10 ms·

Show HN: 10% off at Starbucks when you buy with Bitcoin

169 points by mhluongo 13y ago

Xdes 13y ago
Really excited about the new sidechains concept. Can't wait for the first attempt.
- untilHellbanned 13y ago
  what's that?
  - Xdes 13y ago
    The ability to denominate cryptocurrencies in other cryptocurrencies. It's similar to having the dollar back by gold. http://www.cryptocoinsnews.com/news/adam-back-sidechains-can-replace-altcoins-bitcoin-2-0-platforms/2014/04/10 http://www.cryptocoinsnews.com/news/adam-back-sidechains-can...
Xdes 13y ago
Also about the service: is the website compliant with AML and KYC regulation? You might be acting as a money transmitter under FinCEN rules. Might want to consult a lawyer.
- mhluongo 13y ago
  This time, I definitely consulted a lawyer.
myrandomcomment 13y ago
Could we please bring this to a coffee chain that makes good coffee? Peets or Philz?
- mhluongo 13y ago
  Yes we can- and we are. We started with Starbucks for a number of reasons, but I can't wait to get Peets in there. Hell, I'd really love to get some good indie shops- but we've gotta start somewhere.
  - myrandomcomment 13y ago
    Great to hear. Thank you! I love how my real question which received and answer from the company was voted down. Sorry but Starbucks is not really good coffee. I am writing this from the Philz in Palo Alto :)
    - JshWright 13y ago
      Because you're wrong. Starbucks certainly makes 'good' coffee. Can you make better coffee? Absolutely. I'm enough of a coffee snob that I rarely get coffee while I'm out, preferring to make it at home where I can control all the variables. That being said... claiming that Starbucks isn't 'good' coffee is just hipster silliness... Yes, I realize it's mainstream now, and your fedora fits in better at Philz, but Starbucks coffee is certainly 'good' enough for millions of people every day, and it seems like an obvious first choice for an application like this.
      - myrandomcomment 13y ago
        42, not a hipster, no Fedora (well I have a VM running it). I like my coffee in the morning, french press at home (Peet's Garuda). Peet's if I am out and about and once in a great while when I get a chance I love to make it to Philz. I have disliked Starbucks coffee before it was cool thank you very much :) The comment about Starbuck was a bit tongue-in-cheek, but I guess I can see it being taken as Hipster fashion.
        listic 13y ago
        Hey, can I have some of that nice coffee you're having? I live in Russia. I can send you some of Art. Lebedev's (don't know if it's any good, but they roast their own mix, so you can compare) I can PayPal you the money and you'll ship me the coffee. You can ship to my US-based P.O. box. I run Ubuntu on my laptop and CentOS on KVM CentOS VM on a server. Please drop me a line via email (in profile) or any other means (Facebook et el.) http://about.com/nleschov http://about.com/nleschov
- mattgreenrocks 13y ago
  Side comment: how's does Peets fare for espresso-based drinks?
mhluongo 13y ago
Hey guys! You might remember our last app, Card for Coin, where we were buying Starbucks for bitcoin. Well, here's the other side- we're looking forward to your feedback. The websocket stuff is a little touch and go, so please let me know if you have issues. Let me know if anyone has an issue loading a card or getting a refund, and I'll work it out.
- hrayr 13y ago
  Did you, and if so, how did you address the legal issues brought up in your previous post? https://news.ycombinator.com/item?id=7157180 https://news.ycombinator.com/item?id=7157180
  - mhluongo 13y ago
    I've got a firm working on the issue right now. We're seeking clarification from FinCen and keeping that side closed until we know their stance.
  - molsongolden 13y ago
    Is it still money laundering now that the IRS has said that Bitcoin is property and not currency?
    - dragonwriter 13y ago
      > Is it still money laundering now that the IRS has said that Bitcoin is property and not currency? Since that was an interpretation of categories in tax law, which are completely different than those applicable to money laundering, the IRS determination on how bitcoin is taxes probably has no bearing on any analysis of how money laundering laws apply.
    - gamblor956 13y ago
      Yes. The IRS and FinCEN are sister agencies, so the pronouncements of one agency have little effect on the other. In this case, for IRS (i.e., tax) purposes, bitcoin is property. For FinCEN purposes, bitcoin is a "virtual currency" which results in many but not all of the same rules that apply to persons dealing in real currencies.
smallegan 13y ago
Does Starbucks have an API for creating gift cards and transferring balances?
- mhluongo 13y ago
  If so, I'd love to hear about it.
- emillon 13y ago
  It would be a big opportunity for money laundering, so I doubt it.
  - mike_hearn 13y ago
    Oh please. You cannot "launder money" with Starbucks gift cards unless you use a completely ridiculous definition of the term (which occasionally you find over-enthusiastic regulators doing, but that is no excuse).
    - fsckin 13y ago
      If someone buys Starbucks gift cards with dirty money, by selling the gift card at a discount, you get laundered money back. It's could be even more advantageous if you sell the gift cards for bitcoins, which can be sent anywhere in the world and anonymously exchanged for cash in nearly any currency/country through localbitcoins.
      - mike_hearn 13y ago
        That's not how money laundering works. Let's say you start out with drug money. You would like to get this money into the banking system so you can use it to buy a house. This is a standard money laundering problem. If you turn up at the bank with bags full of cash, the bank will ask where you got that money from, and lots of proof that it was legitimate. They will also file paperwork with the government stating that you made suspicious transactions, or they might just deny you entirely. Obviously, you can't say "I got this money selling drugs" so you need a plausible explanation - this is what money launderers do. So you take your drug money and buy lots of gift cards. Then you resell them at a discount. What you get back is .... cash (or bitcoins which are essentially digital cash). So the bank asks you the same questions. Your explanation is, "I got this money selling gift cards at a loss". This does not hold water, will not be accepted by the bank and thus does not solve your problem, or even take a step towards solving your problem.
amwelles 13y ago
The linked page says it takes 25 minutes to get your money back, but the FAQ says it takes only 15 minutes.
- mhluongo 13y ago
  Thanks! Those are both wrong. The barcode expires in 25 minutes, but you can hit "I'm done" for a quick refund. I'll fix that.
ForHackernews 13y ago
10% off in what denomination USD or BTC?
- chris-martin 13y ago
  Yes! (Both.) You'll end up spending an amount of BTC that is equivalent to 90% of the cost of your coffee. So, an example: If you choose the $10 option, and $10 is worth 10mBTC (exchange rate made up to simplify the math), then you'd pay 9mBTC and have $10 available to spend at Starbucks. If you then spend $5 of that at Starbucks, you'll end up receiving a refund of 4.5mBTC (the equivalent of the remaining $5).
  - mike_hearn 13y ago
    How is that discount funded though? I mean, who is paying the other 10%?
    - mhluongo 13y ago
      Right now? Us.
      - mike_hearn 13y ago
        OK. Thanks for cheap drinks, I guess, but what's in it for you? I mean, how long do you plan to keep this up?
        mhluongo 13y ago
        Hm... not sure how long we'll keep it up. The discount is a promotion, but I imagine we'll keep it in some form as marketing for the product. 10% is a nice number, but we'll test it. As pointed out in other comments, it beats Starbucks's own program, which I like. We can afford the discount by saving money elsewhere. No credit card fees, etc.
      - pbhjpbhj 13y ago
        So you put USD on Starbucks gift cards, sell the code to be used for a drink and receive the money in BTC. You're amassing BTC from disparate sources but it seems you'd be paying a slight premium, however you wouldn't need to register with any exchange. You do get a pre-loading bonus of bitcoins to play with and you can use those to generate profits - like 1000 people put $10 worth of BTC on the app, spend $5 on a coffee then you have $5000 in BTC to "play" with, eg to sell on. This does all look pretty suspect.
mmmmax 13y ago
You need to send an email with the barcode and 25 minutes after that sweep the funds back...I've tried to use this twice and not seen my code. Update: refreshing the page seems to help Update 2: I just used my code and it worked great! Nice work guys!
- mhluongo 13y ago
  Sorry for the trouble, and thanks for sticking with it!
blackjack48 13y ago
California (and some other states) allow you to cash out gift cards under $10. I've cashed out eCards at Starbucks before, so it may be possible to exchange residual BTC for cash.
JshWright 13y ago
If I use the Starbucks app, I get credit towards a free item (it works out to an 8.3% discount if you always buy the same thing). A 1.7% savings really isn't enough to interest me...
jsun 13y ago
I'd like to hear a real economist's take on this but from my personal opinion Bitcoin will never take off as a transactional currency because of it's inherently limited nature, and here's the reasons contributing to it: 1. There's a finite amount of them that can ever be mined 2. There's no central governing body control the rate of inflation/deflation through monetary policy. By definition this creates a deflationary currency. Meaning as a currency it gains value the more goods and services it can be redeemed for, and the more valuable it is the less likely it is that people will redeem it for goods or services. Meaning if all of a sudden more merchants started accepting bitcoin then bitcoins will appreciate as it's underlying "value" grows, but people will stop spending bitcoin because that coffee you bought for 3 bucks today might be 30 bucks next year. In turn merchants will spend less money building infrastructure for bitcoins since no one uses it. Does that make any sense?
- atmosx 13y ago
  I'm not an economist, but economists are not good at speculating either, looking at the results: As a a team, economists failed to preview every single financial crisis. Only after the shit hits the fan, media goes back to the few who were able to predict the crisis. There are always solitary birds singing out of the chorus. The chorus never get it right though. To your statements now: 1) That's true, but doesn't mean anything if you put it out of context and the context might very well change in a couple of years. Crypto-currencies are evolving now, new ones are created trying to tackle bitcoin's flaws. Now seems unlikely but in the future some might be more successful than bitcoin. It's a new sector. 2) There no central governing body, but an investor with a big amount of bitcoin (say 2% of the total) might easily drive the price up, down or side-ways. It's like a financial (assets) market really, a little bit of miss-information and a massive dump of bitcoins will turn the price down at once. It doesn't make any sense for a merchant to accept bitcoin if: 1) He is not the guy holding a huge bitcoin portofolio or plants too. Say Starbucks as a corporation starts accepting bitcoin today, in 6 month does a massive investment in the bitcoin market. If the investment is big enough the price will go up (supposedly). 2) If they have some inside information which allows them to predict with an acceptable risk the future price of bitcoin. Other than that - and I'd go for that theory - it doesn't make sense. It's just a marketing trick. They are not expecting big amounts, just very small amounts because as you said bitcoiners are basically short or long term hoarders. But I'm sure they are ready to absorb any bitcoin drop up to a point, but not further. So I'm positive they wouldn't accept 20% of their turn-over being on bitcoin (if they are not feeling suicidal).
robbiet480 13y ago
How does this work? Where/how are you generating the barcode? Is there some hidden Starbucks API?
- Joeboy 13y ago
  I don't know anything about this app or Starbucks, but barcodes are basically just graphical encodings of numbers, and there is free barcode generation code out there (eg. in python's Reportlab package). The numbers are purchased in bulk from the retailer.
  - sebastianavina 13y ago
    I hope they aren't serialized
pearjuice 13y ago
Major plus for your website to feature a Nexus instead of an iPhone. It instantly gives me a comfortable feeling of professionalism. I like the idea of the app and its well-executed. However, even if I would get a 100% discount I wouldn't take it. Starbucks equals common denominator hyped hipster coffee charged for at premium rates due to its viral-branding and A-locations. I would rather drink water from a sprinkler at a toilet-venue nearby than mix myself in the crowd which is hanging out at Starbucks and let the you-are-our-special-customer indoctrinated employees serve me a coffee. http://bad.coffee http://bad.coffee
- mhluongo 13y ago
  LOL. I'm not a Starbucks drinker either- I love the imagery. I definitely want to work with indie shops. It's a numbers game, though- I'll need shops that are interested to step forward and put in some extra effort for this to happen, because we do a lot better / get more people using bitcoin with larger merchants.
- mbillie1 13y ago
  I couldn't agree more. Not to mention, in virtually any reasonably sized metropolitan area there are generally plenty of places that simply make better tasting coffee.
  - mhluongo 13y ago
    Definitely. We're still figuring out how to address the smaller shops, since they have a variety of payment systems.
- shiftpgdn 13y ago
  Dude you might want to put the down the adderall.
- varkson 13y ago
  Why does having a Nexus in the picture = professionalism?
  - 13y ago
PhrosTT 13y ago
There's a Starbucks Gold Card (earned from 30 drinks in 12 months). https://www.starbucks.com/card/rewards https://www.starbucks.com/card/rewards This gives you every 13th drink free (1 per 12 = 8.3% discount). I think this just crowdsources 1 mega gold card. I guess if you average out the drink prices... I could use the free drink on the $6 soy latte and use the $2 tall coffee as 1 of 12 drinks to earn that. So I could squeeze out some extra % points that way. If they're really creative maybe it does geographical hedging as well, using the cheap drinks in Florida to earn free drinks in Manhattan (no idea if Starbucks prices fluctuate geographically.
- mey 13y ago
  They do fluctuate based on location, most (if not all) quick serve restaurants fluctuate their price based on location.
  - seizethecheese 13y ago
    Not just restaurants. All business prices vary to the extent that their labor, rent and other costs are geographically variable and dependent.
- mmanfrin 13y ago
  If they are using the same card, they are opening themselves up to a giant world of hurt from cheaters.
  - mhluongo 13y ago
    We aren't. EDIT: details Every users gets their own card to prevent tampering and crazy double-spend stuff.
- mhluongo 13y ago
  Interesting idea! We've got some clever stuff going on, but we definitely aren't taking advantage of geographic differences or the rewards program.
- dalore 13y ago
elwell 13y ago
6MB bg image is too big Edit: was too big (they fixed it)
- mhluongo 13y ago
  Haha, thanks! @chris-martin was like "I don't know images!" but then immediately took care of it.
nicolethenerd 13y ago
The big question... is this actually useable at Starbucks? If I show a barista a 3rd-party, non-Starbucks affiliated app, and ask them to scan it, will they do it? Or just look at me like I've grown 3 heads? Even if it is a valid barcode (and still not clear on where that's coming from either - I don't understand the 'crowdsourcing a gold card' thing - can someone explain?)
- ehPReth 13y ago
  They don't look at the app - they (or you) just point the scanner at the screen
- clp16 13y ago
  It works great. We've tested a bunch of times. The barista just points you at the scanner.
- mmmmax 13y ago
  I just did it...it was amazing! I'd prefer to keep a balance alive for longer.
  - mhluongo 13y ago
    How long would work, you think? I think today people are loading the BTC at the office, but I'm not sure that'll be the most common case. Maybe a "more time" button would help?
- csixty4 13y ago
  As long as it scans, they're happy. I saw someone pay with an image of their barcode on a smartwatch and the baristas were going nuts over how cool it was.
  - XaspR8d 13y ago
    Shucks. I successfully used my Pebble barcode at Starbucks the other day and was only met with confusion and mild surprise.
- 13y ago
crousto 13y ago
I'm sorry to digress, but... ...what's with the 6.3 MiB background image?!?!
- mhluongo 13y ago
  Haha sorry that landing page was a little hasty. Optimizing.
source99 13y ago
This is great. Why is there any limit to the amount of time I have to keep the "bitcoin/dollars" on the barcode? I'd rather load it up and use it when convinient.
- mhluongo 13y ago
  Mostly, I'm worried about trust. The thought was people might be worried that they paid their BTC for nothing. I'll chat with the guys about this, we definitely need to look into a better time solution. The other thing is- gift cards are all about vendor lock-in, and that's bullshit. Thus the focus on getting your money back in your pocket.
  - rch 13y ago
    It might be interesting to approximate how remainders work in Google Now: set a time or place to trigger a notification on a pending refund, and permit rescheduling within reason.
- rch 13y ago
  Actually, I think this model is a step forward for btc transactions in general. Getting the details worked out 'in the wild' like this should net them a compelling platform to build from down the road too.
joosters 13y ago
What exchange rate do you get for your bitcoin? Does a user even see the potential exchange rate before the transfer? What margin (if any) are you taking on the currency exchange? Why is the site so lacking in details?
- mhluongo 13y ago
  We use the current Coinbase exchange rate. No margin on the exchange. We're trying to keep it simple / focused on newer bitcoin users, but I can definitely flesh out the FAQ. The refund math is also in the user's favor- more about that in other comments.
  - joosters 13y ago
    Hey, thanks for the quick answers! Good luck with the site.
  - martindale 13y ago
    You should use BitPay's BBB (Bitcoin Best Bid) instead, it's looking at all a number of exchange order books and giving your the best price: https://bitpay.com/api/rates/usd https://bitpay.com/api/rates/usd Disclaimer: I work at BitPay.
    - mhluongo 13y ago
      Hey! Are you in the Atlanta office?
it_learnses 13y ago
I'm wondering what you have to gain out of promoting bitcoin so much. are you heavily invested in it?
- mhluongo 13y ago
  If by "heavily" you mean "bought a tiny bit after the January crash" then.. yes! People should be able to spend their money however they want. That's what we're excited about.
bcohen5055 13y ago
Any plans for branching this out on the retailer side? I can imagine any business that already has a gift card program in place and wants to impliment bitcoin payments would be interested in this.
- mhluongo 13y ago
  Yes. Many, many plans.
callesgg 13y ago
I assume one has to wait something like 10 minutes to stop double spending. I want coffee now not in 10 minutes.
- clp16 13y ago
  If you need your money back just hit the refund button and if you need to buy something else, you can load more money on to the app. No need to wait.
- mhluongo 13y ago
  To be clear, you don't have to wait 10 minutes- we've just had issues with the websocket stuff. Refreshing the page works if that doesn't. Unless something broke, you can pay and get a card in under 3 minutes.
stevewilhelm 13y ago
The volatility of Bitcoin's exchange rate far out ways the ten percent discount.
josu 13y ago
Can you use this service in Mexico or Canada? It doesn't seem to be covered anywhere, or maybe I haven't looked hard enough.
- clp16 13y ago
  Unfortunately we are US only at the moment, but we hope to be able to serve outside the states soon.
  - xrjn 13y ago
    Is this a concept that can be eventually used with other outlets, such as supermarket chains, or any other reasonably popular services that uses gift cards? Or am I missing something that is specific to Starbucks?
    - clp16 13y ago
      Those are some really good ideas. Starbucks was good for us for a bunch of reasons, and also hopefully there are people in the bitcoin community who like their daily Starbucks. Edit - sentence structure
beedogs 13y ago
At this point with btc volatility being what it is today, you could save or lose 10% just by standing in line.
FredEE 13y ago
https://coinforcoffee.com/#how-it-works https://coinforcoffee.com/#how-it-works This design looks strangely familiar... :)
- mhluongo 13y ago
  Ha, we tweaked it a bit since last time you guys saw it, but not much.
c23gooey 13y ago
Im interested in exactly how you are handling refunds. Can you describe it for us?
- mhluongo 13y ago
  Sure. @chris-martin explained the math in another comment, so I imagine you're wondering how we do refunds in bitcoin? The only easy / customer-friendly way we could see to do that was to request an email address, and send that email bitcoin via Coinbase. We didn't think BIPS-70 or any other solutions would work for this, since most people aren't familiar, and the whole purpose of the refund is to cement trust.
facepalm 13y ago
US only I assume?
- mhluongo 13y ago
  It might work outside the States? But the question really is "will US gift cards work" wherever you are. We've got someone testing in Japan who says he'll report back.
burritofanatic 13y ago
Wait a second. Is this the same business that was suspended while they were figuring out legal issues? Anyone know what I'm talking about?
- mhluongo 13y ago
  Yep, check out the other comments.

169 points by mhluongo 13y ago

Xdes 13y ago

Really excited about the new sidechains concept. Can't wait for the first attempt.

untilHellbanned 13y ago
what's that?
- Xdes 13y ago
  The ability to denominate cryptocurrencies in other cryptocurrencies. It's similar to having the dollar back by gold. http://www.cryptocoinsnews.com/news/adam-back-sidechains-can-replace-altcoins-bitcoin-2-0-platforms/2014/04/10 http://www.cryptocoinsnews.com/news/adam-back-sidechains-can...

Xdes 13y ago

Also about the service: is the website compliant with AML and KYC regulation? You might be acting as a money transmitter under FinCEN rules. Might want to consult a lawyer.

mhluongo 13y ago
This time, I definitely consulted a lawyer.

myrandomcomment 13y ago

Could we please bring this to a coffee chain that makes good coffee? Peets or Philz?

mhluongo 13y ago
Yes we can- and we are. We started with Starbucks for a number of reasons, but I can't wait to get Peets in there. Hell, I'd really love to get some good indie shops- but we've gotta start somewhere.
- myrandomcomment 13y ago
  Great to hear. Thank you! I love how my real question which received and answer from the company was voted down. Sorry but Starbucks is not really good coffee. I am writing this from the Philz in Palo Alto :)
  - JshWright 13y ago
    Because you're wrong. Starbucks certainly makes 'good' coffee. Can you make better coffee? Absolutely. I'm enough of a coffee snob that I rarely get coffee while I'm out, preferring to make it at home where I can control all the variables. That being said... claiming that Starbucks isn't 'good' coffee is just hipster silliness... Yes, I realize it's mainstream now, and your fedora fits in better at Philz, but Starbucks coffee is certainly 'good' enough for millions of people every day, and it seems like an obvious first choice for an application like this.
    - myrandomcomment 13y ago
      42, not a hipster, no Fedora (well I have a VM running it). I like my coffee in the morning, french press at home (Peet's Garuda). Peet's if I am out and about and once in a great while when I get a chance I love to make it to Philz. I have disliked Starbucks coffee before it was cool thank you very much :) The comment about Starbuck was a bit tongue-in-cheek, but I guess I can see it being taken as Hipster fashion.
      - listic 13y ago
        Hey, can I have some of that nice coffee you're having? I live in Russia. I can send you some of Art. Lebedev's (don't know if it's any good, but they roast their own mix, so you can compare) I can PayPal you the money and you'll ship me the coffee. You can ship to my US-based P.O. box. I run Ubuntu on my laptop and CentOS on KVM CentOS VM on a server. Please drop me a line via email (in profile) or any other means (Facebook et el.) http://about.com/nleschov http://about.com/nleschov
mattgreenrocks 13y ago
Side comment: how's does Peets fare for espresso-based drinks?

mhluongo 13y ago

Hey guys! You might remember our last app, Card for Coin, where we were buying Starbucks for bitcoin. Well, here's the other side- we're looking forward to your feedback. The websocket stuff is a little touch and go, so please let me know if you have issues. Let me know if anyone has an issue loading a card or getting a refund, and I'll work it out.

hrayr 13y ago
Did you, and if so, how did you address the legal issues brought up in your previous post? https://news.ycombinator.com/item?id=7157180 https://news.ycombinator.com/item?id=7157180
- mhluongo 13y ago
  I've got a firm working on the issue right now. We're seeking clarification from FinCen and keeping that side closed until we know their stance.
- molsongolden 13y ago
  Is it still money laundering now that the IRS has said that Bitcoin is property and not currency?
  - dragonwriter 13y ago
    > Is it still money laundering now that the IRS has said that Bitcoin is property and not currency? Since that was an interpretation of categories in tax law, which are completely different than those applicable to money laundering, the IRS determination on how bitcoin is taxes probably has no bearing on any analysis of how money laundering laws apply.
  - gamblor956 13y ago
    Yes. The IRS and FinCEN are sister agencies, so the pronouncements of one agency have little effect on the other. In this case, for IRS (i.e., tax) purposes, bitcoin is property. For FinCEN purposes, bitcoin is a "virtual currency" which results in many but not all of the same rules that apply to persons dealing in real currencies.

smallegan 13y ago

Does Starbucks have an API for creating gift cards and transferring balances?

mhluongo 13y ago
If so, I'd love to hear about it.
emillon 13y ago
It would be a big opportunity for money laundering, so I doubt it.
- mike_hearn 13y ago
  Oh please. You cannot "launder money" with Starbucks gift cards unless you use a completely ridiculous definition of the term (which occasionally you find over-enthusiastic regulators doing, but that is no excuse).
  - fsckin 13y ago
    If someone buys Starbucks gift cards with dirty money, by selling the gift card at a discount, you get laundered money back. It's could be even more advantageous if you sell the gift cards for bitcoins, which can be sent anywhere in the world and anonymously exchanged for cash in nearly any currency/country through localbitcoins.
    - mike_hearn 13y ago
      That's not how money laundering works. Let's say you start out with drug money. You would like to get this money into the banking system so you can use it to buy a house. This is a standard money laundering problem. If you turn up at the bank with bags full of cash, the bank will ask where you got that money from, and lots of proof that it was legitimate. They will also file paperwork with the government stating that you made suspicious transactions, or they might just deny you entirely. Obviously, you can't say "I got this money selling drugs" so you need a plausible explanation - this is what money launderers do. So you take your drug money and buy lots of gift cards. Then you resell them at a discount. What you get back is .... cash (or bitcoins which are essentially digital cash). So the bank asks you the same questions. Your explanation is, "I got this money selling gift cards at a loss". This does not hold water, will not be accepted by the bank and thus does not solve your problem, or even take a step towards solving your problem.

amwelles 13y ago

The linked page says it takes 25 minutes to get your money back, but the FAQ says it takes only 15 minutes.

mhluongo 13y ago
Thanks! Those are both wrong. The barcode expires in 25 minutes, but you can hit "I'm done" for a quick refund. I'll fix that.

ForHackernews 13y ago

10% off in what denomination USD or BTC?

chris-martin 13y ago
Yes! (Both.) You'll end up spending an amount of BTC that is equivalent to 90% of the cost of your coffee. So, an example: If you choose the $10 option, and $10 is worth 10mBTC (exchange rate made up to simplify the math), then you'd pay 9mBTC and have $10 available to spend at Starbucks. If you then spend $5 of that at Starbucks, you'll end up receiving a refund of 4.5mBTC (the equivalent of the remaining $5).
- mike_hearn 13y ago
  How is that discount funded though? I mean, who is paying the other 10%?
  - mhluongo 13y ago
    Right now? Us.
    - mike_hearn 13y ago
      OK. Thanks for cheap drinks, I guess, but what's in it for you? I mean, how long do you plan to keep this up?
      - mhluongo 13y ago
        Hm... not sure how long we'll keep it up. The discount is a promotion, but I imagine we'll keep it in some form as marketing for the product. 10% is a nice number, but we'll test it. As pointed out in other comments, it beats Starbucks's own program, which I like. We can afford the discount by saving money elsewhere. No credit card fees, etc.
    - pbhjpbhj 13y ago
      So you put USD on Starbucks gift cards, sell the code to be used for a drink and receive the money in BTC. You're amassing BTC from disparate sources but it seems you'd be paying a slight premium, however you wouldn't need to register with any exchange. You do get a pre-loading bonus of bitcoins to play with and you can use those to generate profits - like 1000 people put $10 worth of BTC on the app, spend $5 on a coffee then you have $5000 in BTC to "play" with, eg to sell on. This does all look pretty suspect.

mmmmax 13y ago

You need to send an email with the barcode and 25 minutes after that sweep the funds back...I've tried to use this twice and not seen my code. Update: refreshing the page seems to help Update 2: I just used my code and it worked great! Nice work guys!

mhluongo 13y ago
Sorry for the trouble, and thanks for sticking with it!

blackjack48 13y ago

California (and some other states) allow you to cash out gift cards under $10. I've cashed out eCards at Starbucks before, so it may be possible to exchange residual BTC for cash.

JshWright 13y ago

If I use the Starbucks app, I get credit towards a free item (it works out to an 8.3% discount if you always buy the same thing). A 1.7% savings really isn't enough to interest me...

jsun 13y ago

I'd like to hear a real economist's take on this but from my personal opinion Bitcoin will never take off as a transactional currency because of it's inherently limited nature, and here's the reasons contributing to it: 1. There's a finite amount of them that can ever be mined 2. There's no central governing body control the rate of inflation/deflation through monetary policy. By definition this creates a deflationary currency. Meaning as a currency it gains value the more goods and services it can be redeemed for, and the more valuable it is the less likely it is that people will redeem it for goods or services. Meaning if all of a sudden more merchants started accepting bitcoin then bitcoins will appreciate as it's underlying "value" grows, but people will stop spending bitcoin because that coffee you bought for 3 bucks today might be 30 bucks next year. In turn merchants will spend less money building infrastructure for bitcoins since no one uses it. Does that make any sense?

atmosx 13y ago
I'm not an economist, but economists are not good at speculating either, looking at the results: As a a team, economists failed to preview every single financial crisis. Only after the shit hits the fan, media goes back to the few who were able to predict the crisis. There are always solitary birds singing out of the chorus. The chorus never get it right though. To your statements now: 1) That's true, but doesn't mean anything if you put it out of context and the context might very well change in a couple of years. Crypto-currencies are evolving now, new ones are created trying to tackle bitcoin's flaws. Now seems unlikely but in the future some might be more successful than bitcoin. It's a new sector. 2) There no central governing body, but an investor with a big amount of bitcoin (say 2% of the total) might easily drive the price up, down or side-ways. It's like a financial (assets) market really, a little bit of miss-information and a massive dump of bitcoins will turn the price down at once. It doesn't make any sense for a merchant to accept bitcoin if: 1) He is not the guy holding a huge bitcoin portofolio or plants too. Say Starbucks as a corporation starts accepting bitcoin today, in 6 month does a massive investment in the bitcoin market. If the investment is big enough the price will go up (supposedly). 2) If they have some inside information which allows them to predict with an acceptable risk the future price of bitcoin. Other than that - and I'd go for that theory - it doesn't make sense. It's just a marketing trick. They are not expecting big amounts, just very small amounts because as you said bitcoiners are basically short or long term hoarders. But I'm sure they are ready to absorb any bitcoin drop up to a point, but not further. So I'm positive they wouldn't accept 20% of their turn-over being on bitcoin (if they are not feeling suicidal).

robbiet480 13y ago

How does this work? Where/how are you generating the barcode? Is there some hidden Starbucks API?

Joeboy 13y ago
I don't know anything about this app or Starbucks, but barcodes are basically just graphical encodings of numbers, and there is free barcode generation code out there (eg. in python's Reportlab package). The numbers are purchased in bulk from the retailer.
- sebastianavina 13y ago
  I hope they aren't serialized

pearjuice 13y ago

Major plus for your website to feature a Nexus instead of an iPhone. It instantly gives me a comfortable feeling of professionalism. I like the idea of the app and its well-executed. However, even if I would get a 100% discount I wouldn't take it. Starbucks equals common denominator hyped hipster coffee charged for at premium rates due to its viral-branding and A-locations. I would rather drink water from a sprinkler at a toilet-venue nearby than mix myself in the crowd which is hanging out at Starbucks and let the you-are-our-special-customer indoctrinated employees serve me a coffee. http://bad.coffee http://bad.coffee

mhluongo 13y ago
LOL. I'm not a Starbucks drinker either- I love the imagery. I definitely want to work with indie shops. It's a numbers game, though- I'll need shops that are interested to step forward and put in some extra effort for this to happen, because we do a lot better / get more people using bitcoin with larger merchants.
mbillie1 13y ago
I couldn't agree more. Not to mention, in virtually any reasonably sized metropolitan area there are generally plenty of places that simply make better tasting coffee.
- mhluongo 13y ago
  Definitely. We're still figuring out how to address the smaller shops, since they have a variety of payment systems.
shiftpgdn 13y ago
Dude you might want to put the down the adderall.
varkson 13y ago
Why does having a Nexus in the picture = professionalism?
- 13y ago

PhrosTT 13y ago

There's a Starbucks Gold Card (earned from 30 drinks in 12 months). https://www.starbucks.com/card/rewards https://www.starbucks.com/card/rewards This gives you every 13th drink free (1 per 12 = 8.3% discount). I think this just crowdsources 1 mega gold card. I guess if you average out the drink prices... I could use the free drink on the $6 soy latte and use the $2 tall coffee as 1 of 12 drinks to earn that. So I could squeeze out some extra % points that way. If they're really creative maybe it does geographical hedging as well, using the cheap drinks in Florida to earn free drinks in Manhattan (no idea if Starbucks prices fluctuate geographically.

mey 13y ago
They do fluctuate based on location, most (if not all) quick serve restaurants fluctuate their price based on location.
- seizethecheese 13y ago
  Not just restaurants. All business prices vary to the extent that their labor, rent and other costs are geographically variable and dependent.
mmanfrin 13y ago
If they are using the same card, they are opening themselves up to a giant world of hurt from cheaters.
- mhluongo 13y ago
  We aren't. EDIT: details Every users gets their own card to prevent tampering and crazy double-spend stuff.
mhluongo 13y ago
Interesting idea! We've got some clever stuff going on, but we definitely aren't taking advantage of geographic differences or the rewards program.
dalore 13y ago

elwell 13y ago

6MB bg image is too big Edit: was too big (they fixed it)

mhluongo 13y ago
Haha, thanks! @chris-martin was like "I don't know images!" but then immediately took care of it.

nicolethenerd 13y ago

The big question... is this actually useable at Starbucks? If I show a barista a 3rd-party, non-Starbucks affiliated app, and ask them to scan it, will they do it? Or just look at me like I've grown 3 heads? Even if it is a valid barcode (and still not clear on where that's coming from either - I don't understand the 'crowdsourcing a gold card' thing - can someone explain?)

ehPReth 13y ago
They don't look at the app - they (or you) just point the scanner at the screen
clp16 13y ago
It works great. We've tested a bunch of times. The barista just points you at the scanner.
mmmmax 13y ago
I just did it...it was amazing! I'd prefer to keep a balance alive for longer.
- mhluongo 13y ago
  How long would work, you think? I think today people are loading the BTC at the office, but I'm not sure that'll be the most common case. Maybe a "more time" button would help?
csixty4 13y ago
As long as it scans, they're happy. I saw someone pay with an image of their barcode on a smartwatch and the baristas were going nuts over how cool it was.
- XaspR8d 13y ago
  Shucks. I successfully used my Pebble barcode at Starbucks the other day and was only met with confusion and mild surprise.
13y ago

crousto 13y ago

I'm sorry to digress, but... ...what's with the 6.3 MiB background image?!?!

mhluongo 13y ago
Haha sorry that landing page was a little hasty. Optimizing.

source99 13y ago

This is great. Why is there any limit to the amount of time I have to keep the "bitcoin/dollars" on the barcode? I'd rather load it up and use it when convinient.

mhluongo 13y ago
Mostly, I'm worried about trust. The thought was people might be worried that they paid their BTC for nothing. I'll chat with the guys about this, we definitely need to look into a better time solution. The other thing is- gift cards are all about vendor lock-in, and that's bullshit. Thus the focus on getting your money back in your pocket.
- rch 13y ago
  It might be interesting to approximate how remainders work in Google Now: set a time or place to trigger a notification on a pending refund, and permit rescheduling within reason.
rch 13y ago
Actually, I think this model is a step forward for btc transactions in general. Getting the details worked out 'in the wild' like this should net them a compelling platform to build from down the road too.

joosters 13y ago

What exchange rate do you get for your bitcoin? Does a user even see the potential exchange rate before the transfer? What margin (if any) are you taking on the currency exchange? Why is the site so lacking in details?

mhluongo 13y ago
We use the current Coinbase exchange rate. No margin on the exchange. We're trying to keep it simple / focused on newer bitcoin users, but I can definitely flesh out the FAQ. The refund math is also in the user's favor- more about that in other comments.
- joosters 13y ago
  Hey, thanks for the quick answers! Good luck with the site.
- martindale 13y ago
  You should use BitPay's BBB (Bitcoin Best Bid) instead, it's looking at all a number of exchange order books and giving your the best price: https://bitpay.com/api/rates/usd https://bitpay.com/api/rates/usd Disclaimer: I work at BitPay.
  - mhluongo 13y ago
    Hey! Are you in the Atlanta office?

it_learnses 13y ago

I'm wondering what you have to gain out of promoting bitcoin so much. are you heavily invested in it?

mhluongo 13y ago
If by "heavily" you mean "bought a tiny bit after the January crash" then.. yes! People should be able to spend their money however they want. That's what we're excited about.

bcohen5055 13y ago

Any plans for branching this out on the retailer side? I can imagine any business that already has a gift card program in place and wants to impliment bitcoin payments would be interested in this.

mhluongo 13y ago
Yes. Many, many plans.

callesgg 13y ago

I assume one has to wait something like 10 minutes to stop double spending. I want coffee now not in 10 minutes.

clp16 13y ago
If you need your money back just hit the refund button and if you need to buy something else, you can load more money on to the app. No need to wait.
mhluongo 13y ago
To be clear, you don't have to wait 10 minutes- we've just had issues with the websocket stuff. Refreshing the page works if that doesn't. Unless something broke, you can pay and get a card in under 3 minutes.

stevewilhelm 13y ago

The volatility of Bitcoin's exchange rate far out ways the ten percent discount.

josu 13y ago

Can you use this service in Mexico or Canada? It doesn't seem to be covered anywhere, or maybe I haven't looked hard enough.

clp16 13y ago
Unfortunately we are US only at the moment, but we hope to be able to serve outside the states soon.
- xrjn 13y ago
  Is this a concept that can be eventually used with other outlets, such as supermarket chains, or any other reasonably popular services that uses gift cards? Or am I missing something that is specific to Starbucks?
  - clp16 13y ago
    Those are some really good ideas. Starbucks was good for us for a bunch of reasons, and also hopefully there are people in the bitcoin community who like their daily Starbucks. Edit - sentence structure

beedogs 13y ago

At this point with btc volatility being what it is today, you could save or lose 10% just by standing in line.

FredEE 13y ago

https://coinforcoffee.com/#how-it-works https://coinforcoffee.com/#how-it-works This design looks strangely familiar... :)

mhluongo 13y ago
Ha, we tweaked it a bit since last time you guys saw it, but not much.

c23gooey 13y ago

Im interested in exactly how you are handling refunds. Can you describe it for us?

mhluongo 13y ago
Sure. @chris-martin explained the math in another comment, so I imagine you're wondering how we do refunds in bitcoin? The only easy / customer-friendly way we could see to do that was to request an email address, and send that email bitcoin via Coinbase. We didn't think BIPS-70 or any other solutions would work for this, since most people aren't familiar, and the whole purpose of the refund is to cement trust.

facepalm 13y ago

US only I assume?

mhluongo 13y ago
It might work outside the States? But the question really is "will US gift cards work" wherever you are. We've got someone testing in Japan who says he'll report back.

burritofanatic 13y ago

Wait a second. Is this the same business that was suspended while they were figuring out legal issues? Anyone know what I'm talking about?

mhluongo 13y ago
Yep, check out the other comments.