Saturday, 20 January 2018
Bitcoin

I tried to buy $1 of bitcoin from a Las Vegas ATM — and it just proves how far bitcoin is from replacing regular money



the d las vegas bitcoin
The
D in Las Vegas is one of the very few places in the city to
accept bitcoin.

Matt
Weinberger/Business Insider


  • Some Las Vegas restaurants accept payment in bitcoin,
    so I decided to try to buy bitcoin from a casino’s bitcoin
    ATM.
  • I lost all my money.
  • Considering the exorbitant bitcoin ATM fee, I have real
    doubts as to whether or not bitcoin has a real future as a
    currency.

 

LAS VEGAS – I’ve been in Las Vegas for a whole week, but I’ve
only gambled twice: when I played $1 on The Simpsons slot machine
in my hotel, and when I tried to buy $1 (and then, another $10)
of bitcoin from a casino ATM.

Both times, I lost it all. 

I had heard that the D, a casino and hotel in downtown Las Vegas,
had a bitcoin ATM that made it easy to buy and sell the red-hot
digital currency. I was
intrigued by my colleague’s account of a bitcoin ATM
in New
York City, which he used to buy $5 of bitcoin back in September.
So I figured, hey, Las Vegas is about taking chances, and so is
bitcoin.

I’m no cryptocurrency expert — once, many years ago, someone sent
me a super-tiny sliver of bitcoin that vanished when the app he
used to send it shut down, and I haven’t touched it since. So to
get started, I went in intending to invest a single, solitary
dollar.

To use the ATM, I first had to download a bitcoin-wallet app,
which you use to store your digital currency. I settled on
Coinbase, from the $1.6 billion startup of the same name. I
verified my account, easy-peasy, got my unique QR code to receive
funds, and I was ready to go. 


bitcoin atm
The bitcoin ATM in question.
Matt Weinberger

The ATM experience itself started out smoothly. Before I even
started, it told me it was valuing bitcoin at a hair over $15,000
per coin, meaning my $1 would buy the barest, tiny sliver of a
single coin. That was fine, I knew what I was in for. The ATM
verified my identity with a text message sent to my phone, and
everything went smoothly. 

Then, I put in my dollar bill. It told me it wasn’t enough to
receive any bitcoin, whatever that meant. So I put in the only
other bill I had on me, which was a $10. Still not enough! I
guessed there was some kind of minimum that I just wasn’t
hitting, but the machine wasn’t really communicating it to me.

So I cancelled the transaction. It warned me that in doing so, I
would “forfeit” my bitcoin, and not get any in return.
Whatever. 

But then, my $11 never came back out. At all. I even asked for a
receipt, which didn’t print. It’s gone, forever.

I reached out to Coin Cloud, the company that made the ATM, to
see if this was working as intended. Here was their response:

“The machine cannot refund the case. However, we can manually
send you the bitcoin at the appropriate rate. The reason why your
transaction did not go through was due to the miners fee. Miners
fees are at $40-$45 per transaction. I am estimating that the
amount that you will receive will be $1-2 in btc. Please provide
me with the phone number you used at the machine and a wallet
address where you can receive btc too.”

The money cleared, and according to Coinbase, I’m getting $1.65
back on my $11 investment. Well, it’s better than nothing, and at
least customer service got back to me.

A coworker later explained to me about that exorbitant
transaction fee, which is due to the fact that the bitcoin
network is so crowded and congested. According to Coin Cloud, I
would have had to put in $40 to $45 — plus at least one cent — to
get even a little bitcoin out of the machine. If that’s the case,
I don’t really see why anyone would pay in bitcoin for anything.

It’s also important to remember this isn’t an ATM in the
traditional sense — it’s more like a currency exchange. And at a
currency exchange, they make their money on the conversion by
taking a margin of the transaction, which usually also covers any
fees. This ATM doesn’t tell you about any of its fees or anything
until you’re already committed to the transaction, and takes your
money if you cancel it. Besides, when was the last time you paid
a $40-plus ATM fee?

The funny part is that the restaurants at the D accept bitcoin in
payment. Presumably, that means if you bought a $10 meal from the
casino’s American Coney Island fast-food restaurant in bitcoin,
you’d have to pay another $40 to $45 in fees on top of it. 

So between that annoying, unexpected, and exorbitant fee, and the
fact the machine didn’t convey any of this information, I have to
say that my first attempt at seriously using bitcoin gave me some
real doubts as to whether or not the currency has a real future
at all.

In the meanwhile, I’ve decided not to sell my bitcoin until my
$1.65 of bitcoin is worth more than the $11 I originally tried to
put in. That means that bitcoin is going to have to go up 10
times in value before I sell. Get to it, bitcoin world.



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