What Are Bitcoin ATMs, And Why Are They Not In New Zealand?

There are plenty of ways to cash out your Bitcoin (BTC) and other cryptocurrencies. The most common method is to buy or sell your BTC through your exchange, convert crypto into fiat, and then transfer it to your local bank account. However, there’s a quicker way to cash out your investments or buy Bitcoins: it’s through a Bitcoin ATM (BTM).

Like a traditional automated teller machine, BTMs allow you to deposit and withdraw BTC. However, instead of connecting you to a bank, it connects to your cryptocurrency exchange through the internet installed in the machines. Once connected, you can buy or sell Bitcoin using cash, debit, or credit card.

Since their initial launch in October 2013, there are now nearly 22,000 kiosks and machines all over the world. It saw a 167% year-to-year jump in September 2020, with the United States alone recording a 127% increase. However, there’s not even a single one in New Zealand. But, why? What's stopping them from popping up around the country?

Read: How To Cash Out Bitcoin And Other Cryptocurrency In NZ

What is a Bitcoin ATM?

A Bitcoin ATM works similarly to a cryptocurrency exchange where you can buy and sell BTCs. Rather than a digital exchange, it’s a physical one equipped with a scanner, a cash dispenser, and a computer to organise your transactions. It generates blockchain-based transactions using a QR code, which sends BTCs to your crypto exchange.

Similar to a digital exchange, you can buy and sell BTCs and choose a fiat currency of your preference. You can also exchange physical money directly into BTCs and the other way around. You may also withdraw, deposit cash, or transfer funds to another bank account, depending on the BTM.

As these machines are connected to the internet, the price of Bitcoins is reflected in real-time. Before going to a BTM, you must have a secured wallet or exchange and have access to it. Make sure to double-check with your exchange after every transaction to confirm if it’s reflected successfully in your account.

How do I buy BTC using a Bitcoin ATM?

It depends on the BTM. Different machines have a variety of features and commands, so the process is not always the same. Most BTMs are easy to use, so you don’t have to spend a lot of time figuring out how to use them. 

1. Choose “Buy Bitcoin” on the BTM interface
2. Scan the QR code of your Bitcoin address using the built-in scanner
3. Provide some form of documents (valid IDs vary per BTM)
4. Enter the amount that you want to purchase
5. Insert cash, credit, or debit card into the BTM
6. Confirm your bank account details (depending on your payment method)
7. Wait for up to a minute for the BTM to process your transaction
8. Select the “Finish” option then get the printed receipt

How do I sell BTC using a Bitcoin ATM?

If you want to withdraw your BTC, here are some of the basic steps. It’s very important to note that these machines may charge fees. These are usually based on the percentage of the transaction instead of a fixed dollar value. The fees vary greatly depending on the BTM, but it usually averages at 7-10%.

1. Select “Withdraw cash” on the BTM interface
2. Choose Bitcoin then input the amount you want to cash out
3. Transfer your BTCs from your wallet to a valid address using your QR code
4. Wait for a minute or two for the BTM to process your transaction
5. Wait for the machine to dispense cash, then get the confirming receipt

Read: Guide To Cryptocurrencies In NZ: Invest, Buy and Trade

Can I send cash to a local bank account using BTM?

It depends on the machine. Some BTMs allow you to sell your Bitcoin, and then send it to someone else’s Bitcoin exchange. It’s also possible for your friend to withdraw cash instead of transferring it to their exchange. The process is similar to selling your BTCs.

However, instead of transferring your BTCs from your wallet to your valid address, send it to the given address of your friend or acquaintance. To confirm the transaction, use the valid QR code. To ensure that the transaction is successful, confirm it with your friend.

Does Bitcoin ATM only support BTC?

As with any other transactions, it depends on the BTM. Most machines support buying and selling of other cryptocurrencies other than Bitcoin. As there are plenty of cryptos, you may need to check if your chosen machine can process transactions of your chosen crypto. Otherwise, you can do all your transactions online.

Read: How Do Taxes Work With Your Crypto Assets In New Zealand?

Why should you use Bitcoin ATMs?

There are many ways to buy or sell Bitcoin and other crypto investments. So, why should you choose Bitcoin ATMs? While it may be more convenient, they may also incur higher fees. The great news is, BTMs also bring a lot of benefits. Here are the benefits of using BTMs.

• Convenient - Using BTMs is quick and easy! You don’t need to wait for a few days or even weeks just to process your transactions. Simply wait for a minute or two to buy and sell Bitcoin. All you need is a valid cryptocurrency wallet or exchange.
• Privacy - What’s great about BTMs is, all transactions are anonymous! As the records are simply kept in the blockchain, you can rest assured that your data, money, and transactions won’t be subject to hacking and fraud.
• Security - As you simply input a valid address, no information about your wallet is shared with anyone. Most BTMs also don’t store a lot of cash, so prying eyes and thieves won’t target you.

Although the number of BTMs are skyrocketing all over the world, it’s still not as numerous as traditional ATMs. As BTC and cryptos become more popular, you may soon see them in every corner, and take advantage of their benefits.

Read: Guide To Cryptocurrencies In NZ: Invest, Buy and Trade

If they’re so useful, why are they not in New Zealand?

There used to be. Seven years ago, Bitcoin Central launched its first Bitcoin ATM in Auckland. It’s a two-way BTM with buying and selling features, located on Karangahape Road. The future was looking bright for BTMs, as different companies also plan to launch them in Auckland and Wellington. However, these are rather short-lived.

Just one month later, it says it’s closing the BTM, citing a lack of support from the local banking sector. “Unfortunately, despite complying with all the legal requirements we have been unable to secure banking facilities. Without these, the Bitcoin ATM business cannot operate long term. The negativity from the banking sector to Bitcoin also threatens the ATM owner's other businesses. For me, it is prudent to shut the ATM down,” Bitcoin Central's Mike Steeneveld said.

For BTMs to work, it needs integration with the local banks so transactions between credit or debit cards are seamless. As this is crucial for the success of BTMs, they shut down one by one until no BTM is left in New Zealand.

Which countries can I use Bitcoin ATMs in?

The US alone has over 18,420 BTMs scattered across the country. The nearest one you can go to is Australia. It has 32 Bitcoin ATMs located in major cities. Sydney has the highest concentration of BTMs at 13, followed by Melbourne with 12. Three BTMs are stationed in Adelaide, while Brisbane, Launceston, Perth, and Surfers Paradise all have one machine.

Other countries with a sizable number of BTMs are Canada with 1,508, the United Kingdom with 200, Austria with 159, and Spain with 141. As of today, more than 75 countries and territories have at least one BTM — be it one or two-way.

Will they make a comeback in New Zealand?

Nothing’s certain for now. It may soon have a comeback when the banking sector finally supports the cryptocurrency market. As long as you’re in the country, you can use other methods of buying and selling your Bitcoin through a wallet or an exchange.

Nonetheless, make sure to invest in a competitive cryptocurrency. Aside from Bitcoin, Dogecoin, Ethereum, Dash, Litecoin, Monero, and Ripple can also be as profitable as your main crypto investment. While you’re at it, pair them with a cryptocurrency wallet or exchange with a lot of helpful features and low fees.

Compare cryptocurrencies in New Zealand, using our comparison tool here at glimp!