Some have called it the future of financial transactions. Others see it as a bubble that could burst at any moment. It’s used by investors to diversify their portfolios and, increasingly, to facilitate online and on-site transactions. Some swear by it, others still give it a wide berth, even after over a decade.
Love it or hate it, Bitcoin is here to stay. While there are multiple cryptocurrencies out there, Bitcoin is the most commonly used with over 20 million active users around the world. It’s estimated that around 5% of Europe’s entire population uses Bitcoin for investment, shopping and all kinds of other uses.
The rise of Bitcoin and other cryptocurrencies has given rise to the use of Bitcoin ATMs in the UK and all over the world. But what is a Bitcoin ATM? How do they work? And where can you find the closest one to you? Let’s take a look!
Understanding Bitcoin ATMs
A Bitcoin ATM is an internet-enabled kiosk where users can exchange deposited cash for Bitcoin. While they are known as Bitcoin ATMs, they can exchange cash for a range of other cryptocurrencies including Litecoin, Monero, Lightning BTC, Dash, Dogecoin and more.
While it’s a catchy name, the term Bitcoin ATM is actually something of a misnomer.
You cannot exchange Bitcoin for cash at these machines. You cannot withdraw cash from them, and they are not connected to any banks. Instead, these machines facilitate blockchain-based transactions. The equivalent value of the cash deposited in the machine is sent to the user’s digital wallet, usually via the use of a Quick Response (QR) code.
If the user does not already have a digital wallet, they can set up a new one at the machine. Transactions are instantaneous, and will usually appear in the user’s wallet in a matter of minutes.
Most Bitcoin ATMs set an upper and lower limit to how much cash can be exchanged for cryptocurrencies.
Bitcoin ATMs & identity verification
There are several ways in which Bitcoin ATMs may verify the identity of their users. Depending on the size of the transaction, the machine may request your mobile phone number in order to text you a verification code. Or they may scan an official form of identification such as your driving licence. Some even have palm-scanning facilities.
Bitcoin ATM fees
Like some franchised ATMs, Bitcoin ATMs charge a fee for their use. Unlike these machines, however, their fees are not fixed. Instead, they take a small percentage of the value of each transaction. While this varies between suppliers, the average fee is around 7% higher than the spot price for Bitcoin.
How many Bitcoin ATMs are there in the UK?
At the time of writing, there are over 100 Bitcoin ATMs across the country. While the majority are in London (95), there are many across the country with 22 in Birmingham, six in Cardiff, three in Edinburgh, two in Glasgow and 13 in Manchester. Click here to find your nearest Bitcoin ATM.
Why are Bitcoin ATMs becoming more popular?
While the online exchange of cryptocurrencies is very convenient, users can encounter a number of pain points relating to transaction times, privacy and support. The use of Bitcoin ATMs helps to mitigate these. Transactions are instantaneous with Bitcoin usually appearing in the user’s digital wallet in minutes or even seconds. Users do not need to share their bank details or any other personal information. They also offer ease of access to cryptocurrencies for those who are paid in cash or prefer to handle cash.
With over 20,000 Bitcoin ATMs installed around the world, we can expect them to play a pivotal role in the future of cryptocurrency.
We Can Help
If you’re interested in finding out more about Bitcoin, and Bitcoin ATMs, then get in touch with our financial experts. Discover how GoCardless can help you with ad hoc payments or recurring payments.