There are many reasons to use a Bitcoin ATM, but by and large, the main reason people use them is to maintain anonymity and simplify a quick trade. It’s no secret that the oldest bitcoin believers turned to the technology as a way to free themselves from the centralized banking world. Bitcoin ATMs help keep that dream alive, however, as regulations continually increase, so do ATM rules. Don’t take Bitcoin ATMs for granted, especially in Canada. Seeing as regulations are tightening, we may eventually lose the anonymity option that Bitcoin ATMs currently provide.
So how do we transact through one of the machines? To buy and sell bitcoins using a bitcoin ATM in Canada, you must first locate a machine that you will want to use. You will need to use a bitcoin ATM map and search for your area. Once you find a list of ATMs in your area, you will need to determine which one you will want to use and if possible; what type of machine it is.
Once you know the type of machine, you can do a quick google search on the different features it has, and which ones it doesn’t have. This will prepare you in advance so that there are no surprises. Knowing the machine type in advance is not a requirement, just something good to know. There are around 30 different varieties of bitcoin ATMs on the market right now, with roughly 20 different manufacturers having machines installed. It may be difficult for the typical user to figure out how to use a bitcoin ATM to buy bitcoins and what the differences are between different Bitcoin ATMs. This quick how-to guide will focus on the basics, and arm you with enough information to be able to confidently prepare yourself prior to stepping in front of one of these machines.
At most bitcoin ATMs, there is a standard buying procedure which includes the following steps:
- Verification – This is optional, and may vary significantly depending on the type of machine. Usually verification is required for larger deposits/withdrawals.
- Provide a bitcoin address for deposit – This address can be produced and printed/emailed on the spot at some ATMs, but it’s best to have your own before using one. This means you should come to the ATM with your bitcoin wallet address QR code pre-printed already.
- Put cash into the ATM. Bitcoin ATMs usually only accept cash because of the nature of chargebacks that people would do on credit and debit cards.
- Verify the operation – This is a confirmation step that shows that the bitcoins were sent to your bitcoin wallet address. Depending on transaction fees, the speed may vary. Typically, the expected block update time for bitcoin is 10 minutes.
The following steps vary from ATM to ATM, and you’ll need to follow the steps displayed on the machine that you are using. That is why knowing what machine you will be using ahead of time will let you know the intricacies and features it offers. It’s vital to remember that even if a machine’s software/hardware supports compliance procedures, they may or may not be enabled, depending on the operator’s preference. As a result, different types of machines may have varying verifications and restrictions.
- Select “Buy Bitcoin” from the drop-down menu.
- Pick a coin (e.g. Bitcoin)
- Select Scan QR to scan the wallet’s QR code.
- Cash bills should be inserted.
- Select “Finish” from the drop-down menu.
- Take the printed receipt with you.
How to Locate Bitcoin ATMs in Canada
There are many different websites and apps available that will show you where different cryptocurrency ATMs (including Bitcoin) are located in your area. One such website you can use is coinatmradar’s Bitcoin ATMs in Canada map.
Bitcoin ATM History in Canada
Canada was the first jurisdiction to pass cryptocurrency regulation in 2014, albeit it took some time to implement. The Canadian Finance Minister stated in February 2014 that virtual currencies such as Bitcoin would be subject to anti-money laundering and anti-terrorist financing rules.
The Governor General of Canada approved an amendment to Bill C-31 in June of that year that would treat cryptocurrency businesses as MSBs, and the Canadian Department of Finance circulated a document of the proposed regulations in June of that year, but the law was not in Regulations or in effect as of January 2019.
Businesses dealing in virtual currencies, however, are now considered Money Services Businesses (MSBs) by FINTRAC, Canada’s Financial Transactions and Reports Analysis Centre, as of July 2020.
The Canada Revenue Agency (CRA) commissioned an investigation into Bitcoin ATMs in 2018 to determine whether users were following tax laws. It was discovered that the number of Bitcoin ATMs in Canada increased by 20% over a two-month period, from December 2017 to February 2018.
According to The Star, in June 2019, Vancouver, BC—the city where the world’s first Bitcoin ATM was installed six years earlier—was considering a ban on the machines due to money-laundering concerns.
Common Bitcoin ATM Questions
What are the limits to buying?
Yes, most Bitcoin ATMs have limits. The reason that limits exist and are standard across most Bitcoin ATMs is because of the Canadian KYC and cryptocurrency regulations. KYC laws require financial operators to: ‘Know-Your-Customers’. This is a strategy used around the world to limit the amount of scams, tax evasion, and more.
Limits are also usually based on verifications, so anonymous customers get the lowest limit, once again based on anti-money laundering precautions. While SMS-verified customers get a higher limit, ID-verified customers get a higher limit, and so on.
Limits and verification procedures differ greatly from operator to operator; information about limits and verifications can usually be found on the ATM listing, or by calling the location where the ATM is placed. Otherwise, you will also see the limits displayed on the machine when you are using it.
Can I buy large amounts of Bitcoin?
Some machines can handle such large transactions, while others cannot. You must inspect specific locations in the surrounding area. Regarding verifications, this varies by operator, but for a large amount, you will probably have to do a higher level of verifications prior to doing the transaction (e.g. phone verification via SMS + ID scan verification). However, this is dependent on the location you are using, so please double-check ahead of time.
What to do if I run into errors in the ATM?
Different machines may run into different errors. This was much more common a few years ago, but Bitcoin and other cryptocurrency ATMs have since undergone a lot of improvements and are now very reliable. However, the best option is to contact the bitcoin ATM operator of the machine you used so that they can resolve the issue for you. Typically, you can find this information on the machine you are using.
How to send someone Bitcoin via the bitcoin ATM?
Bitcoin ATMs should not be used to buy or sell Bitcoin for yourself. If you’re sending bitcoin to a family member or someone in another country, you should first confirm their wallet address before sending the bitcoin through your bitcoin wallet. Sending cryptocurrency from your wallet to another wallet is another topic that should be researched and understood well in advance.
Where do I get my wallet address QR code?
You must have a QR code with you, but this does not imply that you must bring a computer and attempt to scan it from the screen. You can print a QR code from your PC wallet and bring it with you on paper to scan. The simplest way to find your address is to go to blockchain.info, put in your address and click search. Find your address and the QR code will be displayed along with other blockchain data.
Can I use a debit or credit card?
Due to the reversal nature of card payments, Bitcoin ATMs operate with cash rather than credit/debit cards.
Can you buy partial bitcoins at the ATM’s?
Yes, in fact Bitcoin is usually purchased as fractional amounts. The tiniest fraction of a Bitcoin is called a satoshi. You may have heard the phrase: ‘Stacking sats’. You can buy a fraction of a bitcoin or a whole bitcoin, just like you can buy a slice of pizza or a whole pizza. So even if you’re risk averse or just want to dip your toes in crypto you can start with as little as $10.
Using a Bitcoin ATM is one of the most popular ways to buy and sell Bitcoin anonymously. This usually comes at a slight premium, as some of the ATMs charge higher fees than an online Canadian crypto exchange like Netcoins would. It is also easier to purchase from an online exchange, since you don’t have to leave your house to do it. However, Bitcoin ATMs are still very popular, because many people value privacy and want to remain anonymous. Canada and the world are all cracking down on crypto regulations, so there’s a good chance that eventually even the Bitcoin ATM rules will become more strict. Until then, if anonymity is your main concern, find the nearest one and stack those sats!