Two years ago, few people in the world knew much about cryptocurrencies. Today, cryptocurrencies are known by those who follow the news of the day. What is still unrelatively known by new investors, though, is the presence of cryptocurrency ATMs.
There are over 2,000 cryptocurrency machines in North America and machines present in dozens of countries worldwide. Bitcoin is available in nearly all of these machines, and Litecoin, another popular cryptocurrency, is available in roughly 30 percent of ATMs.
Although machines can vary due to the large number of manufacturers, users can create wallets and transfer cash to bitcoin or other cryptocurrency. With some machines, wallets need to be created online before transactions can be made through the ATM, although transactions are made easier once the wallet is created.
ATMs are convenient, but it is important to know there are fees for use just as there are for traditional ATMs. Unlike traditional machines that are flat-fee based, most cryptocurrency ATM transaction fees are percentage based.
The average ATM fee in 2017 was 8.93 percent. This can be much less than flat fees charged by out-of-network cash ATMs which can run as high as 23 percent according to a 2016 Bankrate report.
Compared to 2017, this year has not been a fabulous year for cryptocurrency. Bitcoin, and many other cryptocurrencies, hit all-time high market caps near the end of 2016. Since that time, the value of this digital currency has dropped by two-thirds.
The attention Bitcoin gained in December captivated many investors as well as people who knew little to nothing about cryptocurrencies. In addition to large investor gains that were frequently reported by news outlets, well-known investors, bankers and celebrities were publicly praising or denouncing bitcoin and other digital currencies.
Stories of investors becoming multi-millionaires caught the attention of the general public. New investors started researching ways to invest and created wallets on exchanges such as Coinbase. However, the stories also caught the attention of regulators. Governments around the world started writing regulations to control what many considered to be unregulated securities.
Bitcoin was released in January 2009. Satoshi Nakamoto, the pseudonym for the inventor of Bitcoin, has mined an estimated 1 million coins. Nakamoto’s true identity remains unknown though Bitcoin remains the most popular cryptocurrency out of more than 1,000 that now exist.
There have been many bright spots for cryptocurrencies recently. Japan started recognizing Bitcoin as legal tender in 2017 and adoption rates have grown as retailers such as Overstock, Microsoft and Expedia have begun accepting it for purchases.
But that is not to say that cryptos haven’t hit many rough patches, too. Bitcoin was adopted as a form of payment on the illicit Silk Road, a website on the darknet market known for selling illegal drugs.Several years after the FBI shut down the website, bitcoin price was affected by the Mt. Gox hack. The cryptocurrency exchange lost approximately 850,000 customer-owned bitcoin.
Keeping money in a cold wallet, rather than storing it on an exchange, provides additional security for users. Despite popular rumors to the contrary, bitcoin accounts can be hacked, even if users are using 2-factor security. ATMs may provide a safer alternative to cryptocurrency transactions on exchanges.
As the market continues to recover from the recent slump, interest in cryptocurrency trading and investment will rise. As interest increases, cryptocurrency ATMs should help digital currencies become established in the mainstream of society.