In 2017, it is rare to see a person who’s never heard of the world’s most popular cryptocurrency Bitcoin. However, not everybody knows that digital coins can be acquired through ATM, just like regular cash.
The number of ATMs installed worldwide is nearing 1,600 machines. Most of them, which is more than 900, are operating in the U.S, according to Coin ATM Radar, a website that tracks cryptocurrency ATMs globally. That’s up from none in early 2014.
Bitcoin can be obtained at all 1,567 cryptocurrency ATMs, followed by the cryptocurrency Litecoin, available at 357 ATMs. Coinsource, the biggest Bitcoin ATM operator, owns 128 machines in the U.S. They are spread across the country, including New York, Philadelphia and large cities within California and Texas.
There are several cryptocurrency ATM manufacturers and, accordingly, several types of Bitcoin ATMs. Most machines will allow you to create a digital wallet. Some of them, however, require a pre-made online wallet. In order to buy cryptocurrency, you will need to scan a code created either at the ATM or online. Then, you insert cash and add funds to your digital wallet. Some of the machines also allow the users to perform a reverse exchange of Bitcoins into cash, physically or digitally.
Coinsource CEO Sheffield Clark says that most clients use Bitcoins to make purchases at eCommerce websites or to send money. Cryptocurrency is starting to become widely accepted by the merchants, which is the main reason for non-traders to buy Bitcoins. Even some of the largest retailers like Microsoft, Overstock.com and Expedia allow for the payments to be made with cryptocurrency.
Earlier this year, Japan has officially recognized Bitcoin as a legal payment method, driving its prices higher over the summer. However, some of the critics keep calling Bitcoin a fraud and threatening with a crash. So far it has been successfully slowing retailer adoption in the U.S.
Still, Clark claims that most customers use Bitcoin as a financial tool to buy things, rather than an investment asset. He estimates that only 20 to 25% of all Coinsource Bitcoin ATM users are the investor type.
Clark explains that cryptocurrency ATM business isn’t strongly affected by Bitcoin volatility. He adds that his firm was founded three years ago, when Bitcoin was worth about $179. There will always be some set of people who use cryptocurrency as an investment asset, but for the majority, digital money serves a different purpose.
Cryptocurrency ATMs charge an average transaction fee of 8.93%, while the machines operated by Coinsource charge about 8%. Cryptocurrency ATMs normally charge a percentage of a transaction, rather than a fixed fee like bank ATMs. Don’t forget that not spending your freshly acquired Bitcoins right away may lead to a nice bonus, should the value go up.
Last year, traditional ATMs have set a record high, with the average cost of using a machine being as high as $4.57. An unplanned use of an ATM would cost 23% in fees.