[CALLING Current Coin Makers] How was Casascius able to make his coins so cheap?

[TookDk]

Personally, I take possession of my dies after coins are produced.  While I can't speak for Mike, given his stance on security, I would imagine he also took possession of his dies.

As for how he was able to sell them so cheap...  The brass is only worth about $0.05, I imagine it probably cost $1 per unit for the minting fee, and at $2 he could have been doubling his money (see my below post w/ link showing that his total cost could have actually been lower than $0.50 each).  The question you should be asking, is how are current coin producers able to get away with copying Casascius' idea and then charging a $75-$500 markup for what is essentially a knock off.

Current coin producers are doing it to earn a profit (I have no problem with that btw.).
Mike had a political agenda, his goal was to teach the world about bitcoin.

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[SaltySpitoon]

the premiums associated with Bitcoin collectibles is unheard of.

I also think physical bitcoin collectors generally think 1BTC = 1BTC regardless of the current USD value.

This applies to me. I don't consider the USD value of premium on a coin too much when buying physical btc. I buy in BTC with hopes to get it sold for BTC, and never fiat. Of, course it helps to look at the USD price to follow up on how other people will buy or sell.

1BTC = 1BTC 

I agree 1 BTC = 1 BTC. But if you load 1 BTC onto a Physical coin made of $16 worth of metal and sell it for 1.5 BTC, TYPICALLY, and I emphasize that because that is typically the case with collectibles, but seemingly not Bitcoin collectibles, when you go to sell it, it will be worth 1 BTC + current metal value + some premium. These aren't really coins that have tens or hundreds of thousands of people looking to buy and hold them for 20 years like fans of government mint bullion or other collectible coins. These never really leave circulation, because no one peels the sticker, redeems the coins, and melts down the coin, so they aren't ever growing more rare.

It really is a phenomenon in collectibles that defies all traditional rules. The first law of collectibles, is anything made to be collectible often is not. You need a massive evergrowing fanbase to keep something designed to be collectible collectible, otherwise you end up with a van full of beanie babies.

[OgNasty]

It really is a phenomenon in collectibles that defies all traditional rules. The first law of collectibles, is anything made to be collectible often is not.

It doesn't defy the first rule of speculation.  “The market can stay irrational longer than you can stay solvent.”  We are just seeing an irrational market.  These $0.05 poker chips and glorified car wash tokens will not be able to sell with $75-$500 markups forever.  Casascius coins earned those markups with their place in history.  There should be no other <$2 coin selling for >$100 in this community.

Current coin producers are doing it to earn a profit (I have no problem with that btw.).
Mike had a political agenda, his goal was to teach the world about bitcoin.

While I agree about Mike, I disagree that we are all doing it just for a profit.  I could give numerous examples of how I've personally with great cost taken actions to improve my products and innovate based on Casascius' original idea.  There are good projects out there (at least 1 that I know of) that are motivated by building something for the benefit of the community.

[monbux]

Personally, I take possession of my dies after coins are produced.  While I can't speak for Mike, given his stance on security, I would imagine he also took possession of his dies.

As for how he was able to sell them so cheap...  The brass is only worth about $0.05, I imagine it probably cost $1 per unit for the minting fee, and at $2 he could have been doubling his money.  The question you should be asking, is how are current coin producers able to get away with copying Casascius' idea and then charging a $75-$500 markup for what is essentially a knock off.

To be honest that was the point I was getting at.  Any idea, anyone?

And i thought the idea for the thread was that you may be looking to produce your own coins soon  

I'm very interested in producing some coins to sell and give away to other people, but the markups I've seen businesses charge on this forum seem much higher than the production costs.
I'll probably still go ahead with producing some unique coins, but would never plan to charge such a higher markup for them.

[monbux]

Personally, I take possession of my dies after coins are produced.  While I can't speak for Mike, given his stance on security, I would imagine he also took possession of his dies.

As for how he was able to sell them so cheap...  The brass is only worth about $0.05, I imagine it probably cost $1 per unit for the minting fee, and at $2 he could have been doubling his money (see my below post w/ link showing that his total cost could have actually been lower than $0.50 each).  The question you should be asking, is how are current coin producers able to get away with copying Casascius' idea and then charging a $75-$500 markup for what is essentially a knock off.

Current coin producers are doing it to earn a profit (I have no problem with that btw.).
Mike had a political agenda, his goal was to teach the world about bitcoin.

That's true and I think we are all appreciative of what he did.

To those people saying 1 BTC = 1 BTC, very true, but when you purchase a coin, that was paid for in USD, shouldn't you be marking its value in USD as well?

I just find it hard to believe that you'd still be willing to pay $3000 USD worth in markups for a 1 BTC coin if 1 BTC = $10000, and that coin sells for 1.3 BTC. 

[nubbins]

People are weird. I've been a numismatist in non Bitcoin collectibles for a while now, and the premiums associated with Bitcoin collectibles is unheard of. The most valuable silver coin I've ever gotten a hold of was one of seven that existed, it was produced by a government mint in a pretty collectible series, graded MS70, and it sold for ~$300 over spot. Tuvalu isn't a super well known mint, but I'd conservatively estimate there are at least 100,000 people that collect their coins world wide.There are ancient roman/greek silver coins graded and with historical significance that sell for less than that of what mint produced silver blank pressed physical BTC are selling for.

The free market is what it is, obviously a business is going to charge the most it can while maintaining its customers patronage, but if you try to explain the Bitcoin collectibles market to someone who deals in rare coins, they will just look at you dumbstruck when you start talking about the prices. I've seen the same baffled look three or four times now.

Just FYI, you can contact Sunshine Mint, OPM, or any number of generic bullion mints and get a quote for a run of custom coins. Depending on the complexity of the coin and the min order size, you could probably pay as little as $2 over spot / oz + $200-300 for the dies.

Soooo basically when I sold a 2013-minted half-oz round for 15 BTC, I set a world record

[BitcoinPenny]

We (The Bitcoin Penny Co.) don't make the expensive $75-$100 Fine .999 Silver collectible coins, but I'll add my thoughts. (Please keep in mind that these thoughts apply to TBPCo only, as I have no knowledge of the inner-workings of other coinmakers' businesses.)

The markup is not all profit. In fact, there is very little profit, respectively. Most of the markup covers all the little things such as packaging materials and printing costs, monthly website fees, shipping supplies and actual shipping costs (we lose money on most international sales), all the local, state, and federal retail licenses and sales taxes (if you properly claim the income as a business, which we do), and a bazillion more little things that you'd never, EVER expect. And then there's all the little extra special things you want to do that weren't in the original budget, like free stickers. =)

We lost a good bit of money in our first year (2015), but we learned a lot about small (micro) business. We changed a few things with our next release, and we broke even somewhere in the summer of our second year (2016). Technically, we're still a couple hundred bucks in the black, so we're happy with how 2016 will end for us. =)

We treat this like a legal business, which it is, but it's not really a viable business. I would make a LOT more money working part-time at minimum wage, but it's fun and I like it. =/

I'm rambling again. LOL I guess my point is that there are a LOT of (expected and unexpected) expenses that go into running a small collectible coin business, so a little markup is required.

To put it another way, the minting is the easy part. It's maintaining the business that takes time, effort, and money.

Hope my perspective helps.

Regards,
Chris

[wheelz1200]

Have to agree with Chris here with all of the unforseen costs (including an ungodly amount of gas going back and forth to the post office, lol).....not to mention the time.  It really isnt that profitable enough for anything substantial unless you are mass selling successfully which I think this is still a  micro market so maybe only a handful of people can do that.  For me its more for the fun as well, and to try to add a little to the market and keep it moving forward.

[BitcoinPenny]

Maybe if someone were able to sell loaded .999 Silver physical bitcoins (which excludes USA makers) at a small .15 BTC premium and limited the run to 100 coins maximum (to increase collectibility), they could make ~$11,500 total premium. And if they sold thru BTForum exclusively, they could avoid all the associated website and hosting costs/fees. And if they did it all under-the-table (without properly notifying the government), then they could avoid a huge amount of city, state, and county license fees, retail sales taxes, and any basic income taxes. In the above case, I could easily see someone making a nice little profit in a short time. Throw in a few new designs per year, and you might be able to squeak out a living for a year or two (based on USA economy).

Regards,
Me