How Does a Bitcoin ATM Work?

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Cryptocurrencies have come a long way since the introduction of Bitcoin in 2009. When Bitcoin first launched, very few people actually knew what they were or how to get them. Then, crypto only seemed to be associated with nefarious businesses and the dark web. Today, cryptocurrency has successfully shed this negative image, and Bitcoin is now accepted at many major retailers and mom and pop businesses around the country. It’s easier than ever to access coins through online exchanges and in person at ATMs. But how does a Bitcoin ATM work and where can you find them?


The Growth of Cryptocurrencies

Mining and exchanges

Bitcoin used to get a bad rap because of how hard it was to initially obtain. In the earliest days of cryptocurrency, most people obtained cryptocurrency through “mining.” Bitcoin miners created new currency by verifying a certain number of transactions. This process is actually more complicated than it sounds and requires a miner to have powerful hardware and software in addition to a plentiful energy source. Most cryptocurrency mining is done in China where energy costs are low.


The rapid growth in cryptocurrency really started with the emergence of online exchanges. In the same way that you could trade your U.S. dollars for euros, exchanges allow you to trade your fiat currency for Bitcoin, Ethereum, or many other kinds of cryptocurrency.

 

In-person transactions

The latest advance in Bitcoin accessibility is the growth of Bitcoin ATMs, which allow individuals to quickly exchange their cash for cryptocurrency (or vice versa) while they’re out and on the go. There are more than 3,000 Bitcoin ATMs around the world and that number is expected to grow as more merchants and retailers accept Bitcoin and other cryptocurrencies.

 

How Does a Bitcoin ATM Work?

If you’ve ever used a regular bank ATM, you’ll see that Pelicoin’s Bitcoin ATMs are designed to provide a similar experience. However, while it may look the same, the background processes are quite different. We’ll go into detail below.


You’re connecting to an exchange

Unlike a regular ATM, where you’re accessing your bank account, Bitcoin ATMs are connected to the Internet and facilitate and transaction between a user and a cryptocurrency exchange. These are the same types of exchanges online, but users don’t have to deal with the hassle of keeping track of multiple accounts. Because these machines do not require a bank account, users can conduct transactions privately, securely, and anonymously.


You get a unique record of your transaction

If you’re buying cryptocurrency with cash, the ATM will generate a paper “paper wallet” which contains a record of the transaction and generates public and private keys. Users need to keep these records in order to add more currency to their wallets or convert cryptocurrency back into fiat currency.

How to Use a Pelicoin ATM

With a Pelicoin ATM, you can buy and sell Bitcoin, Litecoin, and Ethereum. Here’s how:

 

What you need

  1. At least $20 in U.S. currency

  2. Address for your digital wallet (if you have one--this is not necessary)


Buying cryptocurrency

  • Tap "Buy Coins" on the Pelicoin ATM start screen.

  • Select the amount of cash (U.S. dollars only) you want to convert into cryptocurrency.

  • When prompted, enter your cell phone number. A verification number will be sent to your phone.

  • Enter the verification code into the ATM.

  • Select which cryptocurrency you want to purchase: Bitcoin, Litecoin, or Ethereum.

  • Select if you want to receive your cryptocurrency via QR Code, Digital Wallet, or Paper Wallet.


Cashing Out Cryptocurrency

  • Tap the "Withdraw Cash" on the Pelicoin ATM start screen.

  • When prompted, enter your cell phone number. A verification number will be sent to your phone.

  • Enter the verification code into the ATM.

  • Select which cryptocurrency you want to sell.

  • Select the dollar amount.

  • Scan the QR code or input your digital wallet’s information into the machine.

  • After a few minutes your cash will be ready to withdraw. You will receive a text message with a redemption code when it’s ready.


Contact Pelicoin for Support

If you need further guidance while buying or selling Bitcoin from a Pelicoin ATM, contact support by calling (504) 507-0879 or emailing support@pelicoin.com. If you would like to make a transaction over $5,000, please call our wire transfer department at (814) 422-5237.


Pelicoin has an extensive network of Bitcoin ATMs across the Southeast United States. If you’ve been thinking about buying and trading cryptocurrencies, it’s easier than ever to get started. Visit one of our locations today to turn your cash into Bitcoin, Ethereum, or Litecoin.