I have seen more than one of these "vending machines" in Dubai.
Interesting thing is that they constantly adjust the price of the gold bars as the price of gold fluctuates. I guess these machines need a permanent internet connection to receive the current gold price.
Who will be the first to do a MITM and adjust the price to 0.001? ;)
You'd have to have quite a bit of inside info to do that & given hopefully the designers of the machine had enough forethought to not connect the thing to the open internet. To top that off they may even have programmed it to stop if the price variations get too crazy (99% drop may trigger it).
You're making the mistake of assuming that the people who built it are as competent as you are when you're relaxed and posting on HN, rather than being the lowest bidder and/or somebody's cousin and/or having a two-week deadline. It's probably implemented in javascript + nodejs w/mongodb.
I would think it's less traceable though, no? This is not coming from any industry knowledge, but I would think that an ATM would know the bill #s, so if you stole it, the bills would be tagged. You can always melt the gold. But this isn't based on any practical knowledge.
Those silver American Eagles make a great, almost magical from the child's perspective, alternative to the lame-o paper dollar under the pillow when your kid looses a tooth, but I would recommend working your way up to them as it gets a little expensive, especially if you have more than one toddler.
That's what my father did for my brother and I as kids. Every time one of us lost a tooth, we got a silver American Eagle. Then we'd have to put it into a protective sleeve and look up its details in a coin book we had in the house. My brother and I would spend hours looking over every detail of those coins (there's not a lot to do when you're six and living in Wyoming).
I always wondered where they came from until I grew up and found my dad's giant suitcase full of coins.
I remember one night after I lost a tooth where I tried to barricade my bedroom door in order to test if the tooth fairy was real. My parents didn't approve.
Ah, but if you do that of _course_ the fairies won't be able to find you. They come down the chimney and then listen for the sound of a recently fallen tooth. With the door closed they'd not be able to hear it.
If you have some time, and are interested in culture, architecture, history or just New York from an interesting perspective, it's worth reading some more of Scouting NY. There's a whole lot of very interesting material there, and some nice photographs too.
Saw this a little while back, the novelty is fun, but the prices are really, really high.
Silver spot right now is ~$19/oz and they're selling it for $88, a 360%+ markup (granted this is a coin vs a bar).
Gold spot is ~$1260/oz, and their 1oz is $1367, 8.5% markup, their 10g is $1389/oz, a 10% markup.
If you were interested in gold, you could get from APMEX for $1,336.83/oz credit, or less for cash. Or from a nice man in the diamond district for spot plus $50 cash.
The $88 coin must be a special coin and/or in proof condition. They are selling an American Silver Eagle for $27 which is still a huge markup, but not 360%.
Practically, it depends on whether the markup is in line with the spread for street currency exchange, or in line with vending machine markup versus wholesale cost of goods.
Except you have to use an ATM debit card in the machine. If you wanted anonymity or lack of traceability, I think you'd rather buy with cash, probably using an actual in-person transaction.
(I don't know if the US or other countries require registering identity of people buying gold in person in cash? I don't think the US does).
Any cash purchase (of anything, not gold in particular) over $10,000 requires submitting a form to the treasury. Not that that's easy to reliably enforce.
If someone buys gold from this machine, potential thieves can guarantee that they'll be carrying at least $255, which is way more than most people take from ATMs.
I actually don't understand people who regularly use atms.
If you have access to a bank account then it's not too difficult to get a credit card and in terms of security a CC is much easier to control than a bunch of little pieces of paper.
If the plastic gets stolen or lost you can just cancel it and lose nothing except time (and waiting for a new card to arrive) while with cash you lose it or it gets stolen -- it's gone.
Just to be clear - a credit card should only be used as a debit card, using it like free money is only lying to yourself.
The reason I specified NYC is that it (along with other large cities) contains a number of small businesses that don't take credit cards. Your suggestions sounds good in practice, but there are a number of services I would lose or have to travel significantly farther for were I to refuse to carry cash. Cash is also the easiest way to split checks (most restaurants won't split checks more than N ways, for some N <= 3) and I frequently eat out in large groups.
A good number of popular small restaurants in NYC are cash-only. And then there's splitting the bill with large groups, where you don't want to (or can't) add yet another card to the pile, especially if you're not splitting evenly. Also, if you drive, gas stations charge 5-10% more for credit cards.
Problem is as soon as you buy it you lose money. The reason being that if you want to sell it back you must go to a dealer he will low ball you and you will have a hard time getting the actual value of the gold.
It is not like $100 bill that you could just spend on whatever you want, you are stuck with something that in order to cash out you must take a cut by selling it to a dealer.
Physical precious metals have some of the worst spreads/fees and friction involved buying and selling compared to other assets.
Stocks: $5 flat fee per trade is typical, index funds charge as low as 0.05% / year.
Bonds: Cheap bond index funds charge 0.1% to 0.3% / year. Buying bonds directly from the treasury carries no fees.
Bitcoin: 0.20-1% fee is typical when purchased online
The only common asset class that is worse in this regard would be real estate, but unlike precious metals, real estate can at least produce income or provide utility while it is held.
"Physical precious metals have some of the worst spreads/fees"
Here is a site that buys 1 ounce gold bars for $10 below the current spot price and sells them for 30 above. that is 0.8% spread on the side a slightly over 2% on the buy side.
Someone in the comments: "what if someone files a chargeback on the card?". Any thoughts on this? By using the machine you've moved from a reversible transaction to an ireversible transaction. It looks ripe for scammers to abuse.
At least at a counter they'd have your face on cam, but with this they don't.
I doubt you could easily initiate a chargeback because: they only accept debit cards, it's a card-present transaction, and presumably the buyer has to enter their PIN.
For the sake of the argument, you can still initiate a chargeback even if you don't claim unauthorized use of your card: e.g. you did make a purchase but the merchant didn't deliver the product, or the product was defective and the merchant refused to give you a refund, etc. But I don't think you'll have much luck trying to claim that a bona-fide financial institution gave you something that's not gold.
They don't accept credit cards, only debit cards. So it has the same properties as a normal ATM. You can't take cash out of an ATM and then issue a chargeback.
Until banks begin routinely scan serial numbers of all incoming notes (and the implications of this filter through to merchants), gold and cash are about equally hard.
ATM is a bit of a misnomer isn't it? Can you deposit gold into your "account" at the machine? If not then it's similar to any other sales kiosk (like the ones at the airport selling headphones)
Any ATM attached to a bank does let you deposit, actually. In the states, mostly just in envelopes that are counted later, but in China, they actually count and verify the money in place.
I would imagine that there are more ATMs unattached to banks than attached, so saying "most" ATMs don't take deposits doesn't seem like a stretch to me.
As for deposits, modern ATMs in the US will count bills and also scan and deposit checks immediately without envelopes.
Interesting thing is that they constantly adjust the price of the gold bars as the price of gold fluctuates. I guess these machines need a permanent internet connection to receive the current gold price.
Who will be the first to do a MITM and adjust the price to 0.001? ;)