One of the key myths that need to be busted is that they are anonymous. Although they themselves are not very anonymous in nature, some instruments and ways to transact in them can be. Is Bitcoin ATM one of them? Are Bitcoin ATMs anonymous? Let’s find out.
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Bitcoin ATMs: How Do They Work?
Bitcoin ATMs look like a traditional ATM but they are not connected to your bank accounts. Instead, you can swipe a card or in some ATMs, use fiat cash and get a receipt for Bitcoins that will directly transferred to your wallet.
Thus, Bitcoin ATMs, no matter how similar they look to traditional ATMs, function quite differently. But are they anonymous?
Anonymity of Bitcoin ATMs
Bitcoin ATMs, unless it is a machine with full verification features turned on, are usually quite anonymous. Since they don’t get linked to your bank account, there is little to no way of tracing you.
Now, your Bitcoin wallet addresses are what the Bitcoins are transferred to and as you know Bitcoin wallet addresses are long strings of numbers that are difficult to track down.
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So what does it typically look like when you use a Bitcoin ATM to get some Bitcoins for yourself? Unlike a traditional ATM, where you are drawing out your own money from your bank account, Bitcoin ATMs represent a purchase.
Here, you have to pay the requisite amount with a debit card into the ATM. After that, the equivalent number of Bitcoins will be transferred to your Bitcoin wallet address, that you provide.
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However, what you must note is the fact that you will have to shell out that extra buck for getting the anonymity that a Bitcoin ATM ensures.
Usually, the transaction fee is about 7 per cent or even more than that. Besides, the rate of purchasing Bitcoins may prove to be somewhat more expensive than than what you would get at a usual exchange.
The Bitcoin ATM is connected to an exchange from where the Bitcoin is transferred to your ATM .
Of course there are other ways of having your Bitcoin transactions be anonymous, like using them to buy gift cards on supporting sites for example. However, if Bitcoin ATMs are indeed available in your area, they can be an extremely convenient.
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