Bitcoin has been around for more than 13 years now and many individual and institutional investors have already secured holdings in the popular digital asset. However, the rise in BTC prices during last year has brought the attention of newcomers as well, making many people wonder if it is difficult to invest in Bitcoin and how to buy Bitcoin.
While it may initially seem overwhelming trying to figure out how to buy bitcoin, it can be done in just a few simple steps. One of the easiest ways to invest in Bitcoin for the first time is to use a Bitcoin ATM. In this article, we will explain what is a Bitcoin ATM and how does it work, as it’s one of the easiest ways to acquire Bitcoin.
What Is Bitcoin?
Bitcoin is the first cryptocurrency that emerged in 2009, created by anonymous developer Satoshi Nakamoto. While it’s not the first attempt at digital money, Bitcoin is the very first successful one to be implemented in a decentralized way using a blockchain. Bitcoin relies on cryptography for its creation and has introduced blockchain technology to the world — a distributed ledger where new transactions are recorded and new bitcoins are created via “mining” using specialized computers.
There is a total supply of 21 million, the exact number of how many bitcoins there will ever be in the world. New coins are being “mined” daily, meaning many individuals around the world participate in the solving of complex mathematical issues in the Bitcoin blockchain and whenever one of them succeeds in it, they receive an award in the form of 6.25 bitcoins for their work. Due to the set supply of Bitcoin, the mining reward periodically decreases, making the crypto asset even more valuable because of its scarcity.
Bitcoin’s main purpose, as introduced by Satoshi Nakamoto in its initial release, is to become an alternative to fiat government money, which according to the BTC creator, is too dependent on authorities like banks and governments. BTC’s main instrument in achieving this is its decentralization due to the fact that not one central authority is controlling the asset, but many users across the whole world who participate in the blockchain and help to maintain its security and transparency. As a result of the gained attention after the high price Bitcoin reached in 2017, many new cryptocurrencies have emerged, following the BTC path of decentralization and offering additional use cases and utility.
How to Buy and Store Bitcoin
Bitcoin is digital and exists on a blockchain. To be able to purchase bitcoins, you first need to own a digital wallet. There are hundreds of wallets to download. We recommend HODL Wallet which is a simple minimalist bitcoin wallet which is non-custodial. You can also find a list of Bitcoin enabled wallets on bitcoin-only.com.
To keep it simple, Bitcoin works with two types of keys, a public key which is seen by everyone. It’s analogous to your bank account number which you give out to someone who needs to know where to wire you money. There 2nd key is a private one — known only to the wallet owner. This is analogous to your password to your bank account. You don’t want to give out your private key to anyone. Private keys = ownership of your bitcoin. Depending on where you want to store your private keys, offline or online, you can choose between different types of cold storage wallets or hot storage ones, like HODL Wallet, for example.
After you’ve chosen your preferred wallet, you have several options on how to buy Bitcoin. You can purchase BTC on a centralized (CEXs) or decentralized (DEXs) crypto exchange — special online platforms for crypto trading. The difference between the two types of exchanges is the third party that oversees the transactions in centralized exchanges, which is missing from DEXs. Online brokerages also offer cryptocurrencies for trading alongside other assets like stocks, ETFs, or bonds. Bitcoin remains the most liquid digital asset today, despite the many emerging competitors, that’s why most, if not all, exchanges and brokerages offer it for trading.
White glove OTC trading desks like Bitstop Private are another great way to buy bitcoin easily with great customer support. You get your own personal Bitcoin broker to walk you through the process of buying Bitcoin. Its a white-glove style high touch service.
Another way of purchasing Bitcoin is through a Bitcoin ATM. Bitcoin ATMs offer simplicity, convenience and are instant. They are a great option especially for beginners. They are one of the only ways to purchase Bitcoin with cash. Now we’ll explain what is a Bitcoin ATM and how does it work to help you decide if it’s the right method for you.
What Is a Bitcoin ATM and How Does It Work?
Having covered the basics about the first crypto, now comes the time to explain what is a Bitcoin ATM and how does it work. Similar to traditional ATMs, which allow people to withdraw cash using their debit bank card, Bitcoin ATMs are devices that allow people to purchase bitcoin using cash.
Users are able to buy bitcoin with cash. Bitcoin ATMs are always connected to the internet and Bitcoin network and when a transaction is initiated, they propagate a transaction to the Bitcoin network which sends the bitcoin to the customer bitcoin wallet that they scanned in front of the machine.
Some Bitcoin ATMs are one-way meaning they only let you buy or only let you sell Bitcoin for cash. Some Bitcoin ATMs are two-way meaning they let you buy and sell Bitcoin for cash out of the same machine.
What Is a Bitcoin ATM and How Does It Work: Step-by-Step Explanation
First you need to find a Bitcoin ATM near you. To locate the closest one to you, you can check out the locations we currently have on our website. Bitstop has thousands of locations in the US with more popping up everyday. Once you find a location, you need to register at the Bitstop ATM.
You can either register at a Bitcoin ATM in-person or you can pre-register before you get to the Bitcoin on the Bitstop website at account.stg-bitstopwebsite-testnet.kinsta.cloud/register.
Here is a simple video for how to register at the Bitcoin ATM in person:
https://www.youtube.com/watch?v=k1zZt7TrjUQ
Then you will need only four things — the amount of cash you intend to buy BTC with, your ID, a smartphone, and a digital wallet. From there the steps to what is a Bitcoin ATM and how does it work are the following:
- Select “Buy Bitcoin” on the Bitstop Bitcoin ATM you’ve located
- Enter your phone number
- Set up a 4-digit PIN
- Scan your Bitcoin Wallet QR code
- Insert the amount of cash you want to use to purchase bitcoins with
- Review the information and select “Send to your wallet”
Your purchase of bitcoins through a Bitstop ATM is complete!
Pros of using a Bitcoin ATM
- Easy to use for beginners
- Instant or much faster that online exchanges
- Convenient
- Cash to Bitcoin
Cons of using a Bitcoin ATM
- Transaction fee is usually higher because of costs of dealing with cash and compliance
What are the reasons people use Bitcoin ATMs?
Although there are literally thousands of individual specific reasons why people buy Bitcoin from Bitcoin ATMs, you can categorize most reasons into 4 categories:
- Investment (Long-Term)
- Speculative (Short-Term)
- Peer-to-peer international remittances
- Online Payments
Where can you usually find Bitcoin ATMs?
There are over 40,000 Bitcoin ATMs world wide. Most Bitcoin ATMs can be found in the following spots in order of most common to least common:
- Gas Stations
- Convenience Stores
- Shipping Centers and Strip Malls
- Grocery Stores
- Smoke Shops
- Liquor Stores
- Malls
- Tourist Centers
- Airports/Train Stations
Conclusion
Bitcoin ATMs are one of the easiest ways to get started making your first investment in Bitcoin. They are a great way to buy Bitcoin instantly with cash. Not all companies who provide Bitcoin ATMs are created equal. Some have better rates than others and provide better service and value than others. Bitstop is an early pioneer and reputable trusted leader in the Bitcoin ATM industry and has served hundreds of thousands of customers since 2013.