BEWARE of the Bitcoin ATMs

Bitcoin ATM

The entire cryptocurrency market grew from $18 billion to just over $610 billion this year. The number one cryptocurrency, Bitcoin (BTC) grew over 1200% in the past year. Mid-year, Bitcoin was picked up by the mainstream media and everyone was trying to get their hands on it. It received both positive and negative feedback from top financial analysts; even so, the Bitcoin craze was in full force. Most individuals wanting to get their hands on the cryptocurrency had a difficult time obtaining it because of the difficulty in navigating exchanges.

With these exchange issues, Bitcoin ATMs began to grow in popularity and could be found even in the strangest of places!

Source: ValueWalk

In the year 2017, the number is Bitcoin ATMs doubled. There are now more than 2000 machines worldwide, across sixty different countries. 75% of these machines reside within’ North America; more specifically the United States.

While this may seem like an easy solution to get your hands on the cryptocurrency, the distributors of these machines are raking in some major profits.

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CAUTION

It’s important to remember that these ATMs aren’t like traditional ATMs. These machines act as a cryptocurrency exchange, which makes money on the conversion by making a margin of the transaction. You even still have to download a bitcoin-wallet app where your bitcoin funds will be stored.

One analyst on Business Insider, Matt Weinberger, explained his entire experience with trying to purchase $1 of Bitcoin in Las Vegas. Weinberger said he put $11 dollars into the Bitcoin ATM and was told it wasn’t enough to receive any Bitcoin. It didn’t give him any explanation as to what the minimum was to receive any Bitcoin, so he canceled the transaction. “It warned me that in doing so, I would ‘forfeit’ my bitcoin, and not get any in return. Whatever,” said Weinberger.  “But then, my $11 never came back out. At all. I even asked for a receipt, which didn’t print. It’s gone, forever.”

He explains that he reached out to the BTC ATM’s company, Coin Cloud when he returned home. Coin Cloud’s response:

“The machine cannot refund the case. However, we can manually send you the bitcoin at the appropriate rate. The reason why your transaction did not go through was due to the miners’ fee. Miners fees are at $40-$45 per transaction. I am estimating that the amount that you will receive will be $1-2 in BTC. Please provide me with the phone number you used at the machine and a wallet address where you can receive BTC too.”

The issue with the entire Bitcoin ATM is that most who go to use these machines are new to the cryptocurrency world. The lack of information about the current price range of transaction fees is alarming. Who knows how many people this has happened to that didn’t bother contacting the company. Pretty much all ATMs have carrier fees but a fee of $40-$45 is 10 times the amount Weinberger wanted to even withdraw!

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ATMs Still On The Rise

Last week it was reported that when Bitcoin hit a low of under $10,000, ATMs in Singapore sold out of Bitcoin entirely. 

The cryptocurrency market is unregulated, and that is, partly, what makes it so popular. However, there is no doubt that more information should be available before investors start throwing their money away.

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