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The Great Robocoin Rip-off: How We Lost $25,000 Buying a Robocoin ATM

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Re: The Great Robocoin Rip-off: How We Lost $25,000 Buying a Robocoin ATM

#31
post #25
post #4

wow that sounds like a horrible experience! it is unfortunate that you got stung like that. out of interest, what was the expected ROI? I mean, you sunk $25K into it. even if you were charging 5% fees - you would need half a million in transactions to break even, and that isn't including the monthly rental fee for the location. is there really that big of a demand for BTC in a pub?

See the email from Jordan on August 27, 2014--he claims "average income is ~$2300/month". Given the source that's probably a best case scenario.

Yeah I saw that but I am sure they did their own figures rather than listen to what the vendor was saying others were netting.

Re: The Great Robocoin Rip-off: How We Lost $25,000 Buying a Robocoin ATM

#32
post #30

Absolutely terrible. I have the feeling that Jordan knows exactly what he's doing. The amount of $20,000 is a lot but it's not that much once you start to hire lawyers and file a suit or go into arbitration. Sounds like he's stringing them along waiting to see how much more cash they're willing to invest to recoup that $20,000. Even worse Jordan might be setting himself up for a settlement of less than $20,000 where…

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Re: The Great Robocoin Rip-off: How We Lost $25,000 Buying a Robocoin ATM

#33
post #27

The fraud level in the Bitcoin world is so high that it makes South Florida look good. There's a working Robocoin ATM at Hacker Dojo in Mountain View, CA. Nobody uses it. Nor should they. 15% bid/ask spread, 5% fee. Incidentally, the retail price for an ordinary ATM machine is $2,000 to $4,500, depending on the features ordered. A standard through-the-wall bank ATM is about $9,500. Even if you order every option from…

Ordinary ATMs have economies of scale not available to Bitcoin ATMs, from simply making bigger purchases to distributing fixed costs (like software development). It's also a much safer business - you can be relatively sure the dollar economy won't crash tomorrow and kill your business.

Re: The Great Robocoin Rip-off: How We Lost $25,000 Buying a Robocoin ATM

#35
post #30

Absolutely terrible. I have the feeling that Jordan knows exactly what he's doing. The amount of $20,000 is a lot but it's not that much once you start to hire lawyers and file a suit or go into arbitration. Sounds like he's stringing them along waiting to see how much more cash they're willing to invest to recoup that $20,000. Even worse Jordan might be setting himself up for a settlement of less than $20,000 where…

> I have the feeling that Jordan knows exactly what he's doing. The amount of $20,000 is a lot but it's not that much once you start to hire lawyers and file a suit or go into arbitration. Sounds like he's stringing them along waiting to see how much more cash they're willing to invest to recoup that $20,000.

I'd say they are just on the verge of bankruptcy and probably have similar experiences with other customers and just attempting to string them along enough that they can keep going.

Re: The Great Robocoin Rip-off: How We Lost $25,000 Buying a Robocoin ATM

#36
If you're wondering how you should do these types of transactions without putting cash up front, the field is called trade finance.

Call your bank - most of them have a trade finance desk, or Google the term. A slightly cheaper way of doing it is to have a lawyer draft a terms of trade or supply agreement with either the funds in escrow with the firm or a bank guarantee.

Having your bank finance the trade is worthwhile as interest rates are so low at the moment. Common terms are 60, 90 or 120 day delivery with FED/LIBOR + x% (where x is the risk profile of your business - shop around to get prices) cost over the term.

The agreement would contain delivery timetables, warranties, customs clearance, liabilities, indemnities, guarantees, who pays what, etc. and you are protected legally without handing over tens of thousands of dollars or more upfront. These contracts are protected by law in almost all jurisdictions.

You don't finalize the transaction and pay for it until all conditions have been met and you have the goods in hand and have verified. The seller is trusting an international bank or a law firm escrow, and they should also have a lawyer or bank on their end (a trusted seller can receive the cash upfront for a fee with the bank picking up the risk, although I doubt any bank would finance a bitcoin atm without verified trade volume and a lower risk profile).

Talk to your lawyer and talk to your bank, having expensive items delivered without risking the full cost is a solved problem as old as finance itself and trillions of dollars annually are traded in this way. The extra $1k or so you'd pay on a $25k deal are worth it for the guarantee. If you ship goods regularly the costs are amortized as you can use the same contracts and finance suppliers. Don't deal with anybody shipping $20k+ valued products that doesn't deal with a bank trade finance desk or law firm and is instead asking for a bank transfer.

This is how most high cost goods are traded - from oil and other commodity supply contracts through to companies like Boeing and Airbus supplying planes, or GE supplying turbines for a power plant. Most people without experience lead into it thinking that buying something that costs $25k, $100k or millions of dollars is just the same as purchasing something at your local store just with bigger numbers. It isn't.

Bitcoin multisig transactions, or m of n transactions are also worth investigating as they cut the costs - although there is currently a lack of escrow/intermediaries who are as trusted as major law firms or an international bank. There is a huge opportunity in cutting the costs and fees associated with trade finance with bitcoin.

Re: The Great Robocoin Rip-off: How We Lost $25,000 Buying a Robocoin ATM

#37

Sad story but: > We’re prepared to take legal action, but we figured we’d give Jordan a taste of internet justice first. IANAL but, I don't think you're helping your case by seeking internet justice.

First, he's doing the morally right thing by calling them out after a fiasco spanning several months, backed by correspondence. Second, applying public pressure to get his refund is much better than going to litigious way, unless he seeks damages too (which I believe he doesn't - just wants his refund back).

I get that we are on the Internet and everyone gets a voice, but they should have let their lawyers do the talking. Both companies are run by adults I assume, but both are throwing sand in each other's faces running across the playground, in this case reddit, Twitter and HN. Either party can use this as slander I suppose.

If Robocoin is still making money, this bad PR might go against them for just a bit, but their "success" with others will pass on via word of mouth.

If acting like kids on the Internet has worked well for others in order to get their own back, someone should write up a pretty medium article outlining a proper way to do this for any company.

Re: The Great Robocoin Rip-off: How We Lost $25,000 Buying a Robocoin ATM

#39
Jordan Kelley has posted his response on Reddit http://www.reddit.com/r/Bitcoin/comments/2jakg4/the_great_ro...

Judging from the replies, it seems to have backfired probably because he did not acknowledge the errors on his side (shipping a lemon, unresponsive over email and not having provided a refund yet).

Worse, he doesn't seem to realise that the name-and-shame was a result of his and ultimately RoboCoin's actions.

Edit: The correct response would have been to issue a refund immediately, acknowledge and apologise for the issue, highlight the trouble area (upstream supplier issues or whatever lead to this), and commit to solving or already having solved this problem for future clients + internal review of this mishap.

Re: The Great Robocoin Rip-off: How We Lost $25,000 Buying a Robocoin ATM

#40
Personally, I've tried five times to make small purchases with Bitcoin (this was several years ago). In all cases I was ripped off and never received product.

It's not going to be government regulations that kill Bitcoin, its the associations with illicit drugs, child pornography, and dishonesty of vendors like Robocoin.

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