Why a physical bitcoin?

[casascius]

I thought I would start a thread and sort of state my purpose in having created a Casascius Physical Bitcoin (available here https://bitcointalk.org/index.php?topic=41892.0;all - moved to Goods).

I sincerely hope somebody copies the idea of a physical bitcoin and delivers one cheaper, faster, better than me.  While yes I'll make some money making physical bitcoins, it's not my aspiration and not what I want to do for the rest of my life - I just want bitcoin to succeed.  And somebody else can surely do a better job of this than me.

The hologram project was fun - I had to put up about $2k for the custom holograms to happen and it took five or six weeks.  They turned out really well.

OK, so now what?  Now we can cross out the line in the first sentence of the FAQ, which is that "a bitcoin is not tangible".  I just made the edit to the Wiki just now.  That's a big starter.  The fact that a bitcoin is no longer invisible, I think, is huge in and of itself.  OK, yes there are Bitbills and they are great and I own a few, but to me, there was something about there needing to be a bit "coin".

To make the physical bitcoin project self-sustaining, I must charge a significant premium on the coins, which sort of sucks.  Two things to say about that.  For one, that makes it more of a collector's item than an investment vehicle.  If you want to hold bitcoins simply for their value, it's best to simply hold digital bitcoins if you can.  But on the other hand, physical bitcoins are clearly in demand and they ought to command some sort of premium if passed around as payment.  I'm not sure if I'd spend one at Meze Grill for face value, but it's not ridiculous to consider them as having a trade value of "1 BTC + 1 USD" (the USD representing the premium) and asking them to be considered as such.

I only ordered enough materials to make a few thousand of these physical bitcoins, and they are all denominated as 1 BTC.  If I wanted to throw more resources at it, I might have gone after larger coins for denominations like 10 and 100 BTC, which might be valuable to an investor.  For three or four bucks (in quantity) you can get a fairly hefty "commemorative" sort of coin custom designed on the open market, which isn't a bad premium to pay if you're using it to tangiblize 100 BTC.  Somebody might succeed in talking me into it.

Anyway, here's to doing my part to help bitcoin succeed.

[cypherdoc]

I thought I would start a thread and sort of state my purpose in having created a Casascius Physical Bitcoin (available here https://bitcointalk.org/index.php?topic=41892.0;all - moved to Goods).

I sincerely hope somebody copies the idea of a physical bitcoin and delivers one cheaper, faster, better than me.  While yes I'll make some money making physical bitcoins, it's not my aspiration and not what I want to do for the rest of my life - I just want bitcoin to succeed.  And somebody else can surely do a better job of this than me.

The hologram project was fun - I had to put up about $2k for the custom holograms to happen and it took five or six weeks.  They turned out really well.

OK, so now what?  Now we can cross out the line in the first sentence of the FAQ, which is that "a bitcoin is not tangible".  I just made the edit to the Wiki just now.  That's a big starter.  The fact that a bitcoin is no longer invisible, I think, is huge in and of itself.  OK, yes there are Bitbills and they are great and I own a few, but to me, there was something about there needing to be a bit "coin".

To make the physical bitcoin project self-sustaining, I must charge a significant premium on the coins, which sort of sucks.  Two things to say about that.  For one, that makes it more of a collector's item than an investment vehicle.  If you want to hold bitcoins simply for their value, it's best to simply hold digital bitcoins if you can.  But on the other hand, physical bitcoins are clearly in demand and they ought to command some sort of premium if passed around as payment.  I'm not sure if I'd spend one at Meze Grill for face value, but it's not ridiculous to consider them as having a trade value of "1 BTC + 1 USD" (the USD representing the premium) and asking them to be considered as such.

I only ordered enough materials to make a few thousand of these physical bitcoins, and they are all denominated as 1 BTC.  If I wanted to throw more resources at it, I might have gone after larger coins for denominations like 10 and 100 BTC, which might be valuable to an investor.  For three or four bucks (in quantity) you can get a fairly hefty "commemorative" sort of coin custom designed on the open market, which isn't a bad premium to pay if you're using it to tangiblize 100 BTC.  Somebody might succeed in talking me into it.

Anyway, here's to doing my part to help bitcoin succeed.

way to go Casascius.

[Phinnaeus Gage]

Source: http://en.wikipedia.org/wiki/Bernard_von_NotHaus

In connection with the Liberty Dollar business, a federal grand jury brought an indictment against von NotHaus and three others in May 2009,[6] and von NotHaus was arrested on June 6, 2009. VonNotHaus was charged with one count of conspiracy to possess and sell coins in resemblance and similitude of coins of a denomination higher than five cents, and silver coins in resemblance of genuine coins of the United States in denominations of five dollars and greater, in violation of 18 U.S.C. § 485, 18 U.S.C. § 486, and 18 U.S.C. § 371; one count of mail fraud in violation of 18 U.S.C. § 1341 and 18 U.S.C. § 2; one count of selling, and possessing with intent to defraud, coins of resemblance and similitude of United States coins in denominations of five cents and higher, in violation of 18 U.S.C. § 485 and 18 U.S.C. § 2; and one count of uttering, passing, and attempting to utter and pass, silver coins in resemblance of genuine U.S. coins in denominations of five dollars or greater, in violation of 18 U.S.C. § 486 and 18 U.S.C. § 2.[6]

I would stick with the novelty aspect. Sell them at a price point to recognize a nice little profit. It would only take a little creative marketing to reach your goal.

[evoorhees]

So those are pretty bad ass.

I want one now... to where do I send payment??

[amincd]

These put the coin in bitcoin.

[cypherdoc]

i just ordered my 100

[Elwar]

Instead of charging a premium...you could always try to pay for the overhead with advertising.

You can get a sponsor for putting a logo on X amount of coins. Just put a McDonalds logo on one side instead of the "B" or whichever logo.

Who knows, maybe the cost would be covered by the ads.

You can also put advertising on the pages that you sell the coins on with a "sponsored by Meze Grill"

[Furyan]

Instead of charging a premium...you could always try to pay for the overhead with advertising.

You can get a sponsor for putting a logo on X amount of coins. Just put a McDonalds logo on one side instead of the "B" or whichever logo.

Who knows, maybe the cost would be covered by the ads.

You can also put advertising on the pages that you sell the coins on with a "sponsored by Meze Grill"

Or - when redeemed at merchant X, worth 1.25 BTC instead of 1.0. Or something.

[Steve]

These are cool, but I'm curious why people feel the need to have a tangible bitcoin.  To me it kind of reminds me how early autos were made to look like horse drawn buggies.  I get the need for some people to have a physical way of securing bitcoins because of the current usability issues with doing that digitally, but aside from that and the novelty aspect, what is compelling about them?  For me, one of the great advantages of bitcoin is that it does away with the need for such a physical manifestation of a token (while not losing some important properties of physical token).

[casascius]

If anybody has a serious interest in producing physical bitcoins and is willing to invest $2k on their own holograms (the hologram people will do all the art and everything for you, I'll offer a referral), I would be willing to share some of my brass coin blanks at my cost (for which I received a decent quantity discount, and which will be cheaper than if you went and had your own done in a smaller quantity, especially after considering the custom die and artwork charges).  I have well over 10,000 (150+ lbs) of 1 BTC coin blanks.

Demand for these is unexpectedly high even asking a 20-25% premium, and I have not even acknowledged any requests from outside the US, and I am not sure I will be able to satisfy it all on an ongoing basis with the time I am able to devote to this.  (in other words, wow, holy shit, these are selling at least as fast as I can make them and I don't even have a website yet)

[julz]

If anybody has a serious interest in producing physical bitcoins and is willing to invest $2k on their own holograms (the hologram people will do all the art and everything for you, I'll offer a referral), I would be willing to share some of my brass coin blanks at my cost (for which I received a decent quantity discount, and which will be cheaper if you went and had your own done in a smaller quantity, especially after considering the custom die and artwork charges).  

Hmm.  I don't think I like that much.
I guess it wouldn't be that hard for someone to counterfeit the brass coin itself.. but It seems odd to me that you'd encourage some other provider to produce something that looks extremely similar.  Do you mean that the brass coin itself would be identical, and only the hologram would indicate who the coin loader was?

[casascius]

Hmm.  I don't think I like that much.
I guess it wouldn't be that hard for someone to counterfeit the brass coin itself.. but It seems odd to me that you'd encourage some other provider to produce something that looks extremely similar.  Do you mean that the brass coin itself would be identical, and only the hologram would indicate who the coin loader was?

Yes, exactly.  Keep in mind that anybody can acquire my coin blank - they merely need to take one of my coins, redeem it, and clean off all the hologram residue until it shines again.  Hence why my name is simply on the hologram and not on the metal.

Also the people who make holograms understand that they are made for securing things - so they require crap from you to put names on a hologram, including signed documentation asserting your legal right to use the words and images you're putting on the hologram in the first place.  Even to just use the Bitcoin logo (they fully understood it's part of an open source project) I still had to sign a statement explaining why I believed my use of it was rightful.  It seems that that's a generally accepted practice in that industry, promoted by their trade associations.  (sure, the people knocking off Microsoft CD's in China probably don't care, but with those resources, they're probably unlikely to want to go knocking off one guy's hobby project).  So anyway, for anybody to just call up and try to "order a Casascius hologram", or "please duplicate this hologram"... they're going to get obstacles along the way.

[proudhon]

These would be awesome for bitcoin geocaches.

[cypherdoc]

These are cool, but I'm curious why people feel the need to have a tangible bitcoin.  To me it kind of reminds me how early autos were made to look like horse drawn buggies.  I get the need for some people to have a physical way of securing bitcoins because of the current usability issues with doing that digitally, but aside from that and the novelty aspect, what is compelling about them?  For me, one of the great advantages of bitcoin is that it does away with the need for such a physical manifestation of a token (while not losing some important properties of physical token).

Steve, have you ever collected art or had a coin collection when you were a kid?  i know you grew up fast with women like Alyson around but these coins for me at least will be mementos and collectors items to sell or show off one day down the line when Bitcoin goes mainstream.  they will serve as "proof" that i was there from the beginning and was a supporter of the community.

[Steve]

These are cool, but I'm curious why people feel the need to have a tangible bitcoin.  To me it kind of reminds me how early autos were made to look like horse drawn buggies.  I get the need for some people to have a physical way of securing bitcoins because of the current usability issues with doing that digitally, but aside from that and the novelty aspect, what is compelling about them?  For me, one of the great advantages of bitcoin is that it does away with the need for such a physical manifestation of a token (while not losing some important properties of physical token).

Steve, have you ever collected art or had a coin collection when you were a kid?

Yes, I get that and that's reason enough...I was just wondering whether people had more utilitarian reasons for wanting them.

[Littleshop]

I would accept a known physical bitcoin for payment in person, and maybe pay a slight premium for one.  It would be pointless to buy one online as you are just wasting the 'premium' you paid for a physical coin.  The problems minor, but real.  Change is one, few times are items going to be exactly one bitcoin. 

[BurtW]

I have been thinking about this a bit and have a couple of suggestions for "version 2.0" of this product:

* On the metal blanks ditch the denomination.  Instead of "1 bitcoin" say "bitcoins".  Keep the rest the same.
* On the holographic side replace the printed short public key with the QR of the public key.  This is so it can be easily scanned to determine the stored value by a smart phone application.
* Inside keep the private key the same.

I can imagine a holographic sticker with a clear "window" and under the window you simply put a small square of material with the QR on one side and the short private key on the other.  Very simple, easy to mass produce, easy to assemble:

* Produce large sheets of material with 100s of the public QR embossed on one side and the corresponding short private key embossed on the other side.
* Cut into tiny squares in one step, producing 100s of squares for each sheet.
* Stick the squares on the sticky side of the holographic sticker with the QR facing out
* Attach the stickers to the blanks
* They could be sold with no BTC in the account, just the blank "coin", or they could be preloaded as is being done now.

Now, here is one use case I have already run across:  My elderly parents want to be able to have me buy them bitcoins over time.  They just want some in their portfolio, along with some gold, silver, etc. "just in case they go up".  They consider them like a penny stock.  They do not want to get involved with putting the client on their computer, getting a dwolla account, getting an exchange account, etc.  They just want me to set up an account for them, they send me cash, I buy them BTC.

This is perfect!  I buy them one of these physical coins, I remember the public key, I send it to them, they put it in their safe until they want to cash it in.  Whenever they want to buy some more BTC they send me a check, I sell them some of mine or buy some for them on the open market and then transfer the BTC to their "coin" in their safe.

They are very excited about this whole idea where they were very put off by my previous explanations of how I could get them the client.  They were very concerned about someone stealing them off their computer, stealing their computer, losing their computer or their computer crashing, etc.

The idea of having the coin in the safe is very appealing to them.

[casascius]

I have been thinking about this a bit and have a couple of suggestions for "version 2.0" of this product:

* On the metal blanks ditch the denomination.  Instead of "1 bitcoin" say "bitcoins".  Keep the rest the same.
* On the holographic side replace the printed short public key with the QR of the public key.  This is so it can be easily scanned to determine the stored value by a smart phone application.
* Inside keep the private key the same.

Such a product already exists... the bank card from BitBills (assuming they're able to sell them)

I can imagine a holographic sticker with a clear "window" and under the window you simply put a small square of material with the QR on one side and the short private key on the other.  Very simple, easy to mass produce, easy to assemble:

* Produce large sheets of material with 100s of the public QR embossed on one side and the corresponding short private key embossed on the other side.
* Cut into tiny squares in one step, producing 100s of squares for each sheet.
* Stick the squares on the sticky side of the holographic sticker with the QR facing out
* Attach the stickers to the blanks
* They could be sold with no BTC in the account, just the blank "coin", or they could be preloaded as is being done now.

I could probably already produce such a thing.  I have a pack of the holograms with no code on them... if I were to use a plastic card printer to print a credit-card-sized bank card and cover the private QR with one of the holograms, I'd essentially have something that met your need.

Now, here is one use case I have already run across:  My elderly parents want to be able to have me buy them bitcoins over time.  They just want some in their portfolio, along with some gold, silver, etc. "just in case they go up".  They consider them like a penny stock.  They do not want to get involved with putting the client on their computer, getting a dwolla account, getting an exchange account, etc.  They just want me to set up an account for them, they send me cash, I buy them BTC.

This is the exact reason I sort of want to do some 100 BTC golden bricks.  They would be very elderly compatible, because in their mind it sort of works like gold - it has a denomination and a fluctuating value they can look up.  Possession in this case would be 100% of the law.  If you want something to hold an arbitrary value of bitcoins and it doesn't matter if it's pre-denominated in some permanent fashion from a factory, why not just make a paper wallet?  If I told my grandma that this "bitcoin" was now really 100 bitcoins because of some voodoo I did on a computer, I'd instantly be over her head.

[julz]

These are cool, but I'm curious why people feel the need to have a tangible bitcoin.  To me it kind of reminds me how early autos were made to look like horse drawn buggies.  I get the need for some people to have a physical way of securing bitcoins because of the current usability issues with doing that digitally, but aside from that and the novelty aspect, what is compelling about them?  For me, one of the great advantages of bitcoin is that it does away with the need for such a physical manifestation of a token (while not losing some important properties of physical token).

Steve, have you ever collected art or had a coin collection when you were a kid?

Yes, I get that and that's reason enough...I was just wondering whether people had more utilitarian reasons for wanting them.

One reason is just as a talking point when introducing people to bitcoin.
I already carry a few bitbills around in my pocket - having a casascius bitcoin as well will help make it clear that there is no central issuer and that the value is all in the private key.

I'm also giving a few to family as gifts.  While it would be easy to give them a thumb-drive and password etc - that's just not going to have any impact.
A physical representation of a bitcoin will be something people are far more likely to enjoy and keep safe and it will possibly get some of them interested in the concepts behind bitcoin.

[RSantana]

As I stated in your other thread (https://bitcointalk.org/index.php?topic=41892.msg513789#msg513789)... The barrier to counterfeit this is very low. As this coin gains wider adoption and acceptance the motive to counterfeit goes very high.

I don't see how this could work.