
My Experience using a Bitcoin ATM - frist45
http://grantammons.me/bitcoin/my-experience-using-a-bitcoin-atm/?utm_source=hn&utm_medium=web&utm_campaign=hn
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pilif
_> I’m normally very cautious about ID theft, so submitting all this
information made me very uncomfortable._

no. you're not. If you were, you would absolutely not have gone through this
crazy procedure.

 _> But I couldn’t help but think that they were shifting the exchange rate to
their favor (which happened to be the case for my transaction)_

Of course they are - that's how they pay for actually providing you with a
service. Running that ATM, filling it with actual bank notes, (sometimes
manually) approving new accounts, all of this costs money which they make by
"shifting the exchange rate to their favor"

~~~
avalaunch
He said he was normally very cautious, which is basically an admission that he
wasn't being cautious this time. The fact that he chose to throw caution to
the wind once doesn't mean he isn't normally cautious. Curiosity got the best
of him.

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jnbiche
For the whole fingerprint, photo, ID, social security, etc. dance, let's place
the blame squarely on the proper shoulders here: the U.S. government. No sane
business would demand these things voluntarily. Some would probably even avoid
collecting them if the only penalty were civil (i.e., fines).

But anyone who fails to collect all this information while engaging in money
transmission, as is the case with a Bitcoin ATM, puts themself at risk of SWAT
raids and long prison sentences.

I'm also seeing that some of the same people who were mocking Bitcoin
businesses before for their failure to comply with regulations _now_ are
mocking Bitcoin businesses because complying with these regulations takes a
really long time and is onerous. In this regard, I really have no comment
beyond just pointing it out.

~~~
gnoway
I agree with most of your comment, but I'd like to point out that I have never
in my life had to give up my fingerprints to a bank for anything. I am
comfortable asserting that it is uncommon anywhere in the US to require
fingerprints to have a bank account and use an ATM.

Is this required for foreign currency exchange? Because that's all I think
this machine is really doing.

~~~
bduerst
I am curious too as to how this is the U.S. Government's fault.

To be a money transmitter, it requires that you have a license, and it sounds
like Robocoin is trying to mitigate their risk (e.g. losing their license and
going out of business) by being able to prove who you are, in case they become
party to illegal activity.

~~~
jnbiche
The strict KYC/AML laws are all federal laws (many stemming from the PATRIOT
act).

State money transmission laws have traditionally been oriented toward consumer
protection and not toward prosecuting money laundering (and so they
traditionally didn't require any IDs or other proof of identification from
anyone except the business owners).

~~~
bduerst
But how does that apply here? You specifically said:

> For the whole fingerprint, photo, ID, social security, etc. dance, let's
> place the blame squarely on the proper shoulders here: the U.S. government.

I don't have to take a photo, give social security, or scan a hand print when
I exchange foreign currency with a money transmitter...

~~~
jnbiche
>I don't have to take a photo, give social security, or scan a hand print when
I exchange foreign currency with a money transmitter...

1\. FinCEN has declared that a Bitcoin exchange (such as this ATM) is not
subject to the same laws as foreign exchanges, but rather is a money
transmitter, and thus subject to much stricter regulation (such as
identification required starting at $0 instead of $1000).

2\. When was the last time you exchanged foreign money in the U.S.? When I
last exchanged foreign currency in the U.S. (in the past few years), I needed
to provide a photo ID and my social security no. I believe this is strictly
required only when you exchange over $1000, but many exchanges require them
for all transactions.

3\. Note that when you provide a photo ID, the end result is the same as if
they had taken a photograph on the spot (your photo is copied and filed).

~~~
bduerst
That makes more sense. Thanks.

It has been two years since I was last at a foreign currency exchange here,
and things could have changed since then as well.

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asciimo
The conventional ATM experience only works because we have already gone
through the pain of identifying ourselves to a bank, usually by sitting across
the desk from another human being and filling out forms, during business
hours. We often have to wait for an ATM card to arrive in the mail afterward.
I think it's incredible that I can now go to a bar at 1AM for the same
service. Plus beer and pool.

~~~
GoldenMonkey
Really? I can go to walmart and buy a pre-paid atm card with cash. And then
use that card at an atm. No Id process required.

~~~
SippinLean
It's still harder to drive to Walmart during business hours than use a
Robocoin.

~~~
ceejayoz
In many areas a round trip to Walmart will take a lot less than the 50 minutes
described in the article.

~~~
joshstrange
Let's remember that this was the first time he used the ATM, it would appear
that future interaction would only take the time to send the BTC to the
robocoin wallet and wait for the confirmation (~10 min for the required 1
confirmation). 10 minutes is pretty quick IMO to convert BTC to cash, the only
faster method would be using Local Bitcoins (which are the people running the
ATM in this post) but that assumes you could organize, agree on a price, and
meet up with another person in less than 10 minutes which I know from
experience is pipe dream.

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deltaqueue
I had a similarly poor experience[1]. Many people are retorting that you have
to go through this process with all financial institutions. To those, I say
you're missing the point. We still have to answer a lot of questions regarding
regulation around cryptocurrencies, but part of the allure is that you
shouldn't have to jump through a bunch of hoops to use bitcoin. Furthermore,
the first (and only) time I dropped by the bitcoin markup was astronomical.

It's naive to think we'll resolve this overnight, but until then there's no
point to using a robocoin ATM.

[1] [http://www.jauntworthy.com/blog/2014/2/21/first-
impression-o...](http://www.jauntworthy.com/blog/2014/2/21/first-impression-
of-robocoins-bitcoin-atm)

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mschuster91
The main problem is the PII like palm prints, driver ID etc. and no ATM
operator right in his mind can leave that step out if the ATM handles dollars
in any amount.

Fuck banks, fuck their anti-money-laundering regulations and fuck the
politicians for the "war on drugs" which actually led to the creation of said
anti-money-laundering rules.

~~~
jnbiche
I agree with you that all the privacy invading things here are a big problem,
but why do you blame banks for AML/KYC? I mean, there's plenty of other things
to blame banks for, but the ID, photo, etc. requirements are due solely to the
policies of our government.

Banks have traditionally _resisted_ those rules, because they know people
don't like them.

~~~
mschuster91
They enforce KYC/AML measures only for the small fishes, but openly deal with
drug dealers and other questionable entities.

Either you go the full route and demand compliance from _everyone_ , or you go
the full-opposition route and do everything in your power to _really_ fight
the regulation.

The "hybrid" approach chosen by many banks is just criminal.

~~~
jnbiche
Fair objection.

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woah
The "rawness" he describes has nothing to do with Bitcoin, and everything to
do with the laws surrounding fiat money.

~~~
billyhoffman
It seems to me the "rawness" has everything to do with bitcoin and its
decentralized design.

1- Needed to create an account for "their" exchange. 2- Needed to transfer
bitcoin into their exchange. 3- Needed to wait for transaction to get
validated in the blockchain 4- Get money.

You could reach and say that all the PII and initial setup was to comply with
laws about banking/money laundering. But that took 7 mins of a 45 min process.

~~~
jes5199
> 3- Needed to wait for transaction to get validated in the blockchain

This process is _slow_ and I don't see how it can possibly get faster.

The best I've come up with is you have a second money-apparatus that moves
more quickly. It probably wouldn't have a lot of the currency-like properties
of bitcoin. I guess the analogy is that sending bitcoin is like writing a
cheque, and this faster thing would be like using a credit card.

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schmichael
The long wait times and multiple trips may explain why there are such long
lines in so many pictures of Bitcoin ATMs.

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mcherm
I had a terrible experience last weekend.

I went down to the corner to get some money out of the ATM. I walked up and
stuck in my card and the ATM wouldn't give me any money: said something about
my card not being supported. So I walked into the bank building adjacent to
the ATM and asked them about it.

Well, first I had to wait in a line: there were two people in front of me so
that took about 5 minutes. Then they explained that the ATM didn't work
because I didn't have an account with that bank, and would I like to open an
account? I said sure, go ahead, then they started asking me all kinds of
intrusive questions.

They wanted to see my driver's license and they even wanted to know my social
security number! I asked them why they needed this information and they
muttered something about the "US Patriot Act"[1]. Anyway, it took another few
minutes for them to collect all this, then they said they needed a few moments
to run it past some lists. (Apparently the US government keeps some lists of
terrorists and whatnot -- I told them I wasn't on any of the lists but they
insisted on checking anyway.)

After a few more minutes they came back and said I was fine. They transferred
money from my existing bank and handed me a new ATM card. I tried it and
everything worked smoothly this time.

I don't think anyone should use this bank. The process took me half-an-hour or
more and it was really awkward.

[1] -
[http://www.fincen.gov/statutes_regs/patriot/](http://www.fincen.gov/statutes_regs/patriot/)

~~~
derekp7
I've never seen a case where an card wouldn't work in another bank's automated
ATM machine. I know this used to be the case, but there are a bunch of logos
on the back of my card, and a bunch of logos on various ATMs, and as long as
there is an intersection of at least on of those logos it should work.

And there is a big difference between giving basic proof of ID information to
a regulated financial institution, vs. handing it over to an unknown entity.

~~~
nezza-_-
Just FYI: ATM stands for Automated Teller Machine, so your sentence expands to
"automated automated teller machine machine" :)

~~~
derekp7
I know -- that's why I threw automated at the beginning (inside joke). But
adding "machine" at the end seems to happen a lot (and feels natural) when an
acronym transitions to a stand-alone name. I wonder if there is a name for
this phenomenon?

~~~
tectec
It is called RAS syndrome.
[http://en.wikipedia.org/wiki/RAS_syndrome](http://en.wikipedia.org/wiki/RAS_syndrome)

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robgering
Banks want to quantify their risk as exactly as possible for their asset
models. These regulations generally reduce the overall banking system's risk
at the cost of compliance. Generally the cost of compliance is far lower than
the cost of the hedges against risk.

I'm not convinced that Bitcoin ATMs will be able to get past these
restrictions in countries with hyper-complex financial regulatory structures.
However, if digital currency succeeds, paper money is sort of a backwards
compatibility feature, since the majority will be using their phone (or future
unknown digital device) to transfer money independent of a centralized banking
network.

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dobbsbob
Pretty sure it just scans a palm ID and not fingerprints but I never use these
things to sell anyways, only to buy which takes less than a minute after
filling it with cash. I always use local bitcoins for in person no ID cash
exchange just because I shouldn't have to fill out a passport application to
sell a few coins.

~~~
bradleysmith
I've heard from someone close to the project that it's an IR image of palm
vein structure, which is a reliable biometric ID. a quick google search
confirmed[0]: “We actually do palm vein scanning, which we think is far more
secure, private and accurate than fingerprint. The palm vein scan is actually
an infrared image of the customer’s palm vein patter—the second most unique
form of biometric authentication. This biometric data is stored by our
partner, Fujitsu,” [Jordan] Kelley said.

I agree, I know several btc enthusiasts in Austin that won't use the thing b/c
biometrics.

may not be original source [0]-[http://computer-medics.biz/robocoin-rolling-
out-first-bitcoi...](http://computer-medics.biz/robocoin-rolling-out-first-
bitcoin-atm-in-the-us/)

