LAS VEGAS – I’ve been in Las Vegas for a whole week, but I’ve only gambled twice: when I played $1 on The Simpsons slot machine in my hotel, and when I tried to buy $1 (and then, another $10) of bitcoin from a casino ATM.
Both times, I lost it all.
I had heard that the D, a casino and hotel in downtown Las Vegas, had a bitcoin ATM that made it easy to buy and sell the red-hot digital currency. I was intrigued by my colleague’s account of a bitcoin ATM in New York City, which he used to buy $5 of bitcoin back in September. So I figured, hey, Las Vegas is about taking chances, and so is bitcoin.
I’m no cryptocurrency expert — once, many years ago, someone sent me a super-tiny sliver of bitcoin that vanished when the app he used to send it shut down, and I haven’t touched it since. So to get started, I went in intending to invest a single, solitary dollar.
To use the ATM, I first had to download a bitcoin-wallet app, which you use to store your digital currency. I settled on Coinbase, from the $1.6 billion startup of the same name. I verified my account, easy-peasy, got my unique QR code to receive funds, and I was ready to go.
The ATM experience itself started out smoothly. Before I even started, it told me it was valuing bitcoin at a hair over $15,000 per coin, meaning my $1 would buy the barest, tiny sliver of a single coin. That was fine, I knew what I was in for. The ATM verified my identity with a text message sent to my phone, and everything went smoothly.
Then, I put in my dollar bill. It told me it wasn’t enough to receive any bitcoin, whatever that meant. So I put in the only other bill I had on me, which was a $10. Still not enough! I guessed there was some kind of minimum that I just wasn’t hitting, but the machine wasn’t really communicating it to me.
So I cancelled the transaction. It warned me that in doing so, I would “forfeit” my bitcoin, and not get any in return. Whatever.
But then, my $11 never came back out. At all. I even asked for a receipt, which didn’t print. It’s gone, forever.
I reached out to Coin Cloud, the company that made the ATM, to see if this was working as intended. Here was their response:
“The machine cannot refund the case. However, we can manually send you the bitcoin at the appropriate rate. The reason why your transaction did not go through was due to the miners fee. Miners fees are at $40-$45 per transaction. I am estimating that the amount that you will receive will be $1-2 in btc. Please provide me with the phone number you used at the machine and a wallet address where you can receive btc too.”
The money cleared, and according to Coinbase, I’m getting $1.65 back on my $11 investment. Well, it’s better than nothing, and at least customer service got back to me.
A coworker later explained to me about that exorbitant transaction fee, which is due to the fact that the bitcoin network is so crowded and congested. According to Coin Cloud, I would have had to put in $40 to $45 — plus at least one cent — to get even a little bitcoin out of the machine. If that’s the case, I don’t really see why anyone would pay in bitcoin for anything.
It’s also important to remember this isn’t an ATM in the traditional sense — it’s more like a currency exchange. And at a currency exchange, they make their money on the conversion by taking a margin of the transaction, which usually also covers any fees. This ATM doesn’t tell you about any of its fees or anything until you’re already committed to the transaction, and takes your money if you cancel it. Besides, when was the last time you paid a $40-plus ATM fee?
The funny part is that the restaurants at the D accept bitcoin in payment. Presumably, that means if you bought a $10 meal from the casino’s American Coney Island fast-food restaurant in bitcoin, you’d have to pay another $40 to $45 in fees on top of it.
So between that annoying, unexpected, and exorbitant fee, and the fact the machine didn’t convey any of this information, I have to say that my first attempt at seriously using bitcoin gave me some real doubts as to whether or not the currency has a real future at all.
In the meanwhile, I’ve decided not to sell my bitcoin until my $1.65 of bitcoin is worth more than the $11 I originally tried to put in. That means that bitcoin is going to have to go up 10 times in value before I sell.
Actually, as several readers have pointed out since this article originally ran — bitcoin would have to go up about 30 times in value, to over $450,000 a coin, before my holdings would be worth the $11 I put in, plus enough to cover the transaction fee.
Darn. Well, get to it, bitcoin world.
This article originally appeared on BusinessInsider.com.