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Home :: Money

10 Nov 2013

The Bitcoin vending machine Money

I was at IETF 88 last week in Vancouver. Probably not by coincidence, a coffee shop a few blocks away had just installed a Bitcoin vending machine, and since I've said lots of rude things about Bitcoins (which are still pet rocks only without the rocks) I figured I should go try it out.

Press reports called it a Bitcoin ATM, but it's really a vending machine: you put in money and it sells you Bitcoins, or (in theory at least) vice versa. The machine has a largish touch screen on the left, with slots below that accept and dispense cash. On the right is a QR code reader, a palm reader, a device I didn't use, and at the bottom a ticket printer.

Before you can use the machine, you have to set up an account identified by your palm print, apparently because the government limits transactions to $3000 per user per day. You put your hand into the palm reader 5 or 6 times until it has an adequate set of images. Then it asks for an optional e-mail addreess and tells you to come back later while it sets up an account and, presumably checks your palm print to be sure you're not a known bad guy. About five minute later I got the e-mail telling me I was approved.

To buy bitcoins, you authenticate with a palm print, then tell it how much you want to buy. I bought the minumum $20. It asked if I had a Bitcoin wallet, and since I didn't, it made one and printed out a ticket with a QR code for the wallet. Then I fed in a $20 bill, and it sold me 0.08042383 Bitcoins which it transferred to the wallet on the ticket. If I'd had a wallet already, I could have scanned a QR code from a wallet app or typed in the wallet's serial number, and it would have transferred them to that wallet.

The vending machine is fairly expensive to use, since it charges a commission, plus whatever the machine's owner pays to the exchange from which it buys the Bitcoins. The Bitcoins I got for my $20 turned out to be worth about $18. Other IETF-ers reported seeing people feeding in thousands of dollars in cash to the machine, which suggests either they didn't realize that the rate was lousy, or they had some reason to prefer an exchange process that was largely anonymous. (Perhaps they were growers of one of B.C.'s better known agricultural products.)

A Bitcoin wallet on a piece of paper, although fairly secure, doesn't enable any transactions, like buying a cup of coffee, so on that trip I used my Mastercard instead, a payment process which took about 5 seconds to stick the card into the reader and enter my PIN.

I did come back later and buy coffee with Bitcoins, but that's the next installment.


  posted at: 23:04 :: permanent link to this entry :: 1 comments
Stable link is https://jl.ly/Money/bitvend.html

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