How crypto ATMs work

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Judging by the name, most people think that a crypto ATM functions like any other ATM. You enter some details, choose the amount you need, cash comes thundering out, and your crypto wallet balance is deducted. However, this is not what a crypto ATM does.

These ATMs actually have a very different function and operate more like a crypto exchange. Confused? Tag along as we quickly cover what crypto ATMs are and how they work. Let’s begin.What is a crypto ATM?Crypto ATMs are machines that allow you to purchase bitcoins or other cryptocurrencies using cash or a debit card.

Therefore, the term crypto ATM may be a misnomer; the only similarities between crypto ATMs and their cash counterparts are how they look and their requirement of a debit card.Now you might think that these machines are just exchanges with a physical location. Not quite. Crypto ATMs are stalls connected to a cryptocurrency network and typically not controlled by financial institutions.

However, the primary way they are different from any cryptocurrency exchange is that the crypto you purchase is redirected to the digital wallet address of your preference.Also Read: Top reasons why the Bitcoin sell-off is deepeningIn a cryptocurrency exchange, the crypto you buy is transferred to your exchange-hosted wallet, where the exchange controls your private key. These wallets are known as hot wallets. You also can transfer your tokens from your exchange wallet to your digital wallet.