How Does a Pelicoin Bitcoin ATM Work?
If you’ve come across one of these machines in your area, you may be wondering, “How does a Bitcoin ATM work?” Afterall, it is not as though Bitcoins are inherently physical coins or bills, even if stock photos often portray them that way, to make the concept more concrete. The machine clearly won’t dispense coins into your hands. However, Bitcoin ATMs do exist and provide their users cryptocurrency in exchange for traditional currency like U.S. dollars. How exactly does that happen?
Cryptocurrencies have come a long way since the introduction of Bitcoin in 2009, which essentially set everything in motion. 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?
Before we dive into the main question of this post, we’ll explore a few key concepts that help to frame the emergence and use of the Bitcoin ATM, to make it easier to understand the specifics.
The Growth of Cryptocurrencies
Discussing the growth of cryptocurrency itself is a great place to start when researching Bitcoin ATMs for the first time. This is because it clears up a few common questions people tend to have when they initially become interested in cryptos. So, in order to avoid any confusion throughout this post, we’ll start with a brief history of cryptocurrency; or more specifically, how it’s grown over the years.
Satoshi Nakamoto published a white paper in 2008 titled Bitcoin: A Peer-to-Peer Electronic Cash System. Although digital currency was conceptualized before the Bitcoin whitepaper was released, Nakamoto’s work was the first concrete plan for cryptocurrency.
Soon after, Nakamoto mined the first block. Ever since then, Bitcoin, and cryptocurrency in general, have exploded into popularity and its uses continue to evolve.
Now, what exactly are blocks, and what does it mean to mine them? The answer isn’t as complex as you might think.
MINING AND EXCHANGES
As we mentioned earlier, Bitcoin used to get a bad rap because of how hard it was to initially obtain. This is mostly because cryptocurrency exchanges didn’t exist yet. In the earliest days of cryptocurrency, most people obtained cryptocurrency through “mining.” In short, this process involves Bitcoin miners actually creating new currency by verifying a certain number of transactions. Yes, the concept is simple, but the mining process is actually more complicated than it sounds because it requires the miner to have powerful hardware and software in addition to a plentiful energy source. For this reason, 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.
The introduction of exchanges helped to legitimize Bitcoin as a tradeable currency, and its uses and applications continue to develop to this day. However, that does not mean that it is always easy for new crypto enthusiasts to directly use an exchange; cryptocurrency ATMs can go a long way to helping people easily purchase crypto.
May 22nd is an important date for crypto enthusiasts because it marks the first time cryptocurrency was used in a real life transaction. Laszlo Hanyecz purchased 2 pizzas for the price of 10,000 BTC, resulting in the crypto-community specific holiday of Bitcoin Pizza Day. Silly as its name sounds, this event mattered because it showed how cryptocurrency could be a payment method.
IN-PERSON TRANSACTIONS
Since that groundbreaking first transaction, Bitcoin’s value has skyrocketed, although there have of course been ups and downs over time. As a result of the success of the concept, Bitcoin and other cryptocurrencies began to be viewed by potential customers as an investment as well as a legitimate currency. This new outlook prompted the need for a simpler way to purchase and sell cryptocurrency, no matter what the user’s intentions are.
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 Traditional Currency ATM Work?
To understand the ins and outs of how a Bitcoin ATM works, it helps to first understand how a traditional or “fiat” currency ATM works. You may have used one before, but do you really know the details of what happens? ATMs allow traditional banking customers to execute certain financial transactions (deposits and withdrawals) at a kiosk that is connected to their bank. To begin, the user inserts or taps their ATM card, which contains their account information encoded on a magnetic stripe or chip. The next step is for them to input their unique PIN number as a way to authenticate their identity. By connecting to the bank's systems the machine is able to verify the PIN and account status. If this verification is successful, the user indicates what they want to do, such as withdrawing cash, depositing funds, checking balances, or transferring money. If the transaction is a withdrawal, the ATM dispenses cash, and if it’s a withdrawal, it accepts your money. It then prints a receipt, and updates your account with your new balance accordingly. Working within the traditional banking system, this is the typical process for an ATM. Now let’s get into the similar, but different, way that a Bitcoin ATM works.
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. Bitcoin ATMs were created to simplify the buying and selling process, making it more user-friendly, particularly for new users. Some Bitcoin ATMs are unidirectional, meaning they only allow you to turn cash into crypto, whereas others are bi-directional, meaning you can also turn crypto into cash.
If you plan to buy crypto, you might think that you need to use an exchange to do so. However, traditional cryptocurrency exchanges can get quite complicated, and they often intimidate and confuse new users. ATMs introduce the convenience of hassle-free transactions without the need to create an account. On top of that, you know your information is safe because you know who you’re working with when you use an ATM. Pelicoin’s support team is just a phone call or an email away.
However, as you’ll soon read, the process for using a Bitcoin ATM is a little bit different from using a traditional ATM. We’ll go into detail below so you can know what to expect before you decide to try one out.
YOU’RE CONNECTING TO A TRUSTED EXCHANGE
How does a Bitcoin ATM work for you when it comes to interfacing with crypto exchanges? Unlike a regular ATM, where you’re accessing your bank account, Bitcoin ATMs are connected to the Internet and facilitate transactions between a user and a cryptocurrency exchange. So yes, these are the same types of exchanges online, but users don’t have to deal with the hassle of keeping track of multiple accounts. It also means you don’t have to learn how to use an exchange; the machine does it for you. Because these machines do not require a traditional bank account, users can conduct transactions privately, securely, and with an enhanced degree of privacy. However if you have a crypto wallet set up, you can use that at the machine with your wallet address or QR code. Don’t worry if you don’t, though. In that case you can create a paper wallet at the machine, so you’ll still be able to receive your cryptocurrency.
Above all else, people love Bitcoin ATMs because they know they can be trusted. Online scammers have taken advantage of the abundance of traditional, online crypto exchanges. New users have trouble differentiating between legitimate and false exchanges; that’s why Bitcoin ATMs eliminate the risk and protect your cyber security, particularly when you use an established company like Pelicoin’s Bitcoin ATMs.
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.
This is just one example of how using a Pelicoin ATM personalizes the world of cryptocurrency for our customers. We’re a business just like any other, so we know that great customer service is very important, and if you have any questions, comments, concerns, or issues concerning your transaction we’re just a phone call away. You’d be hard-pressed to find that same service with an online exchange.
How to Use a Pelicoin ATM: Step by Step
Now that you know how a Bitcoin ATM works, how can it work for you? If you want to convert your cash into cryptocurrency, Pelicoin makes it easy to do so at one of our over 30 machines. When you find one of our machines in the course of your daily life, at a convenience store or when stopping at a gas station, you can be confident that you will have an uncomplicate crypto-buying experience. With a Pelicoin ATM, you can buy and sell Bitcoin, Litecoin, and Ethereum. Here’s how:
WHAT YOU NEED
At least $20 in U.S. currency (the minimum transaction amount, but this is only for Bitcoin transactions)
Address or QR code for your digital wallet (if you have one--this is not necessary)
Your cell phone (for two-factor authentication purposes)
BUYING CRYPTOCURRENCY
All of our ATMs allow you to convert U.S. dollars into the cryptocurrency. Here is a detailed process for how to buy crypto at our machines.
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
Most of our machines are unidirectional, allowing you to purchase cryptocurrency, converting your cash into crypto. However, if you are using one of our two-way (bi-directional) machines, such as our St. Charles Street, New Orleans ATM, you can also sell cryptocurrency. Here is how:
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.
As you can see, the process is relatively straightforward and forgiving to newcomers. At Pelicoin, we’re committed to simplifying the purchase and sale of cryptocurrency and introducing new people to the world of crypto, one transaction at a time.
Remember You Can Always Contact Pelicoin for Support with Your Transaction
Beyond what you can learn from reading this article, 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.
Got Questions beyond “How does a Bitcoin ATM work?” We have answers!
If you’ve never used a cryptocurrency ATM, and possibly even if you’ve used a crypto ATM once or twice in the past, you probably have quite a few questions about using them. As a newcomer to buying crypto from ATMs you may wonder about the fees involved in using a Bitcoin ATM and whether you need to show your ID documents at the machine. Furthermore, you might also want to get some idea of how long it takes to use a Bitcoin ATM and how much cryptocurrency you can buy in a day. The good news is that you’ve come to the right place to get all kinds of cryptocurrency questions answered, where the passionate cryptocurrency experts at Pelicoin have history as a trusted name in Bitcoin ATMs.
Pelicoin wants to ensure that you find everything that you need to have a great experience purchasing crypto, including understanding the process and feeling comfortable with your level of knowledge of cryptocurrency. For this reason our blog provides lots of articles about cryptocurrency. We can answer your questions about where to find a Bitcoin ATM, what to know about other cryptocurrencies besides Bitcoin, and more.
The Most Important Thing To Know About Bitcoin ATMs: Pelicoin’s Are The Best
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, especially if you live in, or are planning to visit. Alabama, Louisiana, Mississippi, Tennessee, or Texas!
Visit one of our many Gulf South locations today to turn your cash into Bitcoin, Ethereum, or Litecoin.