Are Bitcoin ATMs anonymous? It is one of the prime myths that they are considered anonymous. Though they are not anonymous in nature but few instruments and ways to transact in them might be. Do you think Bitcoin ATM is one of them?
Are you looking to stay anonymous when you are buying Bitcoins? Than Bitcoin ATM might be the thing that you are looking for! In this article, we are going to go through everything that you need to know about the Bitcoin ATMs so you would see if it can help you stay anonymous while shopping for cryptos.
What is a Bitcoin ATM?
Before diving into the explanation of “Are Bitcoin ATMs anonymous?, let’s clear your mind about what is a Bitcoin ATM? A Bitcoin ATM is an internet-connected kiosk that allows a person to buy a Bitcoin by using cash or a debit card. Some Bitcoin ATMs allow options to both buy and sell bitcoins. Also, in some cases, on some machines, you will have to have an existing account to make a transaction.
There are two types of Bitcoin machines: cash kiosks and ATMs. Bitcoin cash kiosks are like ATMs that you are used, except they do not connect to a bank account and they connect the person directly to the Bitcoin exchange. And there are the traditional ATMs that are connected to a bank account so you can buy a Bitcoin cash free.
Check Also: 6 Tips for a Successful Bitcoin ATM Business
How to use a Bitcoin ATM
Now you might be wondering how you can use one of these, well I am going to help you out.
If you have a Bitcoin address (usually in the form of a QR code), you can scan your address on the machine and see what the exchange rates are. Then you have to type in your phone number so that they can make sure that it is you that is in front of the Bitcoin ATM. After it is verified that it is you, then you put in your cash, and you choose which cryptocurrency you want to buy. The machine will take a commission for doing the transaction, and then it will transfer the chosen cryptocurrency to your cryptowallet.
Most transactions on the Bitcoin ATMs are done in cash. The cash will remain in the machine until they empty it out. Also, there are Bitcoin ATMs that has an option to exchange the cryptocurrency that you have in your cryptowallet for cash. When the price of Bitcoin goes down, people usually hurry to cash in their Bitcoin. So the Bitcoin ATMs must have large amounts of money in them, so they don’t run out.
Typically banks do not own the Bitcoin ATMs, and they are instead connected to a Digital Currency Exchange (DCE). A lot of the DCE’s don’t have the regulatory levels as banks which means that they don’t particularly care who is using the Bitcoin ATM’s. As a result, you don’t have to justify where you made the money to buy the cryptocurrency. This can be a great solution for money launderers.
Bitcoin ATM positives and negatives
Like with most things there are positives and negatives. What we are going to do now is see what the good things with the Bitcoin ATMs are and what the bad things are.
Bitcoin ATM positives
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I presume you used a traditional ATM before, so you know how fast that is. Now, it is the same with the Bitcoin ATM. It is one of the fastest ways you can choose to purchase or sell bitcoins.
There are different type of machines, but a machine like Lamassu support has a 15-second operation. You just have to scan a QR code of your bitcoin address, put in the cash and just click ‘’send”, and you will get bitcoins immediately. However, if you are using it for the first time, you will have to go through the verification process. Also, even with the verification process, the operation is much faster than going through the exchanges.
- Secure and anonymous
Most Bitcoin ATMs are working under a known operator with an established business individual. They usually provide you with a business address, email, and a support phone so you can contact them if you need to. When you use the machine, you are interacting with just the machine, and nobody else is involved.
All of this can be applied for anonymity. Unless the Bitcoin ATM has the verification process turned off, there will be no full anonymity. However, there is a high possibility that you can find a Bitcoin ATM that doesn’t require any form of verification.
Well, this is almost true. Yes, you can’t find a Bitcoin ATM everywhere (unlike using your phone or computer), you have to use them during the business hours (unlike online exchanges). However, if you are new to Bitcoin or cryptocurrencies in general than this is great for you.
Also for some users that don’t want to go through the registration process at an online exchange and do a wire transfer to deposit funds just so they can acquire a small sum of Bitcoin. So, this is an excellent option for them, they can just go into a local grocery shop and use cash to purchase Bitcoin. It is a straightforward process.
Bitcoin ATM negatives
After looking at some of the positives of using a Bitcoin ATM, now we are going to see what the negatives are.
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There have been multiple complaints from the people that use the Bitcoin ATMs about the hefty fees. They would be right to complain since on average Bitcoin ATMs charges are 6.5 percent. However, this is an average, some Bitcoin charge as high as 30 percent or even more through commissions. That is a lot to pay to get crypto.
However, there is a belief that with more competition and with a more mature market, the costs will decrease.
- Service reliability
Service (un)reliability is one of the main issues with the Bitcoin ATMs. Some machines have been reported non-functional. Since most Bitcoin ATMs are small in size, they can be taken to different places. For some people, machines are located a couple of hours driving. So, it is significant for machines to have both the buy and the sell options on the machine.
Manufacturers of the machines try to develop fixes that can be done remotely in case of bugs, so they don’t have to be at the location just so they can relaunch the ATM.
Another reliability issue is the attitude of the operators. Some of the operators run machines that are connected to the bitcoin exchanges. As a result, when a customer does a transaction, it will be mirrored on the exchange. And some operators use bitcoins from their hot wallet, so they bare the currency risk. That was quite the problem when Bitcoin had volatile price movements. The operators then didn’t provide a full service, because when the price rose, they were encouraged to keep the Bitcoin and make money from it.
- Location of the Bitcoin ATMs
Since Bitcoin ATMs are relatively new, even for the people that are used to cryptocurrency. You would be surprised if you could find one, and a lot of people are saying that they don’t see any machines around where they live. For some people, it might be hard to find a Bitcoin ATM near them, if they can even find one.
Are Bitcoin ATMs anonymous?
So the question is, are Bitcoin ATMs anonymous? Well staying anonymous is almost the same as staying safe, right? So the question would be like this; are Bitcoin ATMs anonymous as well as safe? Let me answer those questions.
For anonymity, when you are using Bitcoin ATM’s you can be sure there is virtually no oversight. Also, if you want it even harder for people to find you; besides using cash you can use a prepaid debit card.
While some machines do require a verification process, some don’t need anything. So, if you are looking to buy Bitcoin anonymously, this is the way for you.
However, if you are using cash to buy Bitcoin, you would probably be able to buy a small amount of Bitcoin, but you will leave minimal traces of your operation. The other downside of purchasing Bitcoin with cash is the Bitcoin ATMs being in public places. Since you have to carry a lot of money to buy Bitcoin a lot of people will probably be interested in what you are doing, also there will likely be cameras in the store where the Bitcoin ATM is located.
While buying cryptos at a Bitcoin ATM isn’t wholly anonymous it is probably better than giving all your personal information to a cryptocurrency exchange.
For the safety part of the Bitcoin ATMs, the question would be if the ATMs are located in a dangerous neighbourhood or a safe neighbourhood. So if it is a dangerous area you should probably worry. However, operators try their best to put the Bitcoin ATMs in a secure location.
The other part of safety is if the machine can be hacked. Well, there were stories of a tool that could hack the machines, but it seems that those stories were not true. So the concern that the machines could be hacked is unwarranted. The only thing you have to worry about when it comes to security is the location of the Bitcoin ATM.
After going through everything in detail about “are Bitcoin ATMs anonymous?” it seems that the Bitcoin ATMs are a way to go if you want to stay anonymous. Also, it helps that they are fast and secure. The only problem that I have with the Bitcoin ATMs is that you can’t find it anywhere. However, that problem could be fixed soon with the market for them is growing along with the cryptocurrencies.
This is a Guest Post from https://eaglesinvestors.com/