Terminal for trading cryptocurrency. How it works, advantages and disadvantages.
Bitcoin ATMs seem to be popping up everywhere, as Bitcoin is fighting to crush its old ATH. Following the increased interest of institutions, retail investors are looking for different ways to buy Bitcoin with credit card, bank transfer, or even cash.
That’s right; cash! Not many options are available today when it comes to cash payments for Bitcoin. Apart from using a terminal for your transactions, the only other way would be to take the risk and meet someone in person. That is neither safe nor smart, as so many people end up getting scammed.
In this article, we look at Cryptocurrency ATMs, how they work, their benefits and drawbacks, as well as their future.
What are Bitcoin ATMs (cryptocurrency terminals)?
The concept of Bitcoin ATMs goes far back, with the first terminals being placed on busy locations as early as 2014. They operate similar to normal ATMs, in as they allow users to spend or receive cash (or use cards), in order to receive or sell cryptocurrency. They are great of tech-illiterate people, as they do not require the creation of an account on an exchange platform, or going through the complex verification process so many are trying to avoid. However, they do have their limitations, which we will discuss below. You can get a better idea of Bitcoin ATMs and how they work by watching the following video:
Benefits of cryptocurrency terminals.
There are several advantages when it comes to buying cryptocurrency from a physical terminal (a.k.a. ATM). These are:
● You can usually buy up to $1000 worth of BTC without any form of verification
● If you wish to exchange larger amounts, all you need to do is verify your phone, which may simply be a burner number to ensure your privacy.
● The machine accepts cash, which is the best way for people with not much internet knowledge to obtain Bitcoin. You will, however, need to create a wallet if you don’t have one already.
● The machine can also pay you in cash, which can come in handy when you find yourself in common Bitcoin ATM locations like shopping malls or airports.
Drawbacks of Bitcoin ATMs.
● It may be hard to find an ATM close to your location. This can be a problem, as you need to physically visit the store to make the purchase or sale.
● Cryptocurrency terminals have very high fees. With most exchanges charging less than 0,1% for your purchases, ATMs can be seen as extremely expensive alternatives. While most charge anywhere in the range of 4-5% (which you will obviously not even see since the price they sell you the coins for is dynamically adjusted) there are cases where the amount can rank up to 10% of your transaction.
● They don’t support many cryptocurrencies. At the current time of this writing, cryptocurrency ATMs will usually support a small number of coins, since they haven’t been updated in a long time (with exceptions). Apart from Bitcoin, you can expect to buy the likes of Ethereum, Bitcoin Cash, Litecoin, and Ripple, while some terminals also add Tron and Stellar Lumens as options.
The future of cryptocurrency terminals.
As investors are becoming more intelligent, cryptocurrency ATMs will no longer be the only way in which people choose to purchase Bitcoin. Unless merchants decide to lower the rates of their terminals, people will start buying Bitcoin using different ways, including newer ones that seem cheaper.
One of these methods is Paypal, which recently announced its support for a select number of cryptocurrencies. With a moderate fee of 4,75% it would make more sense for those wishing to invest a significant amount of money to use the popular payment system instead.
Aside from that, there are several cryptocurrency exchanges that are currently releasing cryptocurrency debit cards. These cards will link directly with a user’s trading portfolio allowing them to pay for anything by simply using their exchange funds. With an average conversion rate & commission of 2%, this option is even better when it comes to future applications. That being said, we may see ATMs upgrade their offer, in which case these statements will no longer be as important.
Cryptocurrency ATMs are, to this day, an important bridge between everyday consumers and Bitcoin. They are one of the most important elements that will eventually lead to mainstream adoption. As the public is becoming more accustomed to Bitcoin and the demand keeps on increasing, we may see more cryptocurrency terminals popping up all around the world, to accommodate the needs of the public. All we can do now is wait for it to happen!