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Ask CryptoVantage: Who Uses Bitcoin ATMs and Why?
You’ve probably spotted one. Inside the mall, the cafe, the airport or another strategic place. With just a phone, you can walk to a Bitcoin ATM and buy or sell BTC, whether it’s your first time or you’re already a pro.
There are 32,000+ Bitcoin ATMs, a.k.a BTMs, in the world right now, per Coin ATM Radar. Bitcoin enthusiasts hail them as a means to build on crypto’s original promise of decentralizing money.
But their ease and convenience also come at a steep cost. The average Bitcoin ATM charges anything from 5% to 20% for transactions. That’s higher than what you’d encounter at any cryptocurrency exchange or traditional ATM.
So, who uses them and why? In this feature, we’ll look into what kind of people use Bitcoin ATMs.
1. Privacy Enthusiasts
Before we talk about why privacy enthusiasts use Bitcoin ATMs, let’s see why privacy comes up in the first place. Crypto exchanges require you to submit your KYC (Know Your Customer) information such as a passport, government ID, and proof of address before you can use their features.
KYC, which is meant to curb ills such as money laundering, is now a regulatory requirement in most jurisdictions for crypto businesses.
But sections of the community believe KYC requirements go against the true spirit of crypto’s privacy and anonymity. As such, some Bitcoin users gravitate towards Bitcoin ATMs, which are less intrusive. That’s the idea at least.
BTMs were initially big on privacy and anonymity. However, things have become complicated in recent years. Due to concerns over their potential involvement in facilitating crime, BTMs have increasingly come under federal scrutiny.
This means that, depending on location, most Bitcoin ATMs now require you to provide some proof of identity.
Thankfully, there are still two scenarios in which you can still transact Bitcoin without revealing your personal information: with small sums and in a country where customer verification is not required.
That’s the easy part. The trickier part would be locating such ATMs. If you’re determined to preserve your privacy, you may have to travel out of state or to another country altogether.
2. The Unbanked
Bitcoin ATMs have become a lifeline for another group of people: the world’s unbanked. For such folks, these services offer a convenient and swift way to buy or sell Bitcoin using cash.
A study by Trading Browser revealed that countries with the highest numbers of unbanked people had the highest rates of crypto adoption. What stood out, according to the report’s writer Daniel Larsson, was that Bitcoin ATMs were a “surprising and significant” driver of this trend.
For instance, Mexico, where a massive 60% of the population has no bank account, ranked second in the study’s list with 46 Bitcoin kiosks.
Another highlight was that in countries where being unbanked is almost unheard of, such as Sweden, Denmark, Norway, and New Zealand, Bitcoin ATMs are virtually nonexistent.
What we’re seeing here is that Bitcoin kiosks tend to thrive where most people don’t have a bank account.
Bitcoin ATMs can also be handy if cryptocurrency exchanges are banned where you live. Although it’s unlikely for a Bitcoin ATM to survive after such a ban, as seen in China, it’s still a possibility — in theory.
3. People in a Pickle
During times when you’re in a bind and can’t access your exchange account, a Bitcoin ATM can be a lifesaver.
Say you catch wind that your exchange is going to close down and decide to withdraw your funds. Unfortunately, your internet connectivity is slow, or you can’t use your phone or laptop.
In the crypto world, where things move fast, even minutes could be a game changer.
An example is when FTX, a then top five exchange, filed for bankruptcy. Scores of account holders were unable to salvage their money on time. By the time they caught a whiff of an impending bankruptcy, they were unable to withdraw from the exchange.
In moments like these, an ATM could be the only solution. You can rush to the nearest machine, insert your wallet’s QR code or input your private key and get your money out.
Or, if your cryptocurrency’s value is sinking and you want to sell, a Bitcoin ATM can let you quickly convert your holdings into cash.
4. Newcomers and Older Users
Bitcoin ATMs make it simpler than ever for beginner and older users to use crypto.
For beginners, the prospect of setting up and navigating through an exchange can feel intimidating. Such users are usually curious about the world of crypto but aren’t quite ready to dive into the whole shebang.
For them, Bitcoin ATMs are a refreshingly straightforward solution. All they need to do is walk to a stand, insert cash, and receive their BTC within minutes.
This simplicity makes Bitcoin ATMs an excellent way for newcomers who want to dip their toes in crypto to do so at their own pace.
On their part, older folks who may not be as tech savvy may gravitate to Bitcoin ATMs for several reasons.
First, they are already familiar with traditional ATMs, which they have used for years. Bitcoin ATMs are akin to traditional ATMs in how they look and how they work, which can offer them a sense of familiarity.
Moreover, this generation tends to prefer experiences that feel “familiar, personal, and tangible.” Bitcoin machines support such an experience. Since users can see the machine, manually insert cash, and receive a paper receipt confirming their transaction, everything feels intuitive.
Final Thoughts: It’s Good to Have Options
Bitcoin ATMs are a tad more pricey than regular ATMs or crypto exchanges. But they fulfill the crypto premise of anonymity where exchanges don’t. Furthermore, in moments when you need to withdraw money from exchanges ASAP, they can save the day.
In addition, they empower crypto beginners and older users to get their start in and participate in the Bitcoin economy. Bitcoin ATMs also empower populations left out by the legacy system to access financial services.
