Tried to use a crypto ATM. Here’s what happened.

  • A Cryptobase ATM presents itself as a convenient way to deposit money and invest in cryptocurrency.
  • I deposited $20 into the cryptocurrency ATM and then received $13.22 in bitcoin after fees.
  • This article is part of “Master Your Crypto”, an Insider series that helps investors improve their skills and knowledge about cryptocurrencies.

A cryptocurrency ATM stands in front of a vape shop in West Palm Beach, Florida.

The white kiosk, installed by Cryptobase ATM, presents itself as a quick, easy and secure way to deposit money and invest in bitcoin, bitcoin cash, litecoin or ether, allowing customers to bypass entering their banking information.

While reporting on the Blockworks Permissionless conference in South Florida, I stopped by to see how practical it would actually be to use a Cryptobase ATM.

The whole process took about 40 minutes and I ended up losing 33.9% of the $20 I deposited. I wasn’t thrilled with the result, but it might make sense if you’d rather use a familiar technology like an ATM than an online crypto exchange.

The ATM was at the Vape & Smoke Shop in West Palm Beach. The shelves are filled with hookah pipes, rolling papers and nicotine cartridges. Store windows are covered in neon signs and stickers that say “bitcoin ATM Cryptobase”, “CBD”, “cigars” and “no loitering”.

On a Thursday afternoon, the kiosk was unoccupied so I had a zero minute wait. A store employee told me that on a busy day about five people would use the machine, usually the same people.

The first cryptocurrency ATM appeared in 2013 at a cafe in Vancouver, British Columbia. According to Coin ATM Radar, there are around 38,000 cryptocurrency ATMs in over 75 countries, with around 33,500 of them in the US.

Cryptobase COO Michael Telvi told Insider in an email that it has 175 kiosks installed and plans to expand “rapidly across the US to most major cities.” Telvi said the company has seven full-time employees and has outsourced much of its operations.

Cryptobase ATM

The Cryptobase ATM was unoccupied on a Thursday afternoon so I had a zero minute wait.

Morgan Chittum

How it works

At the Cryptobase ATM, I entered my phone number to create an account, scanned the QR code of my digital wallet, deposited money and then received bitcoin.

A few seconds after entering my phone number, I received an SMS code to enter at the ATM to verify my identity and create an account.

A warning in capital letters appeared on the screen: “WE ARE NOT RESPONSIBLE FOR ANY LOSS OF FUNDS DUE TO SCAMS.”

The message could be for a good reason. On January 10, the Federal Trade Commission issued a warning about scammers impersonating employees and directing victims to send funds via QR code and a cryptocurrency ATM.

“Here’s the main thing to know: No one from the government, law enforcement, utility company or award promoter will ever tell you to pay them with cryptocurrency. If someone does, it’s a scam, every time,” he said. the agency in a statement. .

After the ATM prompt, I set a four-digit password for my account and selected a token I wanted to buy. The screen prompted me to deposit $20 to $16,000. This location did not offer cash back – so if a customer deposited $100, they would have to invest that full amount.

So I selected which way I wanted to receive my bitcoin. To do this with the Cryptobase ATM, you must have a cryptocurrency wallet, many of which accept bitcoin. I opened my Coinbase Wallet app and scanned its barcode.

As I would at a traditional ATM, I received a receipt detailing my purchase.

Would I do it again? Probably not

There are disadvantages to the Cryptobase ATM, including its exorbitant fees.

I paid a 20% exchange fee along with a $3 charge at the ATM. I deposited a $20 bill and received $13.22 worth of bitcoin in my wallet about 40 minutes later. Both flat fees apply regardless of the amount you deposit.

As someone who rarely carries cash, I felt that using the ATM is unnecessary when there are already big exchanges like Binance or Coinbase that I don’t have to leave my apartment with to invest.

This kiosk also limited purchases to $16,000, while some exchanges have higher maximum amounts – and I can connect my bank cards to them.

Critics of centralized exchanges, however, may prefer a Cryptobase ATM.

It doesn’t require you to enter your banking information, just your phone number. The Cryptobase ATM was faster and easier to navigate than setting up an account with an online exchange. You don’t need to be tech-savvy to use a cryptographic ATM because it parallels an experience most of us are already used to.

So if you’re someone who wants the accessibility and user interface of a regular ATM, doesn’t mind 20% fees, and actually has cash, this might make a lot of sense for you.

If not, you can use that money to buy a mandolin cutter, a travel ship, or anything else $20 can get you.

This article is intended to provide general information aimed at educating a broad segment of the public; does not offer personalized investment, legal or other business and professional advice. Before taking any action, you should always consult your own financial, legal, tax, investment or other professional for advice on matters that affect you and/or your business.

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