Generating $32,000 in 30 days selling a crypto-filled USB stick

Also, does this constitute financial advise? That’s also a big no no in the USA. The CoinTracker guys (current yc batch who make an app for tracking crypto) mentioned that as a reason for not offering a portfolio management product right out of the gate.

Also doesn’t stripes terms of service basically prohibit this? I bring this up because in the interview they say the following:

“What platform/tools do you use for your business?

Stripe for payments”

This is what Stripes TOS says:

“By registering with us, you are confirming that you will not use the Service to accept payments in connection with the following businesses, business activities or business practices.”

“Virtual currency that can be monetized, resold, or converted to physical or digital products and services or otherwise exit the virtual world (e.g., Bitcoin); sale of stored value or credits maintained, accepted and issued by anyone other than the seller ”

https://stripe.com/ca/prohibited-businesses

I think this is a cool idea, I’m just not sure if they are going about it in a compliant way. If they are doing the right thing they should stick a FAQ up on their launch page ASAP.

Assuming they are doing this legally I’d also love to know how they are handling taxes when they buy these 100 currencies. I.e when you buy alts using eth/btc that’s a taxable event. How do they factor that into the pricing.

I look forward to the "How I lost $32,000 selling crypto-USBs" after the fraud claims and chargebacks are filed.

I think Dr. McCoy said it best: “There aren't going to be any damn permits. How can you get a permit to do a damn illegal thing!”

They should be more concerned about federal prosecution for fraud

> I don't get this

Because it is a scam

I'm not sure if you do. How is this any different than "buy X product for $50 and get a $5 mail-in-rebate via AMEX gift card"?

We've had some conversations with our legal team at Cooley & some conversations with outside counsel at Goodwin Procter. They have not been able to reach consensus on whether we fall within regulatory oversight. Until then, we're not going to be selling anymore in the United States. It comes down to whether this is art or a collectible or not. We're working on it & have stopped sales for the time being. :)

> Not to mention selling crypto with credit cards is a great way to go broke unless you own the keys like Coinbase does.

This is a fair point, there is actually trust on both sides of the relationship here - we're trusting that our customers will not chargeback & they're trusting us not to steal their keys.

> Also, why would you trust the keys they are sending you? Having someone else generate a wallet for you then sending it to you via a USB key sounds very very bad.

We originally thought so as well. When we sold a bunch we were surprised & started talking to our customers. It turns out, they don't want to go through the hassle of finding a wallet creator, disconnecting their computer from the internet, generating a wallet, writing down private keys or mnemonics & securing them.

You can think of this kind of how car dealerships don't run their own mail servers anymore or pizza places don't run their own instance of a bind DNS server. They want the convenience of not having to worry about it.

We're currently working hard on a v2 that makes it a bit more secure while maintaining usability.

> I don't get this.

We really didn't either, but the people that have trusted us with their money helped us understand this: Everyone who is working on cryptocurrency projects is suffering from the curse of knowledge [1] - most of them don't care about the end user.

1. https://en.wikipedia.org/wiki/Curse_of_knowledge

Even if it is random cryptocurrencies, though, if they're smart, the amounts of each of said currencies should add up—at moment of sale, when converted to USD—to a constant amount. In that case, it'd be random ratios of each currency, to fill in a crypto "instrument." (Actually, I would expect this to be true if they have any business sense at all, since the only way to be able to do their books is if they can track their costs, which is only feasible if they have a fixed per-unit cost.)

Or, to put that another way, rather than a lottery per se, this might be more of a crypto-backed Collateralized Debt Obligation issuance where people don't get to know which tranch they're buying. (Which is legal, AFAIK; if it wasn't, the 2007 mortgage bubble couldn't have happened.)

How about if I sell you scrap gold jewelry on eBay? It's value will change before you get it and neither of us really knows how much gold is in it when the transaction takes place.

http://www.orlandosentinel.com/opinion/os-ed-kiss-off-privat...

Hey Tom! Guy from the article here. First off, thanks for Metabase. I'm a big fan & recommend it often.

Second, you're absolutely right. We have been capping people at $1500 purchases per month unless they were willing to provide identification & an understanding of the risks associated with our service.

> Nor would I recommend the founders continue to run it unless they've consulted a lawyer and are aware they're likely running a money transmitter business. See https://en.bitcoin.it/wiki/Casascius_physical_bitcoins#Suspe....

Casascius very simply shut down, some of our counsel thinks we have legal basis to not be a money transmitter while other legal counsel believes we may be. We're currently working through that to understand how and where we stand to adapt our offering to be within the limits of the law.

> Accepting credit cards as payment for cryptocurrency is also a risky proposition, to say the least.

Agreed. Mutual trust has been required, we're working on something better than that now :D

Wait, selling bitcoin in one the many bitcoin meetups around the U.S. is illegal?

https://www.contentful.com/faq/about-contentful/#what-is-con...

     # read this story as text-only, no javascript;
     t=198f3c4c31d49ced9b00837138196ec7b5c415904e81b59f3ea04e7b3959a1c9 ;
     curl -4 https://cdn.contentful.com/spaces/t0pm5m7uku03/entries/4NOhsWpS3m4esgOG6uMYm?access_token=$t \
     |exec sed 's/{/\
     /g;s/\\n/\
     /g;s/\\"/\"/g;s/}//g;s/ *//;s/\"###/\
     \
     ###/;' > 1.htm ;
     exec firefox file:///1.htm ;

     # another script to get all the stories from starterstory.com, text-only, no javascript;
     # sample output:

     
      ---------------------
      id: ventana-surfboards-and-supplies
      title: Ventana Surfboards & Supplies
      subtitle: Growing A Business Selling Surfboards As Pieces of Art
      description: Collector surfboards and more.
      link: /ventana-surfboards-and-supplies
      name: David Dennis
      revenue: 8e3
      measurement: revenue/mo
      founders: 2
      employees: 0
      startDate: 2014/08/01
      location: Santa Cruz, CA
      category: other
      publishedDate: 2018/03/27
      contentId: 5YPTt4uj3a022uOi0uASUc
     

   [hyperlink to content]

      type: story
     
      ---------------------
      id: cblocks
      title: CBlocks.io
      subtitle: Earning $32,000 in 30 Days With a Crypto-Filled USB Drive
      description: Crypto-filled USB drive.
      link: /cblocks
      name: Auston Bunsen
      revenue: 32e3
      measurement: revenue/mo
      founders: 3
      employees: 0
      startDate: 2018/01/01
      location: Miami, FL
      category: other
      publishedDate: 2018/03/27
      contentId: 4NOhsWpS3m4esgOG6uMYm
     

   [hyperlink to content]

      type: story
     
      ---------------------
 
     etc.

     curl -4o 1.js https://www.starterstory.com/static/js/main.6bf2bb3b.js ;
     t=$(exec sed 's/.*access_token=//;/acess_token/q;s/\".*//;/\//d' 1.js);
     exec sed 's/{id:\"/\
     &/g;s/\"type\":story/&\
     /g;/{id:\".*title:/!d;s/.*X=\[//;s/t.a=X.*//;/{id:\".*title:/p;' 1.js \
     |exec sed '1s/^/<pre>/;s/,[^ 0]/\
     &/g;$s/$/<\/pre>/;/Date:/{s/new Date(\"//g;s/\")//g;};s/{/\
     ---------------------\
     /;' \
     |exec sed '/additional:/d;s/}.*//;/component:/d;/live:/d;/dynamic:/d;/\"jpg/d;/\"jpeg/d;/[iI]mage:Object(/d;s>contentId:\".\{22\}>&\"\
     </pre\><a href=https://cdn.contentful.com/spaces/t0pm5m7uku03/entries/&?access_token='"$t"'\>[hyperlink to content]</a\><pre\>>;s>contentId:>>2;s>\">>g;s>,>>;s>:>: >' > 1.htm;

     exec firefox file:///1.htm ;

Or legal

It is probably confusing from a business perspective to many on HN because it makes little sense. But think about it from the perspective of your aunt/grandma/etc. They get a USB drive (something they have a rough understanding of) that comes with "a bunch of cryptocurrencies". Some of these people probably think this is the next Beanie Baby. Buy it, set it on a shelf and wait 15 years, at which point it will certainly be worth enough to pay for their kids' college. (/s).

> We thought that there was no way people would pay us for this kind of service, but we spiked out a site over the weekend and launched that following Monday.