Why Use a Bitcoin ATM?

This is a legitimate question. All of these ATM networks will charge fees. I have found CoinFlip to be the most reasonable fees at around ten percent. I end up with $45 of Bitcoin in my hardware wallet after feeding the ATM a fifty dollar bill. Sometimes the transaction fees on the exchanges are way better, but not always. There is no doubt the exchanges are usually lower transaction fees. They are not better on the privacy front though.

There is little to no anonymity on an exchange. These exchanges are
able to operate within the United States because they follow the “Know Your Customer” rules closely. Cryptocurrency regulations are convoluted and evolving. Dodging taxes is illegal. Given the ambiguity of regulations in the cryptocurrency space, it makes sense to keep a low profile.

The regulations will come. Cryptocurrency has proven itself to be a
threat to centralized control by bankers and nation states. To
attempt to curtail this threat, one should expect regulations and
taxes to be onerous. There is talk of an 80% capital gains tax put on
cryptocurrency.

Cryptocurrency holders can be assured of one thing in this space. Joe Biden will sign an executive order this week asking agencies to prepare for a cryptocurrency world and a digital dollar. Whatever the government hands down, the exchanges will immediately cooperate. Governments make the rules. The exchanges have promised to comply. This is how they have been able to continue to operate.

However, one can enter the cryptocurrency universe without using an exchange. One should do so if one wants true control. This path provides real privacy. The first step on this path would be obtaining a hardware wallet. The Trezor hardware wallet is a good option and can be obtained at
https://trezor.io for around $100.

The ability to stay fairly anonymous via the ATM network has its attraction. Despite the fees, one can dollar cost average into the space. You can become a “crypto lurker” while waiting to see how regulation evolves. To some paying for privacy makes perfect sense and so this is how they accumulate their crypto holdings.

All you need is to locate a Bitcoin ATM in your neighborhood. There
are more than you think. Simply use a search engine like DuckDuckGo and enter: “nearest Bitcoin ATM”. You will be amazed by how many there are and where they are tucked away.

You can go to one of these ATMs to put money directly into your hardware wallet. Go to the machine with your smartphone in hand. This is the only identity most of these ATMs require. If you provide a mobile phone number, a name and perhaps an email address, you are good to go.

The mobile phone has to work to receive texts. The rest of the information is on your honor. This surely beats the endless “Know Your Customer” merry-go-round. The waits when using an exchange can be interminable.

Once an ATM has been located, visit it with your phone in hand. Leave your
hardware wallet at home in a secure place. You will not need it at
the ATM. Once in front of the machine, follow the prompts to identify
yourself. You will be texted a code so you can move forward. When you
have put money into the machine, it will ask for the address of where
you want it sent. Find the photo of your QR code and put it in front
of the machine’s electric eye. Click OK and Viola!

If you plan to HODL then dollar cost averaging via a Bitcoin ATM can make
perfect sense. Dollar cost averaging will even out the inevitable volatility in the cryptocurrency world. It certainly will allow the hodler to wait for clearer regulations while still accumulating cryptocurrency privately.

Most big cities in the United States have a few of these Bitcoin machines
around. You can stand there and feed the machine fiat currency notes.
You will identify yourself with a phone number and a Bitcoin wallet
address. Once you go through the real world steps, it will become clear this may be the best path to true cryptocurrency privacy.

You will be able to wait to see what happens in the regulatory universe without having to show your hand right now. It is all perfectly legal. It is not to avoid taxes. The IRS would not like that.

This is a way to get involved without having to risk identity theft by providing so much documentation to relatively new entities like Coinbase and Binance. The Bitcoin ATM means you can put a little money in over time, but stay away from identity risks exchanges represent. So you pay a little more, you decide if it is worth it.

The above was largely excerpted from my book: Cryptocurrency Investing in the Age of Dollar Chaos