The Bitcoin ATM Has a Dirty Secret: It Needs a Chaperone

[CryptoCurrencyInc.com]

The Bitcoin ATM Has a Dirty Secret: It Needs a Chaperone

When Mitchell Demeter and Jackson Warren opened the world’s first bitcoin ATM at a coffee shop in Vancouver, it was an instant success. People actually lined up to use the machine, which processed about $1 million in digital currency transactions over its first month.

But one day in November, a few weeks after launching the ATM, Demeter noticed something peculiar as he perused the machine’s transaction data at his office, across town from the coffee shop. At one point, the machine had voided 15 transactions in a row, for no obvious reason. So he drove down to the cafe, and as he walked through the front door, he immediately saw the problem.

A man was sitting next to the machine, at one of the cafe’s wooden tables, and he was holding a sign that read: “Don’t Pay Transaction Fees.” This very human entrepreneur, you see, was undercutting the world’s first bitcoin ATM. As people walked in to use the machine — which was charging a 7 percent transaction fee — he offered to exchange their money, by hand, at a lower rate.

http://www.wired.com/wiredenterprise/2014/01/bitcoin_atm/

[hilariousandco]

Haha, good idea. Capitalists gonna capitalise. I wonder if that guy sat there all day?

[jtpeters]

7% is high but it is rather convenient.

Some offers on LocalBitcoins are at a 100% premium.

[GigaCoin]

7% is high but it is rather convenient.

Some offers on LocalBitcoins are at a 100% premium.

ATMs cost money for floorspace rent, electricity, maintenance, security, staff for repairs, etc. 7% is reasonable

[BitCoinsLOL]

He couldn't call the cops on they guy he has no legal right to be there and do that. If I pursued all the avenues so I could legitimately put an ATM there first thing to do is ask the cops to approach this person and ask why they are doing business illegally and watch while he's arrested.

[tvbcof]

He couldn't call the cops on they guy he has no legal right to be there and do that. If I pursued all the avenues so I could legitimately put an ATM there first thing to do is ask the cops to approach this person and ask why they are doing business illegally and watch while he's arrested.

Coming up with some guidance and case law to squash the likes of this guy sounds a good task for the Bitcoin Foundation trade group.  He's clearly a threat to their membership.  They can work in integrating DRM into Bitcoin as a parallel project.

[ArticMine]

He couldn't call the cops on they guy he has no legal right to be there and do that. If I pursued all the avenues so I could legitimately put an ATM there first thing to do is ask the cops to approach this person and ask why they are doing business illegally and watch while he's arrested.

Coming up with some guidance and case law to squash the likes of this guy sounds a good task for the Bitcoin Foundation trade group.  He's clearly a threat to their membership.  They can work in integrating DRM into Bitcoin as a parallel project.

No but the owners of the coffee shop can ask him to leave. If he refuses then call the cops.

Edit: As for DRM in Bitcoin one needs blobs of propriety code and closed propriety networks in order to hide the private keys for DRM to work. This will not work with Bitcoin since it is FLOSS and an open network.

[tvbcof]

He couldn't call the cops on they guy he has no legal right to be there and do that. If I pursued all the avenues so I could legitimately put an ATM there first thing to do is ask the cops to approach this person and ask why they are doing business illegally and watch while he's arrested.

Coming up with some guidance and case law to squash the likes of this guy sounds a good task for the Bitcoin Foundation trade group.  He's clearly a threat to their membership.  They can work in integrating DRM into Bitcoin as a parallel project.

No but the owners of the coffee shop can ask him to leave. If he refuses then call the cops.

Often it takes a little prodding to make sure that the likes of the coffee shop owner 'do the right thing.'  Trade groups like the Bitcoin Foundation provide the muscle and the organizational ability to make this kind of thing happen.  We cannot afford to have the free market breaking out ya know?

[tvbcof]

Edit: As for DRM in Bitcoin one needs blobs of propriety code and closed propriety networks in order to hide the private keys for DRM to work. This will not work with Bitcoin since it is FLOSS and an open network.

I was being tonge-n-cheek about DRM, but...deficiencies can be fixed you know?  The low hanging fruit is that there is no functional blacklisting authority and identity registry yet, but it's underway.  Once that infrastructure is in place BLOBs can be added.  The most useful and pernicious BLOBs are not added at the application layer anyway.

[5thStreetResearch]

7% isnt that bad considering the volatility and delays in depositing/ receiving money from the exchanges

[C. Bergmann]

pretty nice idea  

I think that's fine, so the atm could become the center of a alltime satoshi square ...

another question about the atm:

If it is a two-way atm - how can you change btc against cash? Do you have to wait for six confirmations? An instant confirmation would be an invitation for double spending, am I right?

[zunath]

7% is high but it is rather convenient.

Some offers on LocalBitcoins are at a 100% premium.

ATMs cost money for floorspace rent, electricity, maintenance, security, staff for repairs, etc. 7% is reasonable

Not only that, but you have to also factor in the fact that Robocoin takes a percentage of what you earn. On top of that you have to pay a certain percentage for the exchange fees. It's high because there's a lot of people in the middle of the process.

[bumpusee]

lol funnyyyy
smart too

[smoothie]

GENIUS! 

Epic trolling.

[empoweoqwj]

The Bitcoin ATM Has a Dirty Secret: It Needs a Chaperone

When Mitchell Demeter and Jackson Warren opened the world’s first bitcoin ATM at a coffee shop in Vancouver, it was an instant success. People actually lined up to use the machine, which processed about $1 million in digital currency transactions over its first month.

But one day in November, a few weeks after launching the ATM, Demeter noticed something peculiar as he perused the machine’s transaction data at his office, across town from the coffee shop. At one point, the machine had voided 15 transactions in a row, for no obvious reason. So he drove down to the cafe, and as he walked through the front door, he immediately saw the problem.

A man was sitting next to the machine, at one of the cafe’s wooden tables, and he was holding a sign that read: “Don’t Pay Transaction Fees.” This very human entrepreneur, you see, was undercutting the world’s first bitcoin ATM. As people walked in to use the machine — which was charging a 7 percent transaction fee — he offered to exchange their money, by hand, at a lower rate.

http://www.wired.com/wiredenterprise/2014/01/bitcoin_atm/

That's quite a cool idea. Set up your localbitcoins operation right next to a bitcoin ATM machine. Cool until the ATM operator hits you over the head with something

[thehedgemon]

The Bitcoin ATM Has a Dirty Secret: It Needs a Chaperone

When Mitchell Demeter and Jackson Warren opened the world’s first bitcoin ATM at a coffee shop in Vancouver, it was an instant success. People actually lined up to use the machine, which processed about $1 million in digital currency transactions over its first month.

But one day in November, a few weeks after launching the ATM, Demeter noticed something peculiar as he perused the machine’s transaction data at his office, across town from the coffee shop. At one point, the machine had voided 15 transactions in a row, for no obvious reason. So he drove down to the cafe, and as he walked through the front door, he immediately saw the problem.

A man was sitting next to the machine, at one of the cafe’s wooden tables, and he was holding a sign that read: “Don’t Pay Transaction Fees.” This very human entrepreneur, you see, was undercutting the world’s first bitcoin ATM. As people walked in to use the machine — which was charging a 7 percent transaction fee — he offered to exchange their money, by hand, at a lower rate.

http://www.wired.com/wiredenterprise/2014/01/bitcoin_atm/

That man is a vulture! What lack of imagination

[Sonny]

A man was sitting next to the machine, at one of the cafe’s wooden tables, and he was holding a sign that read: “Don’t Pay Transaction Fees.” This very human entrepreneur, you see, was undercutting the world’s first bitcoin ATM. As people walked in to use the machine — which was charging a 7 percent transaction fee — he offered to exchange their money, by hand, at a lower rate.

http://www.wired.com/wiredenterprise/2014/01/bitcoin_atm/

lol.
real genius 

[calian]

As with most articles they got a bunch of small details wrong.

I am an owner of Bitcoiniacs, and this article is sensationalizing a minor incident. We didn't hire an ATM attendant to protect the ATM from poachers, we hired them to help people learn how to use the ATM and about Bitcoin. Also, the fee wasn't 7% at the time, it was 5%, and this "poacher" wasn't advertising lower fees, he was saying that if you wanted to buy more than $3000 (the limit of the ATM) to talk to him.

Let's put it this way: it costs so much to manage the ATM that it's a miracle we're still in business.

[empoweoqwj]

The Bitcoin ATM Has a Dirty Secret: It Needs a Chaperone

When Mitchell Demeter and Jackson Warren opened the world’s first bitcoin ATM at a coffee shop in Vancouver, it was an instant success. People actually lined up to use the machine, which processed about $1 million in digital currency transactions over its first month.

But one day in November, a few weeks after launching the ATM, Demeter noticed something peculiar as he perused the machine’s transaction data at his office, across town from the coffee shop. At one point, the machine had voided 15 transactions in a row, for no obvious reason. So he drove down to the cafe, and as he walked through the front door, he immediately saw the problem.

A man was sitting next to the machine, at one of the cafe’s wooden tables, and he was holding a sign that read: “Don’t Pay Transaction Fees.” This very human entrepreneur, you see, was undercutting the world’s first bitcoin ATM. As people walked in to use the machine — which was charging a 7 percent transaction fee — he offered to exchange their money, by hand, at a lower rate.

http://www.wired.com/wiredenterprise/2014/01/bitcoin_atm/

That man is a vulture! What lack of imagination

No, just plain business sense. Put a stall up next to your rival but charge (much) less. Business 101.

[empoweoqwj]

As with most articles they got a bunch of small details wrong.

I am an owner of Bitcoiniacs, and this article is sensationalizing a minor incident. We didn't hire an ATM attendant to protect the ATM from poachers, we hired them to help people learn how to use the ATM and about Bitcoin. Also, the fee wasn't 7% at the time, it was 5%, and this "poacher" wasn't advertising lower fees, he was saying that if you wanted to buy more than $3000 (the limit of the ATM) to talk to him.

Let's put it this way: it costs so much to manage the ATM that it's a miracle we're still in business.

Ah that's journalism for you these days.

However, the cat is out of the bag now. Its actually a great idea. Go and set up shop next a bitcoin ATM machine and undercut the fees. Simple but effective, especially if the fees are high. To my mind, 5% is very high, there will always be someone prepared to do it for much less than that.