My Experience using a Bitcoin ATM

<i>&gt;I’m normally very cautious about ID theft, so submitting all this information made me very uncomfortable.</i><p>no. you&#x27;re not. If you were, you would absolutely not have gone through this crazy procedure.<p><i>&gt;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)</i><p>Of course they are - that&#x27;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 &quot;shifting the exchange rate to their favor&quot;

For the whole fingerprint, photo, ID, social security, etc. dance, let&#x27;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).<p>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.<p>I&#x27;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.

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&#x27;s incredible that I can now go to a bar at 1AM for the same service. Plus beer and pool.

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&#x27;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&#x27;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.<p>It&#x27;s naive to think we&#x27;ll resolve this overnight, but until then there&#x27;s no point to using a robocoin ATM.<p>[1] <a href="http://www.jauntworthy.com/blog/2014/2/21/first-impression-of-robocoins-bitcoin-atm" rel="nofollow">http:&#x2F;&#x2F;www.jauntworthy.com&#x2F;blog&#x2F;2014&#x2F;2&#x2F;21&#x2F;first-impression-o...</a>

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.<p>Fuck banks, fuck their anti-money-laundering regulations and fuck the politicians for the &quot;war on drugs&quot; which actually led to the creation of said anti-money-laundering rules.

The &quot;rawness&quot; he describes has nothing to do with Bitcoin, and everything to do with the laws surrounding fiat money.

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

I had a terrible experience last weekend.<p>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&#x27;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.<p>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&#x27;t work because I didn&#x27;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.<p>They wanted to see my driver&#x27;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 &quot;US Patriot Act&quot;[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&#x27;t on any of the lists but they insisted on checking anyway.)<p>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.<p>I don&#x27;t think anyone should use this bank. The process took me half-an-hour or more and it was really awkward.<p>[1] - <a href="http://www.fincen.gov/statutes_regs/patriot/" rel="nofollow">http:&#x2F;&#x2F;www.fincen.gov&#x2F;statutes_regs&#x2F;patriot&#x2F;</a>

Banks want to quantify their risk as exactly as possible for their asset models. These regulations generally reduce the overall banking system&#x27;s risk at the cost of compliance. Generally the cost of compliance is far lower than the cost of the hedges against risk.<p>I&#x27;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.

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&#x27;t have to fill out a passport application to sell a few coins.