How Does a Bitcoin ATM Work?

As of the end of 2021, 46 million Americans own Bitcoin and we’re eager to know how big this number is at the end of 2022. You’re one of many more Americans who want to start buying Bitcoin.

While there are many options for buying Bitcoin, a Bitcoin ATM is the best choice. In this detailed guide, we’ll explain how a Bitcoin ATM works and why you should consider buying Bitcoin from one.

We’ll also look into the benefits of Bitcoin which will help you build your investing strategy.

Here’s what you need to know:

What Are the Benefits of Bitcoin?

While you likely already know some of the benefits of Bitcoin and that’s why you’re here, it’s important to fully understand why Bitcoin has taken off. This will help you decide how often you want to pay the Bitcoin ATM a visit!

The main reason why seasoned Bitcoiners are evangelical about Bitcoin is that they see it as not just an alternative form of money — but the superior form of money.

For this, we’ll have to dive a bit deeper into what is money and why our current fiat system is evil.

What Is Money?

Money has gone through many forms throughout human history. At one point, in many cultures, salt was used as a form of currency — which is where the word ‘salary’ comes from.

But for most of modern civilization, gold bullion was the preferred form of money across cultures. Even when paper money was created, it was affixed to a gold standard.

The Gold Standard meant that a country’s central bank could only print a supply of paper money that was affixed to the country’s gold supply. If, for instance, 100 tons of gold bullion was equivalent to $1 Billion then the central bank couldn’t print more than this amount.

Following the end of the Second World War, the United States was entrusted to hold much of the world’s gold — taking advantage of the damage caused in Europe following the war.

As a result, most of the rest of the world would hold US Dollars rather than gold. The money printing was still relatively disciplined as the US Dollars were tied to the country’s gold supply.

But this changed in August 1971. President Richard Nixon stated that the Federal Reserve, the American central bank, could now print money without it being tied to the gold supply. The Dollar and most of the world were now off The Gold Standard.

Since Switzerland left The Gold Standard in the 1990s, not a single country is on the gold standard. As of December 2022, some countries including the BRICS nations are discussing a return. But as of now, the world is dependent on the weakening US Dollar.

As more dollars are printed without any restraints, the cost of living and inflation continues to rise.

21 Million

The number 21 million or even 21 is a magic number for Bitcoiners. This is because, unlike fiat currencies, Bitcoin can’t get created on a whim. The process of creating more Bitcoin is called mining and there can only ever be 21 million Bitcoins in circulation.

This makes Bitcoin the perfect hedge against inflation. Any hedge against inflation is scarce and is in your control.

With Bitcoin, the supply is finite. You can also control your Bitcoin and it’s not controlled by a government, central bank, or organization.

But, there are ways that such entities have found a way to control the Bitcoin supply. This is something you must know about and ties into our recommendation to use a Bitcoin ATM.

Let’s now look into the different methods on how you can buy, hold, exchange, and sell your Bitcoin.

Cryptocurrency Exchanges

For most beginners to Bitcoin, a cryptocurrency exchange seems like the obvious choice to buy Bitcoin.

It’s quite simple: you enter your debit card information into a cryptocurrency exchange and buy Bitcoin using your fiat currency. The Bitcoin then gets held on the cryptocurrency exchange.

You don’t have to stress about memorizing your public or private key as the information gets saved onto the exchange. You can always sell your Bitcoin for cash and it’ll get deposited into your bank account.

With such ease, you’d think this would be the only way to buy Bitcoin. After all, it seems just perfect, doesn’t it?

As with all things that offer convenience, there’s a major catch and all newcomers to Bitcoin must know and share this as they orange-pill others.

When you buy Bitcoin using an exchange, the exchange owns your Bitcoin. You are essentially borrowing the Bitcoin and can choose what to do with it. But as long as your Bitcoin is controlled by an exchange, your freedom with the Bitcoin hangs on a string.

Take a moment to think about the relationship you have with your bank. You can deposit money as you wish, spend it as you wish, and withdraw it as you wish.

But what happens if you need to transfer or receive a large amount of money? The bank will have to do some investigation and if they deem it suspicious, your transaction will get blocked.

There are fines for withdrawing from your savings account too many times. Banks can charge fees on a whim and you are beholden to them. There might even be fees to close your bank account altogether.

As a result, it’s the bank, not you that controls your money. The same approach applies to storing Bitcoin on a cryptocurrency exchange.   

Hardware Wallet

This type of wallet is a step up from holding your Bitcoin on a cryptocurrency exchange.

A hardware wallet is a small device on which you can store and make transactions with your Bitcoin. This time, it truly is your Bitcoin and you’re in full control of it.

While hardware wallets can get hacked it’s extremely rare and there have been few cases of this happening. The one thing that holds beginners back from using hardware wallets is the technical know-how required to operate them.

You’ll have to memorize a recovery phrase that’s either 12 or 24 words long. If you forget this then you’ll no longer have access to your Bitcoin. If someone else gets hold of your recovery phrase, they can access your Bitcoin.

This shouldn’t put you off hardware wallets, however. They’re still a great way to protect your Bitcoin and should get used alongside Bitcoin ATM paper wallets.

This now brings us to how and why you should use a Bitcoin ATM.

Head Over to the Bitcoin ATM

The major advantage of Bitcoin ATM is that it offers convenience and security, and there are fewer intrusions to your privacy. Best of all, as with hardware wallets, you are in full control of your Bitcoin.

When you go to a Bitcoin ATM, you deposit cash and you’ll receive Bitcoin. You can choose to get the Bitcoin added to a paper wallet which the Bitcoin ATM prints out.

This paper wallet is a piece of paper that displays how much Bitcoin you hold. It’ll also show your public and private key information.

Some Bitcoin ATMs will require you to make an online account through the provider. This lets you manage your Bitcoin however you’re still in control of how you use it. The Bitcoin ATM can’t control or confiscate your Bitcoin.

You can also use the Bitcoin ATM to send your Bitcoin to an existing wallet, such as your hardware wallet.

You don’t have to stress about managing several Bitcoin wallets at once. You can also exchange your Bitcoin for cash at any time using a Bitcoin ATM.

You can find one here and start buying Bitcoin! Make sure you keep track of the different Bitcoin ATM locations in your city so you can always access and buy Bitcoin when you need.

Now let’s return to Bitcoin and try to understand the phenomenon behind it. This will help you determine your strategy on how often and how much Bitcoin to buy.

Make sure you always do your own research and consult a professional for financial advice.

Why Bitcoin Took Off

Bitcoin is going to celebrate its 13th year in 2023. It went from being an obscure digital currency that only a few internet geeks knew about to now becoming a global phenomenon.

In some countries, such as El Salvador, Bitcoin has become a legal tender. In other countries, such as the United States, the government is cracking down on its use.

In other words, Bitcoin has struck a nerve. It’s here to stay and it matters. As discussed earlier in this guide, Bitcoin is a form of money and for many, it’s the best form of money.

As you try to navigate your way through the inflationary crisis, you’ll likely want to buy Bitcoin to protect your wealth. But going forward, even in times of economic stability we’ll still need Bitcoin.

Let’s wrap up by looking at a few more benefits of Bitcoin so you can decide how you want to factor it into your future.

Bitcoin Protects Free Speech

Even if you live in the land of the First Amendment, you’ve probably noticed that freedom of speech is under threat. 

The Founding Fathers of America believed in a few inalienable rights and these are all under threat throughout the world. But for many Bitcoiners, Bitcoin is the solution to protect these rights.

One of these rights is freedom of speech. Take a moment to reflect on the threats to free speech in the so-called “free world” since 2020. The truck protestors in Canada had their bank accounts frozen for rallying against vaccine mandates set by the Trudeau administration.

Imagine if you were pushed around and your money was seized by your bank if you asserted your rights. Such incidents are happening every day and while this is commonplace in much of the world, tyranny is becoming prevalent in the West as well.

But Bitcoin can’t be controlled by a government or organization. As long as you don’t keep your Bitcoin on an exchange, you have control over it. This is why many Bitcoin writers have made philosophical and moral cases for Bitcoin adoption.

Bitcoin Helps the Marginalized

If you’re lucky to live in the First World, you’ve likely never thought about never being able to access money when you need it.

Such is not the case for many marginalized people in totalitarian countries. Or if you’re in the wrong area of a disputed territory, you might not get to access money when you need it.

Bitcoin has already helped such people. Bitcoin is the only money that is fair and helps anyone. It doesn’t matter where they live or what nationality they belong to.

Russians don’t have access to the SWIFT system. Iranians live under sanctions. These are due to the current geopolitical climate which punishes the peoples of such countries.

But they can both earn, save, and spend Bitcoin. No government or international organization can stop them. While this has been part of the criticism toward Bitcoin, this is ultimately why it matters.

Much of the criticism toward the fiat system is that it creates empires. Those who aren’t on the “right side” of what the empire wishes get punished. But Bitcoin doesn’t discriminate in the way that Dollars, Euros, or Pounds might.

It’s the marginalized of the world who’ll adopt Bitcoin first and perhaps the most. As Nigeria’s oppressive government introduces a digital Naira, Nigerians are opting for Bitcoin. As the Venezuelan Bolivar continues to lose value due to hyperinflation, Venezuelans are able to thrive because of Bitcoin.

Remember this as you plan your strategy of how much Bitcoin to buy.

Bitcoin Is the Future

Now you know why Bitcoin matters and how to use a Bitcoin ATM to start investing today.

You should avoid using cryptocurrency exchanges as they control your Bitcoin. A hardware wallet is a great option that should get used alongside a Bitcoin ATM.

Make sure you also use our guide to understand and conduct further research on Bitcoin’s importance. This will help you prepare your strategy for when you start buying Bitcoin.

You can find more articles about finance on our website.