At the peak of the 2011 bubble I started GPU mining as my CPU mining efforts has not yield any results.
After mining for a few months I was the proud owner of a few dozen coins but I was left somewhat disillusioned at the economic potential of Bitcoin (I had not yet discovered Bitcointalk)
After discovering Casascius Physical coins I was struck by the marvel of that my computers had generated enough economic benefit to justify the mining of metals, the minting of a coins and wherewithal to encourage someone to take the risk and pay to ship real tangible BTC GDP output to me. Quite an epiphany :-)
No drought, I made my first Bitcoin purchase. I bought 4 casascius Bitcoins, and I paid in Bitcoin, the total cost was 9BTC to quantify that, I'll Include Campbell's Ready To Serve Cream Of Mushroom Soup (I know people think Fiat isn't worthy.) it works out like this:
4 Bitcoin cost me 9 Bitcoin. (BTC2.25 Each)
Or in Fiat 4 Bitcoin's cost me $ 243. ($60 each)
Or in Soup, Bitcoin cost me a deflationary loss of 42.6 cans of soup. *
*9BTC = 4BTC ( 127.8 cans of Soup difference at today's price)
Not to do with deflation, but to add injury to insult, I experimented initially with my Bitcoin faucet BTC0.05 and sent some of it to a few publically available addresses where I could see the balance. amazingly it worked, however when it came time to pay for my Casascius coins, being a novice I sent my BTC9 to the wrong address, making the cost of my 4 coins effectively double (BTC4.5 per BTC1) .
So I have come to realise my 9BTC investment for 4BTC Casascius coins was a good hedge against deflation.
You didn't buy the 4
BTC for 9
BTC, that's absolutely nonsensical. What you did was spend 5
BTC on a plated coin with a private key (worth nothing) on it, and sent a further 4
BTC to load up the private key. So effectively, you spent 5
BTC on a coin and the labour that went in to making it special (the 4 other
BTC were not really "spent").
This isn't a "hedge" against deflation as you purpose. That's simply purchasing a commodity for money. It isn't a hedge against deflation in the sense that buying a new bed isn't a hedge against inflation.
An example of a "hedge" against deflation would be an option contract where if the value of a coin increases substantially, someone has the option to buy coins from you at the previous value. You would earn an immediate profit (the fee for taking a hedge) in return for a possible loss if deflation happens.
