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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

#121

Post by axoltl »

kyledrake wrote: post #104
iancarroll wrote: post #102

Earlier quoted context omitted.

If the password on boot option actually encrypts something, wouldn't that solve the problem?

That's what it currently does.

The code seems to suggest this was written by someone that isn't all that versed in crypto, which is more than a little worrying for an ATM:

hash_pbkdf2('sha256', $password, $salt, self::ITERATIONS, $saltSize, true);

where self::ITERATIONS is 500. That's extremely low.

Furthermore, they're using CBC mode encryption for the 'config' file rather than an authenticated cipher. The only 'authentication' there is is whether the file inflates. Because the IV is in the encrypted file (and I can pick any password), I can make the first block decrypt as anything. Depending on when gzinflate throws an error, I could potentially make the decrypt succeed with just control over the first block.

Neither of the issues is (in this case, because it's 'just' the config file encryption) probably anything to especially worry about, but it does show that other, more critical, parts of the codebase might not be up to snuff.

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

#122

Post by rasz_pl »

aleem wrote: post #89
aleem wrote: post #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 action…

Jordan Kelley has since deleted his original response but you can still view it at http://i.imgur.com/WXyGPM3.png

When I clicked on his nickname, robocoinjordan, few hours ago there was ANOTHER post from him where he states he is sorry and just wired the money - it seems that second post is also deleted now

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

#123

Post by wyager »

agorabinary wrote: post #9
wyager wrote: post #2

I've heard nothing but bad reviews about these things from the user end as well. I have no idea why one would buy a Robocoin machine when there are a number of evidently superior alternatives.

How are the alternatives "evidently superior"? Not that I doubt this Robocoin experience, but playing devil's advocate and the bitcoin economy... is a bit necessary. When Butterfly Labs was scamming people over so long a period, it was difficult to mention them without a flurry of negative personal anecdotes coming your way. Is this also the case with Robocoin, or is this an isolated incident?

>How are the alternatives "evidently superior"?

The existence of positive reviews and relative lack of negative reviews.

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

#124

Post by kaoD »

jellicle wrote: post #75
flyinglizard wrote: post #45

Earlier quoted context omitted.

I wouldn't say Jordan has the upper hand. Managing the reputation of the company is critical for the survival of a startup. Andrew may lose, at worst, $20k, but Jordan can lose everything (unless its a scam or they already made a substantial profit from these machines).

Let's recap the situation: Andrew: has no money Jordan: has all the money Which side were you saying is losing again?

> Which side were you saying is losing again?

His investors.

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

#125

Post by [deleted] »

jellicle wrote: post #75
flyinglizard wrote: post #45

Earlier quoted context omitted.

I wouldn't say Jordan has the upper hand. Managing the reputation of the company is critical for the survival of a startup. Andrew may lose, at worst, $20k, but Jordan can lose everything (unless its a scam or they already made a substantial profit from these machines).

Let's recap the situation: Andrew: has no money Jordan: has all the money Which side were you saying is losing again?

[deleted]

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

#126

Post by krunkcoin »

jboggan wrote: post #99
Animats wrote: 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…

There's a big difference between an "ordinary ATM" machine and the NCR/Diebold machines that the large American banks deploy. Sure, you can get a Hyosung/Triton/Wincor/$whatever machine and it will technically function for the usual customer operations . . . but I would never order those machines if I were in a purchasing capacity because of physical security concerns. I've worked with enough damaged/compromised mach…

"if you want to actually make money you should build a regular banking ATM network that uses Bitcoin/altcoins in the background for transaction processing. That would actually disrupt the industry and allow you to undercut the other networks' pricing models."

How exactly is this cost-based "disruption" supposed to work when Bitcoin and friends are outrageously expensive per transaction?

One of the funniest things about the entire Bitcoin movement is the way that self-styled experts babble on and on about how amazing a technical revolution cryptocurrency is, despite clearly not understanding the first thing about cryptocurrency technology. Bitcoin is an experimental attempt to solve the classic Byzantine Generals' Problem, which can be boiled down to "how can a public transaction ledger maintained by its own users (with no central authority) be resistant to attack by bad actors". The Bitcoin "solution" to this problem is, in essence, for each node on the network to provably waste energy in an exceedingly flagrant way, in hopes that the costs of taking over the network are too high for any individual bad actor.

Well guess what, my friend? That means Bitcoin ends up chewing ridiculous amounts of energy doing no useful work on the desired end product of the system -- the ledger of transactions. Trust-based systems (you know, the kind deployed by, say, a bank, which would like to believe it can run its own system) do not need to waste energy, because they aren't built on deliberately wasting energy.

Bitcoin only makes sense if you are fanatically dedicated to the notion that Gibsonian dystopias (wherein the collapse of public institutions requires development of cryptocurrency) are either inevitable or desirable. It certainly isn't going to disrupt the existing system by being more cost- or energy-efficient. It isn't, it can't be, and that's by design. (Since Nakamoto couldn't figure out a less-bad way of solving Byzantine Generals.)

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

#127

Post by [deleted] »

nikcub wrote: post #84
wsxcde wrote: post #64

Earlier quoted context omitted.

>There is a huge opportunity in cutting the costs and fees associated with trade finance with bitcoin. Why is there an opportunity with bitcoin? Aren't the costs and fees paying for the legal agreements, risk management, arbitration and things like that? Bitcoin might possibly reduce the cost of moving the dollars around but I suspect this is a very small fraction of the cost of this type of service.

Trade finance isn't a transparent market. The costs are higher because the way it works atm is you work with your favorite bank or call 2 or 3 others. There is no real price discovery. There are also high costs in settlement, and a barrier of entry for financing that wouldn't have to exist if you could sell tranches in a distributed way online - similar to kickstarter. An m-of-n transaction with a decent and trusted…

[deleted]

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

#128

Post by nadaviv »

cube13 wrote: post #92
nikcub wrote: post #84

Earlier quoted context omitted.

Trade finance isn't a transparent market. The costs are higher because the way it works atm is you work with your favorite bank or call 2 or 3 others. There is no real price discovery. There are also high costs in settlement, and a barrier of entry for financing that wouldn't have to exist if you could sell tranches in a distributed way online - similar to kickstarter. An m-of-n transaction with a decent and trusted…

>An m-of-n transaction with a decent and trusted intermediary (or multiple less trusted intermediaries) could also replace bank guarantees, which is the simplest form of trade finance. There are also other opportunities in using bitcoin as proof of ownership or proof that you hold a product. So let's replace banks with... banks? The overhead costs that bitcoin will save are just the wire transfer fees. Beyond that, t…

There's one big difference here: with Bitcoin's multi-signature transactions, you can require the agreement of two of the buyer, seller and arbiter in order to release the funds. The arbiter cannot move funds on its own and must have the cooperation of one of the other parties, which means that he doesn't actually control nor hold any funds. The legal situation here is a classic binding arbitration, and not an escrow - which are very strictly regulated, require licensing in some parts of the world and have a very high costs of operations due to bonds and securities.

Dealing with arbitration services rather than with escrow makes this much simpler, drops the entry/operational costs to nearly nothing and does not even require a lawyer to assist you with the process. This lowers the barriers of entry significantly and allows to create a competitive market for arbitration services in a way that's simply not possible when an escrow is required, leading to reduced end-user costs and improved service quality.

Source: I'm the founder of Bitrated [1], a service that enables exactly those kinds of arbitration services, and received extensive legal advice on this matter from my attorney. Do note, however, that this is a new and somewhat gray territory that can be interpreted in multiple ways (and of course, IANAL/TINLA apply - ask your own lawyer before doing anything.)

(P.S. Bitrated v2, a complete rewrite I've been working on for the past 6 months, which now includes an identity & reputation management system, is about to be shortly released. If anyone is interested, you can follow @bitrated on twitter for updates. )

[1] https://www.bitrated.com/

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

#129

Post by scintill76 »

krunkcoin wrote: post #126
jboggan wrote: post #99

Earlier quoted context omitted.

There's a big difference between an "ordinary ATM" machine and the NCR/Diebold machines that the large American banks deploy. Sure, you can get a Hyosung/Triton/Wincor/$whatever machine and it will technically function for the usual customer operations . . . but I would never order those machines if I were in a purchasing capacity because of physical security concerns. I've worked with enough damaged/compromised mach…

"if you want to actually make money you should build a regular banking ATM network that uses Bitcoin/altcoins in the background for transaction processing. That would actually disrupt the industry and allow you to undercut the other networks' pricing models." How exactly is this cost-based "disruption" supposed to work when Bitcoin and friends are outrageously expensive per transaction? One of the funniest things abo…

> The Bitcoin "solution" to this problem is, in essence, for each node on the network to provably waste energy in an exceedingly flagrant way, in hopes that the costs of taking over the network are too high for any individual bad actor

This is like saying, "The traditional banking 'solution' is to have a bunch of lawyers and government agencies waste time, paper, and ink drafting up and verifying documents, in hopes that the costs of taking over the system are too high for any individual bad actor." Obviously it's not perfect, but neither is any other financial system. They both serve a purpose: addressing problems that haven't been solved any other way, so it's not a waste.

I'm not even as rabid of a Bitcoin fan as some others, but it's just silly to read "OMG, mining costs energy!" when so does any other activity. At least put out some numbers to show how much more wasteful mining is than other systems, in your opinion. And who appointed you to decide which uses of energy are dumb/immoral/wasteful? Why do you care if miners are willing to buy electricity and electric companies are willing to sell it?

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

#130

Post by toomuchtodo »

aleem wrote: post #89
aleem wrote: post #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 action…

Jordan Kelley has since deleted his original response but you can still view it at http://i.imgur.com/WXyGPM3.png

http://web.archive.org/web/20141016044652/http://i.imgur.com...
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