ATMs have been a convenient way to get cash from your accounts for years, but now we’re starting to see crypto ATMs popping up. These machines give people with Bitcoin, or other cryptocurrencies, the opportunity to exchange them for cash. Converting cryptocurrencies typically requires going through an exchange. While conceivably doable through a mobile device, this would be time-consuming and difficult while on the go. The crypto ATMs give fast access, but can people trust them?
How Are Crypto ATMs Different From Bank ATMs?
Conventional ATMs are put out by banks or third-party companies to give account holders access to cash in their accounts. It’s effectively the same as making a withdrawal in person, just at another location. With crypto ATMs, the situation is different. Because cryptocurrencies are decentralized, you don’t hold an account with a central authority that carries out transactions. You can’t really withdraw cryptocurrencies; you have to buy or sell them.
The crypto ATMs are put out by a variety of independent companies that carry out these transactions for their customers. People looking to use Bitcoin ATMs have to set up an account with one of these companies so that they can place Bitcoin into a digital wallet and then withdraw it later. This can often be done at the machine itself, as they typically allow both buying and selling. Some ATM services use QR codes associated with a variety of wallet services to allow transactions.
Why Do People Use Crypto ATMs?
There are more crypto ATMs everyday, but they are still far less common than traditional ATMs. So why would anyone choose to use them? One of the big draws is privacy. Transactions at a normal ATM are recorded in the bank’s records, records directly linked to a person’s identity. Depending on the specific type of crypto ATM, transactions can be carried out anonymously, or at least more obscured than a bank transaction.
Some people use them as an alternative to bank accounts altogether. Banks have numerous fees and requirements. People in certain situations might not have the proper identification to set up a bank account, or they might be overdrawn at the bank or have very poor credit. Using crypto ATMs bypasses the banks entirely, giving the customer full control.
How Secure Are These Machines?
Crypto ATMs are generally quite secure. Some require an existing wallet for use, and only the owner of the wallet can generate the QR code necessary for transactions. Those that rely on accounts with that specific ATM company generally require some form of two-factor authentication, like receiving a code through text or e-mail. Some even use cameras to verify identity.
ATMs, in general, are sometimes targets for sophisticated criminals. They use devices like skimmers to steal card information and PINs. There are some known examples of organizations advertising crypto ATM hacking services, although it is not clear whether they can truly deliver. It’s just as likely, if not more so that the attempted fraudsters buying the software tools are the intended victims.
Other Factors Keeping Customers Away
ATM users are likely well acquainted with service fees. While banks often allow free transactions with their own branded ATMs, third-party machines can charge steep fees for every use. Crypto ATMs are much the same, charging a significant premium for their services. The fees vary substantially between different brands, but some can be upwards of 10 percent of the transaction.
The ATMs also have limits on how much can be withdrawn, both for individual accounts and also because there’s only so much cash in the machine. This shouldn’t be a major problem for anyone using their wallet as a bank account and getting some fast cash for immediate use, but investors trying to cash out won’t be able to do so in an efficient manner.
There are also scams which are associated with crypto ATMs, and this also helps explain why many people avoid them. When we searched the internet looking for answers we found websites like ScamCryptoRobots.com which explain how people’s lack of knowledge can end up costing them a lot of money.
Are Crypto ATMs Here to Stay?
This new kind of ATM is becoming more and more common as new companies start to bring their services online. Hopefully, competition between these companies will eventually drive down fees to the point that people could see crypto ATMs used just the same as traditional machines. Generally, customers can feel safe using crypto ATMs, with only sporadic and anecdotal reports of any major issues.