
New website lets you trade Starbucks gift cards for Bitcoin - mhluongo
http://www.digitaltrends.com/cool-tech/card-for-coin-trade-starbucks-gift-cards-bitcoin/
======
eric_bullington
I actually built a very comprehensive site that did this exact thing back in
2011, even hiring a very good designer to help me with the graphics (paid with
Bitcoins -- about 60 BTC for his work if I recall). The mobile web frontend
for the Bitcoins->Card side worked well enough that I would load it up and use
it to buy coffee at my local Starbucks via the PDF417-code that Starbucks
uses.

However, I never released due to all the regulatory issues. Very
unfortunately, FinCEN still considers this type of transaction to be an
exchange of value, and thereby regulated. At the time, FinCEN still hadn't
released their guidelines on digital currencies, but they were increasing
their regulatory stance on gift cards. The situation is still not completely
clear, even now, but I'm pretty sure that FinCEN will try to claim that this
type of operation a money transmitter, with all the headaches that this
brings.

Also, I wasn't sure if Starbucks would try to do something crazy like sue me
to take down the site. But it was primarily my fear of FinCEN that caused me
to drop the idea and put the code in storage. Regulation is taking a heavy
toll on this country's innovation; this is just one very small example.

Interestingly, I had no problems getting a business bank account for the idea
back then. I think it'd be much harder now.

Despite spending 6 weeks part-time on a project that I ended up scraping, I
don't regret it since it was my first major Python project and eventually led
me to learn lots of implementation details of the Bitcoin protocol itself
(though that certainly wasn't necessary for my project).

Edit: clarity

~~~
panarky
It's a shame FinCEN regs are so onerous, they're really stifling startups and
ensuring that innovation will happen outside the US.

It's pretty vague, but it's easy to interpret the latest guidance to say that
exchanging one digital currency for another requires a license, customer
identification, suspicious transaction reporting, etc. Even if you never touch
dollars, euros, yen or any other "real" currency, are you still a "money
transmitter", no matter how small the amount?

[http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G...](http://www.fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html)

"If the choice for regulators is to permit money laundering on the one hand,
or to permit innovation on the other, we are always going to choose squelching
the money laundering first."

[http://www.bloomberg.com/news/2014-01-29/new-york-state-
regu...](http://www.bloomberg.com/news/2014-01-29/new-york-state-regulator-
promises-tough-bitcoin-rules.html)

Good luck exchanging stored-value for digital currency in this environment.

~~~
eric_bullington
A business that buys/sells gift cards for Bitcoin is a bit of a grey area I
think, but I'm absolutely _sure_ that FinCEN considers exchanging Bitcoin for
alts to be money transmission, regardless of the amount involved, and once
they catch up with the technology, they'll start looking to make a precedent.

And yes, these businesses will simply take place outside of the U.S., taking
all those jobs with them.

~~~
asveikau
I have not looked into these details being discussed at all, but the "sending
jobs elsewhere" angle sounds nutty. I have to assume that money transfers are
also regulated in the places you're thinking of, especially if it is a
developed country or a desirable place to live. I mean, you can't reasonably
expect to just set yourself up as a bank without jumping through a few hoops.

~~~
eric_bullington
You realize that some of the largest Bitcoin businesses, such as the now
defunct Trade Hill, and the still operating moneero, have moved overseas to
more open Latin American economies, right? Uraguay and Costa Rica seem like
pretty nice places to live.

These businesses employ/have employed dozens of people, and that could easily
grow to hundreds.

Also, by shutting out any chance of an complying American exchange, we de
facto sent jobs to Bitstamp in Slovenia, which is growing in to a very nice-
sized business, I hear.

------
Clickclock
My mom was one of the few unfortunate buyers from target that had her card
number stolen. The thief has purchased $500 worth of Starbucks gift cards in
the last two weeks.

I don't think it is a coincidence that the thief purchasing these cards. I'm
not speaking for the creators, they could easily be caught in the crossfire.
That being said, this is very obviously an exploitable method of transaction
specifically for a thief. No matter the intention of the project.
[https://news.ycombinator.com/item?id=6175294](https://news.ycombinator.com/item?id=6175294)

------
domdip
Considering buying Starbucks gift cards with stolen credit cards is already an
activity of scammers, this seems a bit dangerous. Let alone the FinCEN issues.

------
minimax
It looks like Starbucks gift cards sell for a roughly 20% discount on eBay†.
The discount seems to be proportionally higher for higher value cards (who
really wants a $400 Starbucks card?). So I guess you get a better deal
_buying_ cards on Card for Coin at a 30-40% discount to face value but you get
a better deal _selling_ them on eBay...

† [http://www.ebay.com/sch/Gift-
Cards-/172009/i.html?_from=R40&...](http://www.ebay.com/sch/Gift-
Cards-/172009/i.html?_from=R40&_nkw=starbucks+gift+card&LH_Complete=1&LH_Sold=1&rt=nc)

~~~
bluedino
> who really wants a $400 Starbucks card?

Why wouldn't you? At $4/visit you should be good for 4 months if you go nearly
every day.

~~~
minimax
Something something time value of money something. I'm not really sure. I was
just pointing out a feature of the sale prices. I was only eyeballing at
that...

------
snitko
This is a nice workaround. I've been long thinking about what could be used
instead of dollars to trade for Bitcoin. Of course, starbucks cards are not as
widespread and their amount is probably limited (in a sense that there's not
enough of them to satisfy demand in the case this seriously takes off), but
it's nevertheless great to see people finding ways to bypass the stupid
regulatory system, because of which there are no real Bitcoin exchanges in the
US.

~~~
al2o3cr
"it's nevertheless great to see people finding ways to bypass the stupid
regulatory system"

Keep saying that when your "Freedumb Über Alles" exchange takes your USD,
gives you 0 BTC, and tells you "tough shit, sucker".

~~~
snitko
But that's my choice. See, that's the problem with advocates of any
regulation. Regulating != informing. If all government did was saying "This
business is not reliable" I'd be perfectly fine with it. But then they
actually prevent businesses from operating without licences. This creates a
lot of opportunities for corruption. On what grounds do governments think they
have the right to tell every person what to do with their money?

~~~
gnaritas
> On what grounds do governments think they have the right to tell every
> person what to do with their money?

On the grounds that it's the law; those are pretty good grounds.

~~~
snitko
Slavery was also legal not so long ago. Being gay was illegal not so long time
ago. Alcohol was illegal at some point. Weed is still illegal in most places
these days.

Something being a law doesn't make that something justified or moral. It just
allows certain groups of people to benefit from it while lying to others that
it's for their own good.

~~~
gnaritas
> Something being a law doesn't make that something justified or moral.

Strawman, I never said it did. Grounds != moral.

------
herbig
Very clever. I just forked over a $10 card for $6 in bitcoins. I've been
reading about bitcoin since its inception and finally have my own slice of the
pie...

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EddieB
Whats stopping people selling their gift cards and using them before the
buyers? Or am I missing something?

------
eplumlee
Starbucks gift cards strike me as an odd choice. I can't help but think this
choice was made to assist in a certain type of scam:
[https://news.ycombinator.com/item?id=6175294](https://news.ycombinator.com/item?id=6175294)

~~~
mhluongo
Nah, the Starbucks choice is explained in the article. It's a remnant from the
original project to help indie coffee shops accept Starbucks cards.

EDIT - I just read the article you referenced. That scam only applies to
registered cards (cards attached to a Starbucks account). I don't accept
registered cards, or have anything to do with that.

------
bendoernberg
This service goes in the opposite direction, but if you're looking to cash out
dogecoins into Starbucks, Visa or Amazon giftcards, check out
[https://treats.io/](https://treats.io/).

------
cartothemax
tried out the site (had a card with 10 bucks) and tried creating a bitcoin
wallet. no luck having the bitcoins show up in my wallet yet. I have a feeling
I did something wrong...

~~~
eric_bullington
What wallet are you using? If you're using a full wallet (Bitcoin-qt), then it
could take up to 12+ hours to download the full blockchain and your
transactions show.

As a beginner, you'd be better off with a wallet like Electrum or Multibit
that will show your transactions almost immediately.

You can also view them here on blockchain.info, by putting your _public key_
(the one that starts with a 1) into the search bar. Your transactions should
show up, assuming nothing is going wrong with this site:

blockchain.info

Otherwise, just contact the owner, I'm guessing he'll be eager to help.

1\. [https://electrum.org/download.html](https://electrum.org/download.html)
2\. [https://multibit.org/](https://multibit.org/)

~~~
cartothemax
I was just using an online based wallet through blockchain.info.

Tried doing a search for my public key 18fyCm3vkftJ9nNgZ4SwoJkCuGVZQ2kZcE and
had no luck finding the transaction.

When I get home tonight I need to check out these other wallets and get in
touch with the owner. If I'm only out 10 bucks though on a gift card that I
got for xmas. No sweat off my back.

*Oh, and thanks for the help!

~~~
eric_bullington
No problem. Just in case you don't get those BTC, I just sent you some to that
address to play around with or buy a little something with. But hopefully,
you'll end up receiving both transactions.

Check out electrum or multibit, they're both fairly easy to use. Be sure the
password-protect your wallet with a long password (write it down somewhere!).
If you do continue to use blockchain.info be sure to enable 2-factor
authentication and use a strong password.

~~~
cartothemax
I did get the BTC. Thank you so much for you generosity. I have downloaded the
Bitcoin-Qt and is downloading the block chain now.

I'm going to check out electrum and multibit next. Thanks!

~~~
eric_bullington
Great! Glad they both came through.

I need to make one correction to what I wrote above. In my haste, I
accidentally called your Bitcoin address your "public key". Actually, your
public key is a related but different concept. Properly said, the string that
starts with "1" is just a Bitcoin address.

Anyway, just wanted to correct myself that those are two different but related
concepts. This has no impact on your use of Bitcoins -- just use the one that
starts with "1" to give out to receive Bitcoins. Most programs won't even show
you the public key I'm talking about, so no need to worry about it.

------
sktrdie
How do they make money? They buy lots of coffee for themselves?

~~~
2drew3
They can sell the SBUX gift cards on a gift card exchange (Cardpool) or eBay
for ~25% discount and make the spread.

------
mrfusion
Would Amazon giftcards work?

~~~
lispsil
They would but easy to fraud, because you could use stolen cards to buy them
online. Then the guy who trades you for Bitcoins screwed when amazon cancells
all the cards. If you can also buy starbucks cards online with visa/mc too
then this whole venture is doomed as well.

~~~
mhluongo
Yeah I'd like to try Amazon but the more liquid cards seem to be more
fraudulent.

~~~
lispsil
Create vouchers in 711 you can instantly redeem for bit/altcoins. Bitinstant
did this but was badly implemented. Unsure if msb required. Some millionaire
prince could make it happen. Probably issues with it being able to use for
online gambling too considering paysafecard is forced to sell a crippled
version in the US

