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World's First Bitcoin ATM
bill_mcgonigle writes "I just bought bitcoins from the World's first Bitcoin ATM at Liberty Forum. I created an account using an Android Bitcoin client and held up its QR code to the Raspberry Pi-based device's optical scanner. After I fed in a $20 Federal Reserve Note, I got back a confirmation QR code on its display, which I then scanned and checked the third-party confirmation URL. The machine can function on any wireless network and will soon be available for purchase by merchants, who can make a commission on customers' Bitcoin purchases."
Actually the bitcoin is worth more because it's very difficult to expand the bitcoin supply while expanding the currency supply is trivial.
Congratulations.
#DeleteChrome
Speaking of ignorance... the only reason ANY currency is worth ANYTHING is that people are willing to exchange it for something else.
Perhaps you could start by learning to spell "financial"?
A lot of people use US dollars without concern. Ignorance is bliss
It will be a far more useful offering when I can both give it currency to be credited bitcoins, and transfer bitcoins to it to receive currency.
You put primarily in the wrong place.
The currency primarily used by terrorists, druggies, and child pornographers is the US Dollar.
You may have intended to say the currency used primarily by those groups.
I love Jesus, except for his foreign policy.
"Meta post!"? Doesn't haven't the same ring, sorry.
I disagree. Ever try to give a stripper or hooker bitcoins? Bad idea...trust me.
It is actually quite hard to obtain bitcoins anonymously.
The days of CPU-based mining are long over, and even the current "economy" of multi-GPU-based mining rigs is about to be eclipsed by the ASIC-based devices coming online this year.
There are effectively no services that will take anonymous payment for bitcoins. Paying via bank account ACH or check is certainly not anonymous, and the same goes for credit/debit card payment. Furthermore, any credit/debit based payment is potentially reversible via chargebacks, etc, so most places don't take that kind of payment due to the fact that bitcoin transfers are irreversible.
Services like Bitinstant claim to take cash for bitcoins, but what that really means is that they require payment via MoneyGram, which requires you to present government-issued ID when sending payment. This is linked to the Bitinstant anti-money laundering policy, which requires your real name, etc. Dwolla wants a name, SSN, government ID, etc, to setup an account. As for Mt. Gox? Heh, they require everything but a DNA sample in order to use the exchange. Any service registered as a "money services business" in FinCEN will have these kinds of restrictions.
Obtaining bitcoins locally requires finding someone offering them for sale, negotiating price each time, and likely a face-to-face meeting to hand over cash. If one is really patient and trusting, a deal might be able to be struck for sending cash in an envelope. However, the bitcoin market is extremely volatile, which tends to undermine these types of deals.
Anyway, this ATM seems very convenient and anonymous; ergo, it likely will fall afoul of the anti-money laundering laws in one way or another.
Actually I recently read a paper from Tim Morgan, a researcher at Tullett Prebon, that claims that the economy is basically just a dynamic balance between produced energy and consumed energy, and currency is just an intermediary state that loses meaning if there's no energy to buy with it (every product is as valuable as the energy used to craft it). This basically associated the economy to physics, and not to finance, and defines debt as a bet on future energy.
You can read the full paper here http://www.tullettprebon.com/strategyinsights/media_resources.aspx
Translation: you're super pissed that the dollar is holding its value regardless of the US debt.
Want a tissue?
p.s. You have no idea how currency works.
Are agnostics skeptical of unicorns too?
Yes, there's a lot of people who are in Bitcoin because of become-a-billionaire-overnight fantasies. But you remove all that and you're left with a really fascinating system that should appeal to everyone on Slashdot. It's a mix of cryptography, freedom of speech, computing, networking, finance, economics, and even politics -- most of us here dig that stuff.
Get over the hype and take Bitcoin for what it really is: a fascinating experiment that has, so far, withstood the amazing barrage of publicity, hacking attempts, legal uncertainties, and remains valuable for reasons completely contrary to everyone that says it's worthless. It may become worthless one day, but consider the possibility that Bitcoin is disproving all your wildly oversimplified assumptions about what makes something valuable. It is completely different, and there's plenty of reasons to believe that it could succeed as much as it could fail.
Why does gold have value? Nothing is backing gold. Yet it has value, mainly because of its properties: scarcity, fungibility, density, beauty, etc. Bitcoin is really quite similar but with some different properties. Ease of transfer over the internet, fungibility, scarcity, storage efficiency, near-anonymity and built-in escrow.
I don't think it's any more ludicrous for Bitcoin to have value than it is for gold to have value. And in the end, when I want to sell WoW weapons, buy webserver space, or play a few games of poker online, why would I use gold, credit card or paypal, which all require me to remember log-in creditials, give away information and/or pay a bunch of third party fees. There's plenty of value in being able to pay people across the world, instantaneously, without sacrificing your privacy, and without paying any fees. Why is that not valuable? Seriously... quit focusing on the get-rich-quick kids, and start appreciating Bitcoin for it's unique properties and philosophy.
Counterfeiting money is really hard, even with paper notes such as you use there. Southworth is well known though as *the* paper to print resumés on because the paper feels like money and people like it without even knowing why. Its success in getting jobs has even been measured in a psychological test as I recall.
This is quite common knowledge and can be found in 2 seconds by searching for "paper feels like money". You Sir, need to relax a little and appreciate the humour. No knowledge has been passed on that will result in any conterfeit notes being put into circulation that wouldn't have anyway. Put a bit RX into your TX.
I said - don't look Ethel!..., but it was too late..., she'd already looked.
But, BTC is more or less indistinguishable from a Ponzi scheme. The early adopters get massive amounts of BTC for basically nothing and later adopters are the ones that pump up the price. It may not technically be a Ponzi scheme, but that would only be by technicality. It's still early investors being paid by later investors and ultimately nothing is produced to justify anybody profiting.
I'm going to laugh my ass off when BTC ultimately does collapse. At some point it's going to hit a deflationary spiral when the last blocks are unlocked and no more BTC come into existence.
No, the value of any currency (exchange medium, fiat or otherwise) is derived from the trust that currency-exchanging users place in it. This trust may be derived from trust in the issuer (government), but that is no requirement. The value of BTC is derived from a combination of its limited supply and the usefulness of anonymous exchange. Governments need not be involved until you want to convert BTC to a tangible currency (such as US$), but that is not a required feature for those who deal only in BTC. So long as BTC is difficult to come by and those who value it are willing to exchange it solely based on perceived (or real-world) value, then BTC will thrive, and with increasing scarcity, rise in value.
--Udo.
This is a zero sum game. In order for you to win money, other people have to lose money. And because there's nothing being produced, you're guaranteed that the early adopters will wind up profiting even as the late comers end up footing the entire bill.
And hell yes you're a fool. Even fools get lucky, but in total, the people getting lucky will be vastly outnumbered by the people who get screwed because of the way in which the BTC are created. And the early fools will reap more rewards individually than the later fools will pay out individually.
Also, if you've bothered to read up at all, and I mean at all, on the Ponzi scheme, this is exactly what it looks like. The early adopters crow about how it's money for nothing, when they're being paid by the people getting in later. At some point the money runs low and it falls apart. We haven't yet hit the point where it falls apart, but when the deflationary spiral hits the system, those BTC that people have will be effectively worthless as there's no upside to buying them, assuming you even can buy them. And general instability as small purchases cause huge changes in value because of low trading volume.
It's also likely to be illegal as I doubt very much that the SEC is being permitted to oversee all of this, nor the equivalents in other nations.
Deflation is a silly thing to be worried about.
How many hyper-deflations have occurred? 0.
How many hyper-inflationary events have occurred? A lot. (Zimbabwe, Germany, Hungary, Former Soviet Republics, etc.)
The idea of this gigantic "deflationary spiral" is also a myth
http://mises.org/daily/1254
Does a good job of explaining it.
Taxation is legalized theft, no more, no less.
Well he's wrong. Since it's not just energy we depend on and it's not just energy we _want_.
every product is as valuable as the energy used to craft it
Tell that to stamp collectors. Tell that to art collectors. Tell that to the buyers of luxury goods.
There are lots of scarcities in this world that are not determined by energy unless you really stretch things to the point that they are useless in predicting or understanding stuff.
As for the US currency, it's not actually holding value - it is actually depreciating because of inflation. But that's not necessarily a problem for the USA (see below).
Why some economists recommendation of "printing money" to solve financial problems works at least for the USA is because the US dollar is used by the majority of countries in the world to buy and sell petroleum, wheat, CPUs, edible oils, milk, manufacturing equipment, toys, etc from each other.
Because of that when the USA prints money, the USA is actually transferring wealth from the rest of the world that holds positive amounts of US dollars (whether as assets, cash, goods or loans to others).
Basically when the USA prints money it taxes the rest of the world. If the US Gov gives enough of the printed money to the US citizens the US citizens will benefit overall. And hence the US financial problems are solved at the expense of the rest of the world.
In contrast if you are Zimbabwe you can do as much Quantitative Easing as you want and the rest of the world will just laugh at you. BUT IF the Zimbabwe government printed money and invested it into projects that benefit Zimbabwe with good ROI then yes printing money would have helped Zimbabwe. It would just be like another tax on the Zimbabwe residents but used productively. The big problem is getting good ROI or at least better ROI than not taxing the residents. And that's not always easy.
So it should now be obvious that it is much easier to make your country wealthier if you can tax the whole world rather than just the residents of your country. Then you don't even need projects with good ROI. Just take wealth from the rest of the world and hand it to yourself and your people.
And that should help explain why printing money works in some cases and not others.
I see lots of clueless US people (not just economists ;) ) talking about going to the gold standard, the USA not being able to pay back debts, stupid stuff like China owns the USA, etc.
The USA owes most of its debts in US dollars. Not gold. It can create as much US dollars as it needs! The Federal Reserve loaned out trillions from
"thin air" in 2008+. But note that strangely some of the trillions went into bailing out foreign banks! The US people should realize that it only works for them if enough of the printed money goes to them...
You should now see why going to the gold standard or the other alternatives would hurt the USA a lot.
There's nothing separating a bitcoin, a US dollar or a napkin that says $10000 1337 D0ll@rz on it. They all have next to no intrinsic value, although they all could be used as an exchange mechanism.
One being a legal tender[*] is a significant difference.
You can pay your rent and taxes in bitcoins no more than you can pay it in promises against next year's harvest.
You may be able to sell your bitcoins or next year's harvest, so you can get real money to pay your bills with, but that part is all on you.
[*] "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts."
-- 31 U.S.C., paragraph 5103
"Can it refund your cash if there is any fault?"
Yes, or rather the bank can (and must under the law). I've had an ATM eat a check. You just call the bank and have them deal with it.
"Can it run out of bit coins to pay out? and you end up losing cash?"
If an ATM runs out of cash, it refuses to process your transaction. No money is debited from your account. Likewise if its in hopper is full it will refuse to accept your deposit.
"How fast can it update the exchange rate?"
Instantly. The ATM itself doesn't store any of that, the bank does. It just communicates with the bank. So it is always current to the rate the bank offers you. Also, this is not an issue with normal ATM operations since you access the same currency your account is denominated in. This only applies internationally, and then the rates shift slowly. BTC shift multiple dollars in a day.
"What happens with a network lost midway though an transfer?"
The transaction doesn't happen. The ATM only does things if the bank says it is ok. So if it loses connectivity before it is complete, the transaction is stopped. You either don't get your money in the case of a withdrawal, or it hands you back your deposit in that case.
"Can it store and transfer at a later time?"
No, ATMs are dumb terminals, after a fashion. While they run all their interface locally, they don't have any account data. They just contact the bank and say "This account number wants to do this, is this ok?" The bank then says yes or no, the transaction happens, everything is updated on the bank's computers.
"What about an power loss?"
Same deal as anything else, you call the bank. They'll have to come and get your card out, also if you had a deposit in the hopper but not processed they'll have to get that out too.
"Hacking? and will be even be crime to hack it? and what will happen in a court if some one sues or they try to change some with breaking a law dealing with any to do with this?"
It is a crime to hack an ATM though it is nearly impossible, since again they are dumb terminals. The crypto between them and the bank is top notch (IBM makes these real cool crypto cards for them). In the event the ATM is attacked and the money stolen, it is an issue for the bank, not you. The risk to the end user is skimming, someone capturing your account information and then using it, same basic deal as credit card fraud and the like.
That the same questions apply doesn't mean the same answers do. Really, there has been a lot of time to think about and work on answers with ATMs. The big reason they work well is that they are just terminals for the bank. They don't store anything, other than the physical cash they dispense. They just transact back to the bank. Also, there's rather a lot of tracking that goes on with regards to bank transactions at many levels. If something happens, there's logging, there's a record, it can almost always be undone.
You can buy drugs relatively safely on the internet. It's a pretty popular use.
Time will tell...
http://en.wikipedia.org/wiki/Greater_fool_theory
What you've described applied to every business venture of earth, no matter what the legitimacy of the product or business model. Yes, early adopters of innovative ventures get the biggest shares in that ventures, which become the most valuable when the general public appreciates it.
The founders and early investors at Facebook, Google, Dell, Apple, Microsoft, etc etc etc all own the most of those respective and thus most of their capitalized values. Were they scams too? No, because at bottom, they all produced something useful.
You don't see the use in Bitcoin? Great, but that's a different argument than saying it's structured as a Ponzi scheme.
Information theory is life. The rest is just the KL divergence.
It seems bitcoins would be the easiest (and cheapest) way to transfer money to and from places without much financial infrastructure. That makes it a non-zero sum game. This also means that it might not (completely) collapse, as there is real utility in it.
Can people please stop saying this? It's getting old. No transfer of money or assets takes place between new and old investors. The early coins are simply easier to get. In fact, you could argue that the early investors are hurt by more people jumping on board. The low hanging fruit is gone, and a larger pool means the time required per coin grows faster with more people activly mining them. Of course, they realisitically benefit more in the long run by having a large active community around the currency. (I'm not denying that early investors had it much better, but that does NOT equal ponzi scheme.)
Also, it is designed to work down to any number of decimal places. The hard cap on the number of BTC that can exist is designed to prevent endless money printing, which is far more likely to cause deflation. Once the coin cap is reached, the value of one BTC in "real" currency GROWS, but the consumer uses less of their coin to purchase the same goods. E.g. evnetually with sufficent growth in user base it may cost 10 bit-cents for a big mac rather than $1, then that falls to 1 cent, then .1 then .01 and so on. (Obviously it doesn't have to go in factors of 10.) This is hardly deflation - but yes it's also good for the early adoptors.
I'm far from a BTC expert and have nothing to do with them. I have no idea whether or not the stated goals will work out, but willful ignorance repeated over and over is annoying. Hopefully calling it out will do more good than blowing a mod point.