Bitcoin Forum

Is bitcoin bought through an atm considered cold storage?

I cannot find an answer on how secure it is.

Thank you

It depends on where the bitcoins are.

Cold storage means that the private key is stored somewhere that is not connected to the internet. It could be on a piece of paper, on a USB stick in a vault, or carved in stone.

The security depends on who has the private key and how accessible it is.

Even though the manufacturers claimed they won't keep the private keys, I wouldn't trust that completely and so I would suggest you to transfer the bitcoin to your new cold wallet / paper wallet.

Your private key may have been online. Since the ATM is not yours, you cannot guarantee that they would not record the private key. Since they need internet connection to send bitcoins, they might create the key online too. The machine might be infected with malware and your private key might be stolen.

Thank you guys, you're the best!

It would be a bit counter productive to steal from the customers of the ATM's. If it ever comes out into the public, that the private key was compromised on the ATM side, the company would be ruined. And believe me, the effort to get these ATM's in the field, and running, will be enough motivation to keep them honest.

BUT you get dishonest employees and it could be hacked, so it's better to get the coins to a safe cold storage, too eliminate the human factor in this scenario.

wow, i`m jealous that you have bitcoin atm near you.

but yeah, I think the bitcoin just purchased needs to be transferred since they hold keys.

You have to assume that it isn't for your own sake
Only btc's stored in addresses created offline qualify

I second that.

And in addition the device with which the key has been created offline should not be connected to the internet afterwards because it could have been infected with a virus prior to the creation of the key. This Virus could record it and then broadcast it once you go online again.
Best is to use a live GNU/Linux CD without any persistent storage device connected.

Not even the manufacturer of the ATM can guarantee the safety of your private key. I have seen wireless devices fitted with a pinhole camera above the keypad, transmitting video feed to someone sitting more that 50 meters away. {The pinhole camera was fitted onto a fake panel, stuck to the ATM housing}

Video was recorded and the person followed and pick pocketed to get the card. {They then just quickly watched the video and got the pin code and they draw the maximum amount of fiat from the card}

The same can be done with Bitcoin ATM's {Because odd panels, would not be easily spotted}

I saw screen captures of the device, and it was perfectly designed. {You would never have spotted it} I still have it somewhere, I will search for it and post it here.

My final verdict, nope it's not 100% safe.

If what you have written here is true then it means purchasing BTC from an ATM is out rightly not safe.

In the bitcoin world, people uaually have a "guilty until proven innocent" stance, and so it is IMO a good idea to first consider your bitcoin bought from ATM not 100% safe.
You could sweep the address and send the bitcoin to your personal wallet ASAP.

Is this the best option to purchasing from an ATM?

Not sure if it is the best option, but IMO it is definitely a better option than blindly considering that paper wallet from ATM as a secure storage.

I dont think so, its actually better to withdraw it to your wallet immediately then to keep it.

Generally, most of the ATM scans your wallet address QR code and when you purchase, they would send the coins to your address. No private key is exposed to the third party this way. However, if you generate a wallet from the ATM, there is no guarantees they would not be keeping the logs of the private key. If one day, it gets exploited, your private key would get exposed and you would lose your coins unless you have spent all of them. It is generally better to get the funds out of the paper wallet first as the paper wallet would be exposed to a third party(ATM) already.

haha me too jealous, but hear hear in my country would put 2 pieces atm bitcoin. I hope it's true and fast, realized :)

Has anyone seen the Tested atm "we buy a bitcoin" video? that was ridiculous.

This one https://www.youtube.com/watch?v=vnm4xFC2xNo ?
That guy need to scan his hand 4 times, take a picture, put in his ID and wait for some time in order to buy bitcoin with a high fee.

It depends on what you do with it.

Better make sure those ATM dont have corrupt employees and logging private keys, once its a good enough balance.

I think this is very good advice. Generally speaking cold storage is considered to be BTC that is in an address/wallet that only you have ever controlled. Since the ATM operator obviously had to provide you with the private key, they had to have been in possession of it at one point. I would also not doubt that they would keep a record of the private key for customer service type reasons, for example if someone can prove they bought BTC from the ATM but the receipt was destroyed, they could send the purchased BTC to an address of your choice. 

If you bought bitcoins through an ATM be sure to send them to an offline adress that you previously put in cold storage.

And how you would proof that your key got stolen from the atm?

Not only that.
For cold storage, your address should be created in a machine without internet connection.
Plus, your wallet should never be placed in any online machines.

I would say it is more important to have your cold storage address be one that you created with your own computer. I think that using a ATM address as cold storage is very much similar to using an address that was created on a website that creates addresses on the server side (instead of the client/browser side).