I tried to pay with Bitcoin at a Mexico City bar. It didn’t go well | Hacker News Reader

I tried to pay with Bitcoin at a Mexico City bar. It didn’t go well

arstechnica.com

29 pointsheadalgorithm21 comments

I had the exact same experience at the bitcoin only cafe paralelni Polis in Prauge. Only since they refuse to take cash I was left in a pinch. One of the people who worked there offered to spot me.... only to then adjust his balance which was registered on a piece of paper denoted in czk. Because as he said “the rate fluctuates so much and it takes so long to transfer that most who here just do one large transfer at some point and then run off the tab”.

Af far as proving that a bitcoin only cafe is viable it’s nothing but a PR scam. And I truly doubt that the people who’s balance was on that sheet actually went to the trouble of converting czk to bitcoin and then have the staff jot down the current rate equivalent czk. Most likely they just pay cash, and keep the facade up so media can’t claim their bitcoin only cafe is failing at being bitcoin only.

Good coffee though, just not worth the hassle.

I already had bitcoin (and lightning) on a few different wallets on my phone and was able to pay at Paralelni Polis without any friction. It was easier than using my card because I didn't have to sign anything, scan the QR code in my hot wallet and it was done instantly. I think the step of getting Bitcoin is usually where the friction happens because you usually have to wait for a certain number of confirmed blocks (10 minute intervals) before you can send bitcoin from a new wallet.

I wished they had Lightning set up at Paralelni because to me this is even cooler for Point of Sale systems.

It doesn't matter the age of your wallet. Without waiting for other blocks to write your payment you run the risk of a double pay leaving you with nothing. e.g. I buy some coffee and then immediately send all funds from that wallet to my other wallet. If the 2nd transaction gets recorded first, the first tx won't happen.

This requires colluding with a miner, since nodes will reject a transaction that spends the same output as a transaction they've already seen. For a small payment like a coffee, it should be enough to check that the transaction has a reasonable fee and wait 1 second to see that it has propagated through the network.

The double spend problem with zero-conf payments is about equivalent to people making fake bank notes. It's possible and maybe a problem for small transactions (large TXNs people wait around for a few confirmations) but its stealing and just as illegal as any other form of theft.

> I didn't have to sign anything

Hmm, I guess you are american (with a magstripe card?) traveling in the EU? I never had to sign anything when paying with card here.

Having to put in a PIN is even worse than signing.

You don't even have to use the PIN if you are using NFC and paying under 500 CZK.

Yeah, true. Apple pay should get rid of this limit too, but some countries have fucked PoS configs.

I believe it’s set by law and not by Apple. IIRC when I was in Iceland it was 5000 ISK (roughly 50 dollars) for every single machine in the country. Over that you have to use the physical card or enter PIN/signature if the machine supports it (none of the ones I used in Iceland supported entering after NFC so I ended up having to use the card). Since everything is expensive as hell in Iceland it kind of diminishes the utility of the NFC a bit.

Edit: Actually after I typed above out I found a chart that has the limits: https://merchantmachine.co.uk/contactless-limits/

Apple Pay is authenticated and completely different from normal contactless payments which are unauthenticated.

Misconfigured terminals just happen to be really common, so sometimes it’ll work and sometimes it wont.

Why didn't this cafe use Lightning? Retailers: if you're going to take crypto, do the smart thing and use Lightning for BTC or xDAI for Ethereum. I'm just a crypto-enthusiast and even I know you don't use Layer 1 for transactional payments.

Making traditional payments at places like bars and coffee shops isn't really a good usecase for bitcoin in today's environment. It can be fun for enthusiasts, or useful for people who get paid in bitcoin and want an easier way to spend it aside from just selling it. But for people paid in local currency it just adds unnecessary complication.

There are some retail use-cases that make sense, mostly when whoever you're buying from isn't well supported by the banking system. E.g. gambling sites, marijuana dispensaries , VPN services, countries that don't have paypal or VISA etc.

Other than that monetary sovereignty, censorship resistance, evading capital controls and speculation are the name of the game.

Exactly.

It's like complaining about how difficult it is to get a cup of water to drink from Niagara Falls.

Arguably, these institutions aren't failing at the accepting Bitcoin part - which is usually a seamless transaction as the restaurant/bar should accept the money on zero confirmations. Rather, they're failing at the getting bitcoin to people who don't already have it portion.

If this author had bitcoin ready to use on a mobile wallet with him already, he wouldn't have run into the delayed-receipt-of-bitcoin issue with the Bitcoin ATM - which is a well known and documented issue that won't be solved until layer two solutions reliably allow for "zero confirmation" transactions.

What institutions like this should/could be doing is ringing up the total in btc and including the restaurant's bitcoin address on the receipt and having the first-time-bitcoin-using patron go to the Bitcoin ATM to pay cash to the Bitcoin ATM and send the resulting bitcoin to the restaurant's wallet - that way it doesn't matter if the transaction doesn't fully clear until later.

Typing it out, that sounds like a nightmare that might not be worth the 10% discount (especially as the ATM is likely taking a cut, too) and is it really paying in bitcoin at that point?

I guess this just shows my point that these places are meant for people who already have bitcoin to come in and use.

> If this author had bitcoin ready to use on a mobile wallet with him already, he wouldn't have run into the delayed-receipt-of-bitcoin issue with the Bitcoin ATM

But wouldn't he then have run into the confirmation delay of his transaction with the bar, i.e. either he would have to stay behind after payment until confirmations rolled in, or the bar would have had to eat the transaction risk?

The bar would have to eat the transaction risk, at least until the first confirmation (typically under 30 minutes). On the other hand, if they accept any other form of payment besides cash in hand then they are already accepting that risk in the form of chargebacks—which can occur months after the transaction.

The scenario in this article is akin to opening a brand-new account at your local bank and then trying to spend from it with a debit card immediately afterward. You're likely to incur an overdraft penalty, if the transaction isn't simply declined. If you want to pay with Bitcoin you need to have Bitcoin—confirmed—at the the time you make the payment. This is not a problem in practice but it can trip up people experimenting with the system for the first time.

So what was the problem here? Taking a guess as to how the ATM servicer responded to the author’s support ticket, it seems like the ATM servicer is batching small transactions into a larger daily transaction on their end to either cut down on fees or do some sort of rate arbitrage.

Bitcoin as a payment system is pretty much untenable these days due to fees and confirmation times but why couldn’t the bar just accept a different cryptocurrency that is in semi wide use, has near instantaneous confirmations, and sub-cent fees? There are several of these but Ripple is the first one that comes to mind.

If you own a business, one of the worst things to manage is all the different payment systems you have to maintain. Both logistics and tax tracking. Theres a very good reason why merchant service companies exist. They still suck, but they're easier by orders of magnitude, of dealing with all the cards yourself. I can only imagine how much more difficult it can be for companies outside the states. Unless you're in Greece. Then you don't pay any taxes.

That’s why stuff like bitcoin cash and lightning network exist.

Also walking into a bitcoin bar without having some bitcoin already is like walking without cash into a normal bar that only accepts cash but has an ATM and it’s the only ATM in miles: plenty of things can go wrong.

tl;dr:

- The bar had a vending machine for Bitcoin which the author used to convert Pesos into Bitcoin, but he couldn't pay his tab because it took two days for the Bitcoin to show up in his wallet.

- The bar's manager, a Bitcoin evangelist, could not really name any practical usecase for Bitcoin.

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