Buying small amounts of Bitcoin at a Honey Badger ATM is easy and largely non-KYC, when compared to an exchange, but it is much more expensive.
NOTE: All $ amounts shown below in Canadian (CAD).
Honey Badger Bitcoin ATMs have shown up in malls and gas stations across Canada. These automated kiosks offer people a quick, easy, accessible method for getting into owning Bitcoin when compared to using an exchange.
I recently tested my local ATM out to see what the process looked like and check the cost of stacking Sats using these machines. The concept is simple, all you need is a mobile phone, a BTC wallet and some cash. The Honey Badger ATM will ask you for your phone number and send you a text message to confirm ID, but that’s as far as the KYC goes for small amounts of Bitcoin. Here’s the process:
- You will need to enter your mobile phone number to receive a confirmation number via text (SMS).
- Once you’ve typed the confirmation number into the ATM you will need to agree to all the terms and conditions. The good news is that for small BTC purchases, this is as far as the KYC will go. Larger BTC purchases ($1000-$9999) will need a photo ID.
- Select your coin and you will be prompted to insert your cash. There is a minimum buy of $10, but keep in mind that, due to the transaction costs you will need more than $10. For my transaction, there was a $5 fee.
- Once the machine accepts your cash, it will prompt you to scan your wallet’s QR code.
- The machine will provide a Receipt of the transaction if you select that option.
- BTC WILL NOT show up in your wallet immediately. A text message will inform you of the TX ID and that “Bitcoin is sent every 30 mins.” So then you wait.
So how did it work and what did it cost?
What it Cost:
I inserted a $20 bill. $5 was used for the transaction fee and the rest was used to purchase BTC at an exchange rate of $41,221.
At the same time, exchanges were selling BTC at an exchange rate of $35,510. So, in addition to the extremely expensive transaction fee of $5, I was buying extremely expensive SATs - comparatively.
I received 0.00034205 BTC which, at the live price was equivalent to around $12. I don't know where Honey Badger gets their exchange rate from, and I don't know how/when they adjust it but by any measure, this was an expensive transaction.
How it worked:
I walked away from the ATM and continuously checked my wallet for the next 30 minutes to see if the BTC had showed up. I finally got distracted with something else and returned to my wallet to find that it had taken about an hour for the BTC to show up in my wallet. But it did show up. Interestingly, it came with a notice saying that, until the transaction confirmed, the seller could reverse it.
Would I do it again?
Yes. Despite the expense, I like the lower KYC and accessibility of the ATM. I like that any cash you can mine from selling used books, getting refunds for recycling garbage, or any cash found in a gutter, or pulled from your physical wallet can be quickly and easily converted into BTC.