That's the correct item.

When you order those, you'll get a printed disc with the firstbit public key printed on one side and the private key on the obverse, in addition to round gold stickers to secure them against the coin. The small disc is placed against the coin (there's a circular impression that makes it easy to do so), and the supplied gold sticker is attached on top of that, forming a covering layer. It works just like the hologram in that you peel the sticker off to gain access to the private key, only you can't see the public address through the sticker.

You would use the public address to load Bitcoin value before applying the sticker, of course. Then it's a nice piece to give as a gift, although the hologram definitely makes a bigger impact.

There are other sketchy businesses called RBS, and NatWest, and Banque Postale, and Societe Generale... I lost count. People can't get their fiat there either...

As far as BFL's ASICS - I'll believe it when I see it, just like it was with their FPGAs. Initial stumbles can be forgiven if they really do produce a quality piece of hardware, then follow up with support and community involvement. If not, there are other ASIC projects.

The 7970 crowd sourcing went pretty well, and that was for a $500+ component. A 3.5 Gh/s BFL Jalapeno is only $187 including international shipping...

You could set up an address, and when it gets to 30 BTC, order a unit.

I must've been 'lucky' to have called that three days in advance.


No amount of luck can prevent reality from crashing back down on your illusion; it's only a matter of time.


Hard to make a definitive choice between the two; cost theory seems more rigid, but they could both be applied with similar results. I think it might make more sense to apply cost theory to paper gold (when it was directly tied to actual gold in fixed ratio certificate form) because that has to take into account the underlying asset it lays claim to, even though the actual cost to product a paper claim certificate is marginal.


Yup. I think the confusion is two-fold: missing the fact that gold is a currency and the paper representation of gold is not the same as physical gold.



Paper gold used to be a direct 1:1 claim on physical gold. That convertibility alone is what lent credibility to the paper. This is why the production cost, leaning more toward cost theory, is almost the entire valuation. The paper itself may be worth almost nothing, but what it represents is very valuable - and that representation is the entire valuation.

Once convertibility is severed, as it was in a sense during 1933 and again in finality after 1971, the value of the paper depends entirely on what people think it's worth. After having been psychologically conditioned to recognize the dollar being "as good as gold", it is very difficult to grasp the change that becomes "instead of gold".

A visual example, and the play-by-play:

• 0:00-0:05; going great
• 0:05-0:10; run away from deflation
• 0:10-0:13; going great
• 0:13; separate from gold
• 0:18; realize the danger
• 0:21-0:30; hit crisis and collapse
• 0:35 onward, pursue Keynesian/MMT policies

And when they do, their real assets don't disappear like paper. They'll be acquired and capitalized on by stronger companies. The difference here is that returns won't be as high. Royalty companies (RGLD, SLW, TRX, etc) may be the best option.

Pay attention to the bolded sections. Keep your 24 ounces. You'll thank me later.


So you say.

'Rational' does not guarantee 'informed'. If someone were to start trading today without understanding how the financial system works at all, what is rational for that person would likely be naively irrational to an experienced trader. It's the same concern with insider information, wherein the rational decision made by those with said information is different from actions pursued by those without the information.

What's different here is that the insider information has been played on for so long that clues about it have 'leaked' out over the years, allowing for extensive investigation to reproduce the framework of that information. Filling in the details is a simple matter from that point.

I hope this visual helps with further explanation below.



The relational values are my educated guess as to how each of several different types of value apply to each of the assets presented. Subjective is obviously from the subjective theory of value, just as intrinsic infers the intrinsic theory of value. Production value is the input cost, or the labor theory of value.

Producing a dollar requires almost no effort, and the more produced, the lower the overall cost. This is especially true when considering what it is used for. Its intrinsic value is negligible at best, being mere fabric and ink. The value is almost entirely subjective.

Gold has a much greater production cost, making its initial market price alone much higher. If its minor intrinsic value for use in industry and research were the only determinant, the total value would be much less. Speculation rests mostly in the subjective value region (also when ratio shifts occur), which is not very big in comparison to the sheer cost to produce it. This is why large price swings can't do much to keep the exchange value low. It is also why, no matter how much naked shorting pressure is exerted, it will always have value. This is particularly important as gold regains a greater monetary role.

* Paper gold is equivalent to the dollar: negligible production cost and intrinsic value resulting in purely subjective value, easily dominated by speculation. It is not gold.

Bitcoin is interesting, because any of its purely abstract, mathematical units basically has zero intrinsic value. The production cost includes the hardware and energy required to secure the blockchain, and that maybe amounts to half of the current market rate if considering GPUs only. That probably drops to as little as 10-20% when including FPGAs. All that's really left after hardware and energy input is subjective, involving speculation and practical usage demand.

None of these valuations take into account supporting infrastructure outside of creating the initial availability for each unit. That would change the ratios, in some situations drastically. For instance, the USD requires expansive and pervasive infrastructure both to secure and manage its units. Gold doesn't need much infrastructure at all, since each unit of gold can generally be judged by appearances. Bitcoin infrastructure lies somewhere in between, needing more active components than gold, but being much less expensive than that necessary for the USD.

The absolute values in terms of different units (XAU, USD, BTC) shows a different picture, one that is incapable of delineating the separation between the above types of value.



When calculating 'price', the denominational unit simply acts as the proxy between whatever items are being exchanged. Therefore, a medium of exchange is virtually inconsequential except to provide a reference point. I could compare the price of dollars to the price of gold in terms of bitcoins, or the price of corn to the price of bonds in terms of gold. The absolute value cannot break down the types of value combined within an item.

Some traders and investors seem to have an instinctual understanding of these concepts, but I have yet to come across any texts which explicitly outline the interplay between different types of value.

How's this: 1 troy ounce of gold is worth 1 troy ounce of gold. Value needs to be measured in a consistent medium. The USD is not remotely consistent. Transparency is critical as well, and gold is far more transparent than paper, except when obscured by that paper.

Gold is only volatile in terms of fiat. It is stable within a consistent range relative to real assets. The problem is in the financial system, not gold and real assets.

If I were to take a loan, I would buy at the best bargain I could obtain. You aren't offering that.

Historical volatility extremes are indicative of either accelerating growth or failure. Either gold or the financial system are failing, not both. Look around at the banking crises (plural) and tell me it's gold that's failing.

Playing the paper game doesn't require any more luck than card counting at a casino. It's knowing when the casino can't pay out that's important. I'd rather be early than lucky - you can try to catch the last corner.

Maybe you forgot that I don't advocate trading in traditional markets for that reason. As soon as a breakout begins, the weight of the entire financial system is brought to bear on real assets. Financial paper "assets" drown perceived value until we arrive at sentiment like there is now. Last September, gold related assets were a reasonable bargain. Now, they're being thrown away.

The paper depiction of value in regard to real assets does not describe their actual worth. You might as well tell me that a 70kg adult male only needs 1ml of water and 5g of rice per day. Try to do that in reality and he'll die within a fortnight. Dumping gold and related shares at current valuation is like giving away Bentleys because you don't like the style.

Keep playing the paper game. You can move your legs as fast as you can, and it might een seem like you're getting somewhere, but you're still standing in quicksand.

I don't have to worry - I'm not mistaken. It's simple: paper gold can go to zero, but physical gold cannot. The same applies to all real assets.

Anecdotes do not change the fundamentals. No amount of 'crying ladies' paraded as intentional misinformation can either. With their lack of understanding that their 'losses' are unrealized, and often accompanied by a confusion about why the investment was undertaken in the first place if it was even entered for the right reasons, people sadly succumb to their own ignorance of the financial system.

It's amusing to hear people saying that gold holders will become millionaires when that status is relative - sure, you might become a millionaire, but a millionaire in 2020 who lives the same as an average middle class wage earner of ~$50,000 in 2010 is not necessarily someone who is financially 'rich'. It's simply someone who hasn't had to chase corners and trade their way to maintaining the same lifestyle he has now.

You can earn all you want in paper, but when the time comes to revalue assets, paper will be drawing the short straw. It's the same thing as being in the wrong asset when the Russel index is rebalanced every year. All of your gains could easily amount to the equivalent of treading water, or drowning.

It has to be said again:

That trend has been repeatedly rebuffed and also shows signs of slowing into a reversal.


Noted. Since you stated with an or, I assume that a collapsing Dow and rising gold would meet that measure.

The bears are still expecting people to stop eating, and machinery to run on air.

Mission accomplished!

I ordered recently, partly because I think they're collectible, and partly for the novelty. Have to say, the service was excellent!

People have been asking me about Bitcoin recently, so it helps to make an impact when there's a tangible item. Military personnel especially seem to appreciate a real object, and tend to quickly grasp that it's a representation of value.

They're also great for birthday gifts, tips for cute waitresses (h/t Mike), and as conversation pieces, especially because of the recurring theme of financial panic seemingly without any real solutions. For some people, after discussing the concept, there is an understanding that Bitcoin could be a genuine solution instead of more lip service. I've presented coins at a number of meetups, and always wind up the popular guy after that for some reason. Must be my dashing good looks.

With that said, I ran out way too quickly. Time to order more...

Glad it helped

Those three aspects of the mining dynamic are about as core as it gets. It may not help with figuring out the demand side, but the supply and resulting price floor can be estimated fairly well.


Yes, I kind of glossed over that. I tend to consider initial outlay to be part of the cost of producing each Bitcoin, so an amortized value included in that cost. Most businesses do this as a normal practice, but I think because Bitcoin mining is so exclusively dependent upon and recoups hardware investment so wildly fast that there's a good deal more emphasis on that than energy input.

From a purely economic view, it's pretty clear in blockchain.info charts how the mining operations that were either unprofitable would've closed up shop in the latter half of 2011. That's not taking psychological factors into consideration, which I'm sure played a hefty part.

I also didn't go into 'free' energy input, since that isn't realistically viable long-term and the larger operations will be forced to source power at some point. Renewable, independent power production is another amortizable cost.


Spot on. Once the interrelated components are separated out, it becomes easier to see how they affect the whole. Running a mining operation helps

Was the SR-71 able to pursue its mission of being a spy craft to keep tabs on every inch of the planet, or just select areas?

Will a quantum computer today be able to crack every existing key in the blockchain, or just a targeted subset?

That's even better! Let's get them to do it

In a few years, you'll be riding high with Bitcoin, but have completely missed the greatest part of the PM bull.


Another view is that all of the efforts to have more will lead to even greater resource consumption to fight and kill each other for control of those resources. War generally consumes resources and makes them harder to recover. How much more will that amplify consumption?

If an asset is at a discount no matter the price to this point, it doesn't matter what the entry point is. The danger in fleeing now is that the systemic stresses are so great that there's no real way to determine when a break will occur, but there's no doubt that it will happen violently. Because of that, it might not be possible to get in again at any price, so short-term trading for a few percent gain here and there doesn't matter compared to being along for the ride when a magnitude shift does take place for potentially thousands of percent gains.

There's an easy way to determine someone's mindset in regard to the above. Print this post and attempt to complete the following in 60 seconds:

Read all directions completely before writing anything down. At the end of this exercise you will give yourself a score on how well you did.

• Write your first name in the upper left corner of this page
• Write your last name in the upper right corner of this page
• If your last name begins with a letter from A to M, circle your first name
• If your last name begins with a letter from N to Z, circle your last name
• Write today's date somewhere in the left side of this page
• Write your birthdate somewhere in the right side of this page
• If your birthdate is in a month from January to June, draw a SINGLE line under your birthdate
• If your birthdate is in a month from July to December, draw a DOUBLE line under your birthdate
• Add the DAY of your birthday to the DAY of today's date and put the number under the title of this exercise
• Write the word "score" in capital letters in the lower right corner of this page
• Draw a box around it
• Calculate 2^10 and write the answer in the middle of the page
• Multiply the result by 8 and write the answer above the previous one
• If your first name is in the upper left corner of this paper, give yourself 100 points
• If your first name is in the upper right corner of this page, give yourself -100 points
• Add the number under the title of this exercise to your score
• If there is any writing on the page before you have gotten here for the first time give yourself a ZERO! Then go back and read the directions at the top of the page telling you to read ALL directions completely before writing anything down

If you haven't seen this test before and you scrambled to complete each item, you're most like a trader. If you took the whole thing in before making a decision on where to begin, you're more like an investor. If you've seen this before and simply learned to recognize the pattern, you might be the type to miss important things that you aren't looking for. If you understand why the test is given, you're probably good at seeing the big picture.

More like Bitcoin is a young, hungry black hole drawing all of their energy away.

• Buy a one ounce silver, gold-plated Casascius Bitcoin
• Take it to Pawn Stars in Las Vegas
• "So tell me - what's this Bitcon thing?"

That's where a good catch phrase can work wonders. I like Bitcoin: Better Money