a Bitcoin ATM
Now that you know how much you can possibly earn from operating a Bitcoin Teller Machine, let’s look at the costs of running a Bitcoin ATM. The type of machine you want, its manufacturer, your country, and your currency are all factors that influence the price of a machine. Today, Genesis Satoshi1 one-way machines cost approximately USD6,800, and Genesis Satoshi2 two-way units cost about USD8,900. These are the world’s most used ATMs powered by advanced technology, but there are more affordable units in the market. For instance, General Bytes’ BATMTwo one-way costs only USD2,800. That’s already a pretty good buy for beginners.
Apart from the price of the machine, you have to pay for delivery and installation costs that would set you back two to three thousand dollars more. If you’re purchasing hardware from a foreign country, you might have to pay a hefty price for the shipment. All of that will cost around $10,000 to $15,000.
When you’re running a Bitcoin ATM company, you have additional expenses to think about. Rent, advertising, maintenance, and customer support are a few examples. Now that cryptocurrencies are becoming more mainstream, governments are starting to implement stricter regulations and policies. In order for you to run a legitimate business, you need to pay legal fees to consult with a lawyer. You also have to spend for your licenses. More importantly, you need to consider the cost of stocking cash and cryptocurrencies as these units can’t operate without them.
How to Start a Bitcoin ATM Business
A Bitcoin ATM business won’t necessarily be profitable and it’s definitely not that simple to run. Aside from good timing, you need to consider several factors before entering such a venture. Research more about your city’s Bitcoin awareness level, and check out your local cryptocurrency regulations.
If you’ve weighed the risks and benefits and you’re certain about entering this industry as an entrepreneur, come up with a great business plan. Outline your strategies so you can guarantee that your business will be profitable. Decide if you want a one-way or two-way BTM, and choose a manufacturer that has a great track record.
Don’t forget about customer support and maintenance. To ensure that your machine is profitable, you must constantly strive to provide excellent customer service. Lay a firm foundation for your business, and success should follow.