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Author Topic: Thinking about creating my own physical Bitcoin...  (Read 3437 times)
SgtSpike
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June 10, 2013, 05:45:41 AM
 #41

I decided to move forward with this project, since you all are eager about it.  It bodes well that I seem to have customers before even starting.  I aim to fund the entire startup amount via kickstarter and possibly bitcoinstarter.  I'll have to raise around 4 to 5 times what my startup costs are (so, raise $25,000 - $35,000 in total), simply because I'll have to buy Bitcoins with a large part of the funds to ensure that I can fund the coins after they are produced.

In the meantime, I've been playing around with coin designs.  While I plan to have a pro complete the finished design from scratch, I want to have something visual to offer on the kickstarter page that will be at least somewhat close to the finished product.  What do you all think of this design?



Black would be embossed, gray would be textured.

The overall idea of the design is to show the freedom and global reach of using Bitcoin.  In Libertate Commercia translates to "Trade In Freedom" according to my Latin-loving cousin.  The binary around the edge also converts to say the same.  The box at the bottom would have the firstbits of each coin engraved (though I am unsure whether I actually want to keep this feature, as it does add some complexity to the logistics of it all).  The earth on the front of the coin shows the Americas, and a small part of the eastern continents.  I plan to have a similar design in the center of the hologram on the back of the coin, but showing the continents on the opposite side of the globe instead.

EDIT:  Also, any ideas for naming the coins?
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June 10, 2013, 12:37:47 PM
 #42

It is a nice design, it has some similarities with our design, but we are not competing with your project.
Your project has some unique features that are very special (the unique names is a great feature and adds a lot of value)

Instead we are focused on issuing a value based piece in high quantity that can be used as barter in perpetuity without removing Bitcoins from the market, requires no trust (not even needing to trust the issuer that they haven't already spent an embedded bitcoin) and one that maintains the same anonymity that you might expect from the change in your pocket without any special procedures.

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June 10, 2013, 01:22:07 PM
 #43

Looks good. I would love to see a world map included that is not US/European-centered. Maybe, switch to a map with the pacific ocean as the center so it would look less imperialistic and more egalitarian.
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June 10, 2013, 01:29:21 PM
 #44

How big will this coin be?
The text would be very small for a Casascius 1BTC
(However, on a 1oz silver round it might be ok)

name suggestions:
Spikecoin, Sergeantcoin  Grin

                                 
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data_teks
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June 10, 2013, 02:39:18 PM
 #45

 I'll have to raise around 4 to 5 times what my startup costs are (so, raise $25,000 - $35,000 in total), simply because I'll have to buy Bitcoins with a large part of the funds to ensure that I can fund the coins after they are produced.


Seems there's lots of people interested in creating a casascius type coin; I've been thinking about it myself. However, I think your trying to raise to much which might set you up for failure.

Here's my thinking on your quote above:

Why buy bitcoins? Do like Mike and just fund the majority of BTC coins sales with the BTC that the customer just paid you.  This is the best way unless you plan on accepting real money for these items. If that's the case, then your going to run into the whole "money transmitter" issue and your going to need a heck of a lot more than $35k to become compliant (I'm assuming you live in the US).

But if you just accept BTC only, don't buy a bunch of BTC in bulk as you never know what the price of BTC will be. You might buy high, price drops a lot, and then you get a bunch of orders because people want to buy low; could really land a blow.  I think casascius has it down right as price per BTC doesn't really matter to him as much as he will always make a profit on a sale.

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June 10, 2013, 02:45:02 PM
 #46

agree mike needs some good competition.

SgtSpike
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June 10, 2013, 03:18:23 PM
 #47

Looks good. I would love to see a world map included that is not US/European-centered. Maybe, switch to a map with the pacific ocean as the center so it would look less imperialistic and more egalitarian.
I agree, it is difficult to find such a map, but that's what I hire a graphic designer for - they can create one from scratch.  Smiley

I'll have to raise around 4 to 5 times what my startup costs are (so, raise $25,000 - $35,000 in total), simply because I'll have to buy Bitcoins with a large part of the funds to ensure that I can fund the coins after they are produced.


Seems there's lots of people interested in creating a casascius type coin; I've been thinking about it myself. However, I think your trying to raise to much which might set you up for failure.

Here's my thinking on your quote above:

Why buy bitcoins? Do like Mike and just fund the majority of BTC coins sales with the BTC that the customer just paid you.  This is the best way unless you plan on accepting real money for these items. If that's the case, then your going to run into the whole "money transmitter" issue and your going to need a heck of a lot more than $35k to become compliant (I'm assuming you live in the US).

But if you just accept BTC only, don't buy a bunch of BTC in bulk as you never know what the price of BTC will be. You might buy high, price drops a lot, and then you get a bunch of orders because people want to buy low; could really land a blow.  I think casascius has it down right as price per BTC doesn't really matter to him as much as he will always make a profit on a sale.
I appreciate the input.

The reason I would need to buy Bitcoins is because the kickstarter is in USD, and I expect that the vast majority of the startup funds would come from kickstarter.  If I promise to send out coins in exchange for people helping to kickstart the project, but the price of each Bitcoin rises to $1,000 before I am able to purchase Bitcoins for the coins, then I would have no way to fulfill my obligation.

Even if I raised funds only in BTC, I would still have to set the majority of the BTC raised aside to be able to fund the coins with, which means I would still have to raise several times my startup costs in order to be able to pay for those startup costs.  It's six one way, a half dozen the other.

Good point about the Money Transmitter laws... that might make a kickstarter out of the question anyway.
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June 10, 2013, 03:58:32 PM
 #48

You could just start a Kickstarter project where you send them a coin with the hologram/wallet ID/private key in place but the coin is just unfunded; this also makes it so a donation can be a lot less and they still get a coin.  Then just leave it to them to fund the coin if they wish. This would drastically reduce your start-up cost and not have to worry about the money transmitter issue.

You would just have to research the cost of your die, custom hologram, accessories, shipping, etc before starting the project so you don't cut yourself off at the knees. At the end of the day, your main cost will just be the initial master die ($200-$1500) and master hologram (high as $5000).  After those are done, reorders are pretty cheap. Also, don't pay for a graphic designer. Most companies have in-house ones that will do it for free if you're making your coins with them.  They also do it for a living on coins, so they know what will work and will look good.

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June 10, 2013, 04:26:47 PM
 #49

You could just start a Kickstarter project where you send them a coin with the hologram/wallet ID/private key in place but the coin is just unfunded; this also makes it so a donation can be a lot less and they still get a coin.  Then just leave it to them to fund the coin if they wish. This would drastically reduce your start-up cost and not have to worry about the money transmitter issue.

You would just have to research the cost of your die, custom hologram, accessories, shipping, etc before starting the project so you don't cut yourself off at the knees. At the end of the day, your main cost will just be the initial master die ($200-$1500) and master hologram (high as $5000).  After those are done, reorders are pretty cheap. Also, don't pay for a graphic designer. Most companies have in-house ones that will do it for free if you're making your coins with them.  They also do it for a living on coins, so they know what will work and will look good.

There are a lot of concerns in design.  Not just the look, but it starts there.  If you want the coins to circulate, you also have to consider how they will wear.  If you are using precious metal, there are different characteristics of each of these, hardness, malleability, melting temp (which relates to pressure when struck in the press), as well as how the metal will flow into the die, and the different sorts of luster you can achieve with different finishes as well as a vast amount of historical design across the world.
If you are a collector, or numismatist, you probably have some idea of what works and what doesn't over time.
The zinc content in the Indian Rupee for example.  It is light and looks fine when new, but wears out fast.

With your project, circulation issues may not be a high concern as it will be for my project.  My goal is different though.  Looking for high volume and to keep them in circulation as much and as long as possible, and not to lose any value when "used".

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June 10, 2013, 04:59:01 PM
 #50

You could just start a Kickstarter project where you send them a coin with the hologram/wallet ID/private key in place but the coin is just unfunded; this also makes it so a donation can be a lot less and they still get a coin.  Then just leave it to them to fund the coin if they wish. This would drastically reduce your start-up cost and not have to worry about the money transmitter issue.

You would just have to research the cost of your die, custom hologram, accessories, shipping, etc before starting the project so you don't cut yourself off at the knees. At the end of the day, your main cost will just be the initial master die ($200-$1500) and master hologram (high as $5000).  After those are done, reorders are pretty cheap. Also, don't pay for a graphic designer. Most companies have in-house ones that will do it for free if you're making your coins with them.  They also do it for a living on coins, so they know what will work and will look good.
Interesting idea... the only problem I have with leaving the coin unfunded is that people couldn't take them without looking them up.  You couldn't make the assumption that a 1 BTC coin actually holds 1 BTC by just making sure the hologram is intact.

It would certainly skirt the possibility of having to comply with MT/MSB though.

Thanks for the thoughts!
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June 10, 2013, 05:30:27 PM
 #51

Interesting idea... the only problem I have with leaving the coin unfunded is that people couldn't take them without looking them up.  You couldn't make the assumption that a 1 BTC coin actually holds 1 BTC by just making sure the hologram is intact.

It would certainly skirt the possibility of having to comply with MT/MSB though.

Thanks for the thoughts!

You could just make a universal coin to start your project that doesn't necessarily represent a certain amount of BTC.  It would just be a random BTC cold storage coin but it's created by you, so it could be resold by others as you did the whole security part of the coin.  People would know your coins are made and sold unfunded; they would know the risk and know they need to look up the wallet ID on the coin to check BTC value.  Once you get further along and enough funds, you then can go into production of your own prefunded .5B, 1B, 5B, etc...coins.

Just a thought.

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June 10, 2013, 06:17:03 PM
 #52

Interesting idea... the only problem I have with leaving the coin unfunded is that people couldn't take them without looking them up.  You couldn't make the assumption that a 1 BTC coin actually holds 1 BTC by just making sure the hologram is intact.

It would certainly skirt the possibility of having to comply with MT/MSB though.

Thanks for the thoughts!

You could just make a universal coin to start your project that doesn't necessarily represent a certain amount of BTC.  It would just be a random BTC cold storage coin but it's created by you, so it could be resold by others as you did the whole security part of the coin.  People would know your coins are made and sold unfunded; they would know the risk and know they need to look up the wallet ID on the coin to check BTC value.  Once you get further along and enough funds, you then can go into production of your own prefunded .5B, 1B, 5B, etc...coins.

Just a thought.
Thanks, I appreciate it.  That's definitely a course of action I could take...!
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June 10, 2013, 06:49:03 PM
 #53

Instead of kickstarter, I am considering conducting a pre-sale here on this forum.  Some quick calculations show actual cost break-even at about 150 1 BTC shiny gold-plated coins sold at 1.4 BTC each + S/H.  I'd set it up so that if that 150 coin goal is not met by a certain date, I would simply refund the full BTC to everyone who preordered.

- Should I go with a higher price for lower # of coins necessary to meet the goal?  96 coins would be sufficient at 1.6 BTC each, for example.
- Should I go with a lower price to encourage more preorders?
- Should I offer multiple denominations of coins from the get-go?  It would increase the fixed costs by a small margin.

Since I have some unique firstbits that can never be reused, I was also thinking of offering some sort of premium coin feature, where those who paid more for the premium feature could pick out which firstbits they wanted on their coin before the others, out of the whole list of firstbits I have available.  Would this be a desirable feature?  How much extra would be fair to charge for this feature?  Or should it be a "pay whatever extra you want, and you can pick in order starting with who paid the most"?
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June 10, 2013, 06:52:58 PM
 #54

any chance of making small denominations?

0.01, 0.05, 0.10?

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June 10, 2013, 07:05:34 PM
 #55

Hei Spike,
nice little project. I would prefer lower rated coins. I also would'nt care about looking that much. As far as we reach "normal curency looking" the more it would be noticed by people that never heared about btc Smiley
1 btc equals about 100 usd atm. And should raise even more... so a coin with1 btc will not often change the owner. All coins made so far are more collectables than an alternative to always buy from a pc or anything.
Just my 5 cents Wink see you on minecraftcc Smiley
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June 10, 2013, 07:06:36 PM
 #56

any chance of making small denominations?

0.01, 0.05, 0.10?
I was thinking about 1 BTC, 500 mBTC, and 100 mBTC.  I could go smaller to 50 mBTC and 10 mBTC, but the cost would have to be much higher than the face value to make them viable.  On the 10 mBTC piece, I'd have to charge around 45mBTC per coin just to cover variable costs, and the final price would likely be much higher than that.  But, I am still looking at various coin minters - I may be able to find a lower cost minter.

So, I think it is a definite possibility to go down to at least 100 mBTC, and possibly 50 mBTC.  I don't know that 10 mBTC is practical at this point though.
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June 10, 2013, 07:11:43 PM
 #57

Instead of kickstarter, I am considering conducting a pre-sale here on this forum.  Some quick calculations show actual cost break-even at about 150 1 BTC shiny gold-plated coins sold at 1.4 BTC each + S/H.  I'd set it up so that if that 150 coin goal is not met by a certain date, I would simply refund the full BTC to everyone who preordered.

- Should I go with a higher price for lower # of coins necessary to meet the goal?  96 coins would be sufficient at 1.6 BTC each, for example.
- Should I go with a lower price to encourage more preorders?
- Should I offer multiple denominations of coins from the get-go?  It would increase the fixed costs by a small margin.

Since I have some unique firstbits that can never be reused, I was also thinking of offering some sort of premium coin feature, where those who paid more for the premium feature could pick out which firstbits they wanted on their coin before the others, out of the whole list of firstbits I have available.  Would this be a desirable feature?  How much extra would be fair to charge for this feature?  Or should it be a "pay whatever extra you want, and you can pick in order starting with who paid the most"?

How about the following. It would incentivize and reward early investors while mitigating your risk.

Choose a single firstbit, let's just say 1music to pick one.

Offer an auction for all 150 first-run coins at 1.4 BTC apiece.
Auction goes 1 week. If all coins have at least the minimum bid, collections will begin. If all are not covered, the entire auction is null and void.
Winning bidders may choose the coins they want from the initial lost of 150 in price-descending order. (Highest payers get first choice.)
Winning bidders will get first crack at subsequent printing runs.

For example, after this first auction has been run, startup costs have been cleared. Let's say 34 bidders claimed the initial 150 coins.

Now you're ready to start 1music, Second Printing.  These are offered at 1.25 BTC apiece. You offer up the 1000 coins to the 34 bidders, immediately sell 430 of them, then offer the final 570 to the market. (On an ongoing basis, the starting price is adjusted up or down based on demand.)

This process can then be repeated for subsequent firstbits.
This way, collectors can define the price, you offset upfront costs, and still can pad a reasonable profit on an ongoing basis.
You create a rotating collectible stock.  (Future custom engravings could be considered in the future, if/once this has legs.)

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June 10, 2013, 07:55:35 PM
 #58

Chainsaw, I think you are missing a critical aspect of firstbits.  There is only one 1music firstbits address.  Any subsequent addresses would have to have firstbits of, say, 1music1, 1musicb, 1musicp, etc.  So I own the address corresponding to 1music (and a lot of other simple english words, names, and patterns).  No one else has it, no one else can generate it, etc.

There wouldn't be a run of 1music coins.  There would be a run of coins with one coin having 1music engraved, one coin having 1sexy engraved, etc etc.    Those firstbits could never be reused - they can only exist once.

Engravings cost only $0.50/coin, which is why I am considering a unique engraving for each coin.

All of that said, I rather like the auction idea!  It would still work (arguably even better) for a run of 150 coins with different firstbits addresses.  I could pick out 150 prime firstbits addresses that I own, and then allow the auction to work out who pays how much for which ones.  If I don't raise enough funds through the auction, then everyone is refunded.  And after fixed costs are recovered, I could drop the price further.
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June 10, 2013, 08:19:11 PM
 #59

I fully support this spike. I would be glad to preorder/invest in/etc to help make this happen.

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June 10, 2013, 08:26:36 PM
 #60

I fully support this spike. I would be glad to preorder/invest in/etc to help make this happen.

Count me as a customer/supporter as well.
Especially if you will take payment in silver/gold. Smiley
If you want to partner.  I have the manufacturing/design/distribution elements covered as well for minting, though your project seems to be a better fit for engraving over minting.  I may be able to see many of the pitfalls that are ahead for you, if you want to chat about it sometime.

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