A Tale of Three Vending Machines

Coinstar, Redbox and a Lottery ticket dispenser, side by side, in California. SOMETHING MUST BE DONE.

People who think all Bitcoin purchases must be accompanied by KYC/AML and other Security Theatre are 100% wrong. Bitcoin is no different to any purchase of “Pay as You Go” telephone top-up credits, iTunes and Amazon Gift Cards or even Lottery tickets, which is…gambling.

The photo at the top of this post was taken today in a California supermarket. Three machines stand side by side near the exit. The one on the far right is a Scratchers® Vending Machine Lottery ticket dispenser. You can insert between $1 and $20 to buy tickets and when I say, “you” I mean anybody can do it. The machine is unsupervised.

From the “Calottery” website.

The Lottery ticket dispenser doesn’t ask for any ID to gamble. A child can go up to this machine and buy a Lottery ticket. Think about that. It is ILLEGAL under US Federal and state law for a private entity to run a lottery; this is the government selling gambling to children via easy to access and ubiquitous vending machines.

The most common minimum age for participating in state Lottery in the USA is 18 years. Arizona and Iowa require that players are 21 years of age before it is legal for them play. In California you must be 18. There is no one supervising this machine to make sure persons under the age of 18 do not access it and buy tickets. Rather odd, isn't it?

The box in the middle is a movie vending machine from the Redbox company. From their literature,

Can children under the age of 17 rent R-rated movies? No, they can’t. Redbox requires that you validate your age when renting any movies that are rated R by the Motion Picture Association of America (MPAA).

Redbox takes credit cards as a form of payment, and they claim they require that you prove that you are 18 or older to rent an R rated movie, but in practice this is easily circumvented. If you borrow your father’s credit card and take it down to this supermarket, you can rent an “R” rated movie if you are 15 years old, because no one is checking the rentals made at this machine, and your identity is not verified during the purchase. This is another instance of a system that is wide open to abuse.

On the far left is the Coinstar machine. This machine sells Bitcoin. Read this thread about what it’s like to use it...

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So... I just tried out the @coinstar @CoinmeATM partnership at my local grocery store and bought a small amount of Bitcoin.

 — @CryptoParadyme

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Not only is the ATM loud and annoying. But the buttons are very finicky when trying to complete the the transaction. I don't need a very loud beep every time I hit my phone number digits. Thank you.

 — @CryptoParadyme

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Put in $25. Got the slip. Great. Went back to my car. Name. Phone. Number. Email. Okay. Identification. Lame but not unexpected. Seems silly for such a small amount. Wasn't able to do it from mobile. App wouldn't complete the process. Tried on 4G and Wifi.

 — @CryptoParadyme

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Get home. Upload everything. Now they want a selfie. For $25. Selfie uploaded. Please wait 5 minutes for verification. Fine. They push me through signing up for their website to create an account.

 — @CryptoParadyme

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Are you kidding me?

 — @CryptoParadyme

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So while I'm waiting I can moan about the time, energy expended on this process versus the ease of other services. This is so many steps to simply buy a small amount of Bitcoin it's ridiculous. Yes it's good to get Bitcoin out into the world. Coinstar provides large exposure

 — @CryptoParadyme

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I still can't withdraw my $25. It shows up as redeemed. But it's not available for withdrawal yet.

 — @CryptoParadyme

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So now I have another exchange account with limited access that has my ID and selfie (another honeypot for hackers) that I'm never going to use again. I'm sorry @Coinme. I want to like this, but I can't. Hope you guys make it easier and safer for end users in the future.

 — @CryptoParadyme

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I know you're limited by the laws of the respected jurisdictions. But this was in every way, not worth the trouble.

 — @CryptoParadyme

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Buy bitcoin with cash, then fill out a form, submit your ID and selfie, wait over an hour and give us your email to make an account. I don't need my Coinme account to be a full wallet, I just want to withdraw to my own storage.

 — @CryptoParadyme

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It's been over 30 minutes and my redemption still has not shown up for withdrawal. The redemption shows up as completed but I simply cannot withdraw.

 — @CryptoParadyme

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Finally withdrew with a fee of 1 Sat/B. Lost 4% in fees to the ATM + Their large markup on Bitcoin price + the extra transaction fee their bad tx organization added.

 — @CryptoParadyme

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But it should not take ~2+ hours to onboard a new user and withdraw for an ATM.

 — @CryptoParadyme

What can I say? “Wow”.

Now compare and contrast this with buying $20 in Bitcoin through Azteco.

1. Go to the store, buy an Azteco Voucher for $20. It’s issued in 3 seconds
2. Type the voucher code into the Azteco website, paste your Bitcoin address
3. Is the number of seconds it takes for your Bitcoin to arrive
4. There is no fourth step.

The Azteco process takes less than 2 minutes.

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This little https://t.co/P4AYsAeTgp printer replaces #Bitcoin ATM's. Merchants anywhere in the world can easily sell Bitcoin. 1. Swap your fiat for voucher-code that loads onto your wallet. Done. This is the on-ramp the industry is gagging for. @Azteco_ @HeisenbergCap

 — @maxkeiser

Wait…What?!

None of the three supermarket processes described above makes any sense obviously, and the questions raised by this stark juxtaposition of three services should come easily to you if you can think. How is it that buying $20 of Bitcoin with your spare change requires that you present ID, a telephone number and a picture of your face, and hours before you “take delivery”, but buying a lottery ticket requires only…handing over the money?

Similarly, why are not Lottery ticket dispensers requiring all the Heath Robinson Security Theatre that Bitcoin vending machines attract? You know perfectly well that a 15 year old buying a winning lottery ticket would get her mother to cash it in for her. Why are there absolutely no controls on those machines?

Furthermore, the vast majority of lottery tickets don’t win, unlike in Bitcoin, where the users of it all get the same utility and there is no gambling involved at all. No, people who buy $20 in Bitcoin are not speculating that the price will moon, you silly goose.

The same applies to the video dispensing machine. Why isn’t the identity of the purchaser verified before they rent an R rated movie? Clearly, none of this makes any sense at all.

The scenario described here is a modern version of “Emperor’s New Clothes”. Three machines side by side, all contradicting each other in the way that they operate and the assumptions behind how they deliver services. It is Security Theatre, nonsense, and upside down circus absurdity all at once!

Thank you to Ryan Dippmann for the photograph. Follow Azteco for news and updates.

A Tale of Three Vending Machines was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.