Bitcoin’s massive rise in popularity has led to an increase in Bitcoin ATMs. These machines allow you to buy Bitcoin with cash in just a few minutes. Every operator charges a Bitcoin ATM fee to their users, just like traditional ATMs. But why are these fees in place? How are they determined? And why do they vary from machine to machine? Read on to better understand what Bitcoin ATM fees go towards, and how they help operators provide better services for you.
What are Bitcoin ATM Fees?
All Bitcoin ATM transactions have two different types of fees.
The Miner Fee
Every Bitcoin transaction must be added to the blockchain to be considered valid. The blockchain is the official public ledger that records all Bitcoin transactions. Miners validate transactions and add them to the blockchain.
Miners are owners of extremely powerful computers that connect the network. The miners working to continually validate transactions on the network give it decentralized properties. To incentivize the miners for the power and energy used to execute these validations and support the network, they receive financial rewards. Each transaction becomes a block in the blockchain, and as each block is added it creates a block reward. These financial rewards for the miners turn into fees for those posting transactions on the network.
This setup means that every Bitcoin transaction requires a fee that goes directly to the miners. This fee can vary based on your desired speed of validation and transaction size. Coinsource pays the miner fees for you while most other Bitcoin ATM operators pass on this variable fee to their customers.
The Operator Fee
Like traditional ATMs, Bitcoin ATMs allow you to exchange cash on the go. However, instead of putting money onto a card, you are converting cash directly into Bitcoin, stored within a wallet on your phone. Secure identity verification ensures the safety of each transaction.
Average Bitcoin ATM fees range from 11% to 25%. Coinsource has the lowest Bitcoin ATM fee at 11% nationwide all the time, with an accurate Bitcoin price and absolutely no hidden fees. Bitcoin ATM operator fees are fixed fees which include their operational and equipment costs that must be covered.
These costs can include:
Rent. Locations hosting a Bitcoin ATM get paid for subleasing the space the ATM requires.
Software. Bitcoin ATMs have software that comes with development and maintenance costs.
Compliance. Being a money-service business within the Bitcoin industry requires a robust compliance program and department in order to obey state and federal regulations.
Hardware. Bitcoin ATMs aren’t free to purchase or maintain, and each kiosk comes with its own upkeep costs.
Support. With the industry being new, we are happy to provide live 7-day a week support to our customers that may need help making their first cash-to-Bitcoin transaction.
How The Fees Work
First, you’ll need to create an account, then find a Bitcoin ATM near you. Let’s say you have $100 you want to spend on Bitcoin. If you only put this amount into the machine, then the fees will be subtracted from the total deposited.
However, if you want exactly $100 in Bitcoin, you will need to deposit $100 plus additional cash to cover the Bitcoin ATM operator fees. This covers the operator costs and miner fees. In this instance, the overall Bitcoin ATM fees would total roughly $12-$25 on average (depending on location, additional fees and time of day) or $11 at any Coinsource kiosk.
Most operators display a portion of this fee as a flat percentage, with the rest coming from the higher spot price of Bitcoin being offered. Additionally, many operators will adjust the fee based on the time and location of the transaction.
Updated Fee Comparison
You can find the transaction prices for most Bitcoin ATM locations on Coin ATM Radar. Be warned, not all displayed prices are accurate, and many do not include miners fees.
Why Bitcoin ATM Fees Vary
Transaction fees for Bitcoin ATMs depend on a variety of factors. These include the location, transaction size, and more, depending on the operator. Each Bitcoin ATM operator is able to determine fees however they wish. However, they must remain compliant with state and federal regulations.
But what about companies that promise the lowest fees? With many operators you have to look at more than just the stated fee. For example, some companies may keep their stated fee low, but then inflate the cost of Bitcoin, or add on miner fees or other fees, raising the true fee per transaction.
For example, one provider showing a buy rate lower than the everyday low fee of Coinsource was also showing a Bitcoin price that was over 6% higher than the true Bitcoin price. This inflated price means that your $100.00 purchase would net fewer Satoshis in the other provider than you would net on Coinsource, simply due to the difference in Bitcoin price being offered. See the full breakdown below:
|Included Hidden Rate||$0.00|
|Total Bitcoin Purchased||0.00191813032|
|Included Hidden Rate||$3,521.76|
|Total Bitcoin Purchased||0.00184511122|
(These numbers are used for demonstration purposes only)
This shows the difference that an accurate Bitcoin price can make to your wallet. Double check the price displayed on the kiosk you’re using with the real-time price of Bitcoin to ensure there are no additional fees being hidden.
Other operators sometimes vary the transaction fee based on the location. Heavy-use locations may have lower average fees than low-use locations. This can make it difficult to trust that you’re getting the best price possible, and will eat into your cash even further. That’s why Coinsource keeps our 11% fee consistent all the time, across the nation.
The Coinsource Difference
With Coinsource, you can trust that the price you see is exactly what you pay. Coinsource lets customers know exactly what they are paying for a transaction with clear, accurate Bitcoin prices. We are committed to keeping all transactions transparent for you, which is why our fees are kept low and consistent at 11% nationwide. Coinsource does not increase fees at different locations.
We also absorb the mining fee. Bitcoin miners operate by prioritizing the companies that give them the highest incentive, which means you have to pay more to get your transaction verified faster. By covering that cost, we keep your fees lower, transactions faster, and keep the fluctuating network from affecting how much you pay to trade Bitcoin.
Coinsource always shows you the true price of Bitcoin at the time of your transaction. We keep fees competitive and we prioritize transparency to our customers. Create an account today to gain access to our industry-low fees and transparent Bitcoin prices!
Coinsource values your security and your privacy. Unlike trading online, buying through a Coinsource Bitcoin ATM gives you a trusted partner for your cash to Bitcoin transactions. With Coinsource, all you need is a wallet and an account to trade at any of our ATMs easily and conveniently.
Understanding Bitcoin ATM Fees
Entering the world of crypto when you’re used to traditional banking and currency can be intimidating. Just like traditional banking, it is all about finding a company you can trust to help guide and provide you the ease and convenience you are looking for.
When it comes to Bitcoin ATMs, the most important way to empower yourself is to understand where the fees go, how they are calculated, and how to find the ATM with the lowest – or most consistent – fees. It is important to know that you’re getting the best Bitcoin price and clearest fees at the ATM you are using!
Coinsource is the world leader in Bitcoin ATMs. With a focus on compliance and ease of use, Coinsource is aiming to bring Bitcoin to the masses. Follow for blogs about Bitcoin, finance, company updates and Bitcoin ATM information!