Bitcoin ATMs are amazing, they represent one of the giant leaps of Bitcoin and other cryptocurrencies toward mass adoption. The first public Bitcoin ATM appeared as far back as November 2013, at a coffee shop in Vancouver Canada. and so far has gained the fascination of many. They offer a direct way for you to convert your fiat currencies to Bitcoin and as such serve as an entry point for many into the world of cryptocurrencies.
According to Coinatmradar.com, there are currently over 39,000 Bitcoin ATMs globally with almost 90 percent domiciled in the United States alone. The trend for new installations has continued to grow as many cities tend towards being crypto-friendly.
Bitcoin ATMs offer the unique advantage of being a very convenient way to purchase with physical cash. It is also a fun way to buy crypto considering how far crypto use has evolved.
While these are all positive markers for a better general acceptance of Bitcoin and crypto in general, there are some issues that need to be addressed. These are ;
1. Bitcoin ATM Transaction Fees
The Bitcoin ATM (or BTM as it is sometimes called) fees can be outrageously high. It typically ranges from 7- 30 percent of the total cost of purchase. That means you might get $70 worth of Bitcoin for every $100 bill you sloth into the teller machine. Compare that to the typical 1-3 percent charge you might get if you were to make the same purchase from a crypto exchange using your credit/debit cards.
The justification for this tends to be that there are additional responsibilities that are borne by the operators of such machines e.g. cash handling and security.
2. Loss of Anonymity and Privacy
It was originally thought that you could go fully anonymous using such Bitcoin ATM services. It was conceived that since you could make payments using physical cash, one could bypass the direct interference from banks and the government. But regulatory requirements have removed such anonymity. Many Bitcoin ATMs particularly those in the US will often require you to set up a user profile before you can use the Bitcoin ATM.
Setting up a user profile will require you to disclose your name, phone number, and a valid ID card. So you really cannot stay off the grid when you make use of a Bitcoin ATM. You still leave some trails behind. If privacy is of huge concern to you (which maybe be very legitimate), you may want to consider options.
3. Negative Attention From Scammers
While this is not essentially a Bitcoin ATM problem, its use by scammers constitutes a growing cause for concern. The FBI has warned that Bitcoin ATM is becoming a preferred method of receiving payments for scammers. This is facilitated by the fact that Bitcoin is very efficient for international remittances and as such, scammers are taking advantage of it.
The US Federal Trade Commission also issued a public warning as regard this earlier in January 2022. Telling people of the potential of being a victim of a scam through this means.
Bitcoin ATMs have a lot of benefits to the crypto community and to the public in general. It provides an alternative means of effecting payments. Excellent for converting cash into cryptocurrency and for International Remittances. It has the added benefit of being convenient and easy to use. The truth also needs to be told of the high fees involved in its use, Privacy concerns, and the potential of its being used to perpetuate scams.
Chart Credit: https://coinatmradar.com/charts/growth/