“Unlocking the Mystery: Exploring the Realm of Physical Bitcoins — Myth or Reality?”
Even in this digital age where most data is secured in faraway servers and virtual accounts all across the world, many people still see value in storing precious assets in a locker, safe or vault. Take for example, a case in point Gold (I bet Peter Schiff would love this argument). Most people see it as a precious metal and thus store them in vaults in banks for safe keeping. To any human, it definitely feels good to see that which you own; creating some sense of security and satisfaction I guess. Several individuals, still till date, since the inception of Bitcoin back in 2009, have shunned the idea of digital currency because they can’t procure it physically like they would with traditional fiat.
Thus with the digital currency amassing recognition and power within the current world regime, pops up the mind-boggling question, are there any physical bitcoins? And if so, do they have any value as their digital counterparts?
How are these physical bitcoins created?
Most people who create physical bitcoins use a 3-D printer. The design itself varies as they are created by enthusiasts, not a centralized organization. Some are metal-plated, and some use pure silver or gold.
On the surface, physical bitcoins are similar to their fiat counterparts. They are usually made from metals like silver or even gold, as they are the most ones circulating within the internet. They contain the Bitcoin logo printed on one side and their “value”on the other. However, the similarities between the two ends here.
While centralized fiat coins have a specific value, the value of a physical actual bitcoin comes from a private key printed on its back, you could say the tails of the coin. This private key holds the coin’s actual value in a digital wallet — it could be 1 BTC or 100 BTC, depending on the maker/hodler of the coin. Holders can use this key to redeem the BTC online.
You can think of physical bitcoins as a bank card. The bank card itself does not have any value. Rather, the magnetic strip on the front of the card is what gives you access to the real currency. Similarly, when it comes to physical bitcoins, it is not the coin that matters so much, but the private key mentioned on the back that’s important.
Also, each coin has its individual private key. Therefore, even if someone steals or tampers with it, they will only be able to access the BTC in that specific coin. On the other hand, if this were a digital wallet, the entity would have access to all the cryptocurrency stored within it.
To further mitigate tampering, the private key is stored in a holographic sticker on the back of the coin. When the sticker is peeled, it leaves an identifiable mark. If there is a mark on your coin, you will know it was tampered with.
The first physical bitcoin
Physical representations of Bitcoin have existed for a long time now. Over the years, several different renditions have also cropped-up, each with different compositional material, values, and purposes. However, it all started with the Casascious coin, created by Mike Caldwell in 2011.
Caldwell minted a range of physical coins. He began with 0.5 and 1 BTC brass coins and even expanded to a 1,000 BTC gold-plated bar. By 2013, Caldwell had minted roughly 27,000 coins. However, he had to suspend his operation due to restrictions from the Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department.
They informed him that minting physical bitcoins would qualify him as a money transmitter. Thus, he would have to register at a federal level if he wanted to continue selling the coins.
What are the physical bitcoins worth?
The answer to this question seems relatively simple — a physical bitcoin is worth the amount of BTC held in its private key. Another factor for a physical Bitcoin’s worth is the material used to create the coin. As discussed above, these coins are made from various materials. They could be metal-plated, made from gold or silver, or even plastic. The coin’s price will increase if the material it was made from is expensive. For example, a coin made from gold will be more costly than a coin that uses metal plating.
Collectability also plays a significant factor. These coins are rare and unique due to the materials used, the logo printed and their limited supply. A coin that was minted a long time ago will be a rare collectable, especially if only a few others like it exist. As such, its value will be independent of the value of bitcoins stored in the private key. People would want to buy it because of its rarity, similar to movie posters or fiat coins that are no longer in circulation.”
Are the physical bitcoins worth it?
Let’s have a quick dive in through the advantages and disadvantages of owning these physical bitcoins.
Advantages
· They provide a tangible representation of your digital assets, giving you a sense of ownership and security.
· They can be used as a collector’s item or gift, adding value beyond their face value making them attractive to collectors and enthusiasts.
Disadvantages
· They can be easily lost or stolen, and if you lose the private key or damage the physical coin, you may lose access to your digital assets.
· Physical bitcoins are not as easily divisible or transferable as their digital counterparts, which can limit their utility in certain situations.
· Physical bitcoins can be less convenient to use compared to digital wallets, as they require physical handling and are not as easily transferable.
Based on the given facts, the merits and demerits would you like to be in possession of a physical bitcoin? Lemme know, down below, in the comments.
