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Venezuelan Bitcoin Miners Bribed and Thrown in Jail by Secret Police

Over the past few months, officials in Venezuela have been cracking down on underground Bitcoin mining operations within the country. According to various reports, Venezuela’s secret police has been coercing Bitcoin miners for bribes or they would otherwise be thrown into jail if they don’t pay the extortion.

Also read: Norwegian Prosecutors Seek 120 Bitcoins in Court Restitutions

Bitcoin Mining and Extortion

Venezuelan Bitcoin Miners Bribed and Thrown in Jail by Secret PoliceThe Venezuelan economy has been suffering from significant hyperinflation and hardship for quite some time. Over the course of the past year, Bitcoin adoption has grown rapidly in Venezuela as some citizens are turning to the decentralized currency and underground mining operations. Electricity is cheap in Venezuela and subsidized by the state, making mining operations more lucrative than working for bolivars.

This past November, two brothers from Caracas operating a Bitcoin mining operation were raided by the country’s secret police (Sebin). According to the brothers’ reportsofficers ordered them to pay $1,000 for every mining machine they owned. The brothers, who wished to remain anonymous, stated that they had paid the police to keep mining. Nevertheless, miners in Venezuela are being caught more often because the state’s power corporation is finding mining operations consuming 20 times the electricity used in a traditional home.

Venezuelan Bitcoin Miners Bribed and Thrown in Jail by Secret Police
Raids by the Venezuelan secret police (Sebin) are becoming increasingly common in the area since the economic turmoil started.

Surbitcoin Employee Thrown in Jail for Eight Months

Bitcoin.com has reported on multiple incidents of mining operations being seized by Venezuelan authorities. However, these types of arrests started in March of 2016 as Joel Padrón and José Perales from Valencia were arrested for possession of illegal mining rigs and electricity theft. The miners ran their business stealing electricity within the industrial zone of Valencia, officials from Sebin explained. Sebin also stated that they had seized multiple mining rigs and four laptops from the establishment where Padrón and Perales were arrested.

At the time, Daniel Arraez, a consultant for the Venezuelan Bitcoin exchange Surbitcoin, was asked to give a testimony. The accused miners had stated that they had used Surbitcoin’s services to conduct trades.

When Arraez went to the police station, he was suddenly detained and thrown in a cell with Padrón and Perales. Arraez details how he was charged with associating with a criminal operation and illegal money transmission. The Surbitcoin consultant said that he spent eight months in prison and is currently preparing for a trial.

“We were only the scapegoats of the disastrous situation in the country’s electricity sector”, Arraez explains.

Surbitcoin has also had some issues with regional banks this year but is operating once again after a temporary hiatus. However, the company says that its user base has grown from 450 registrants to 85,000 to date.

What do you think about the Venezuelan secret police cracking down on miners and exchange employees? Let us know in the comments below.


Images via Shutterstock and Pixabay. 


Now you’ve got your first bitcoin, where can you spend it? Well, the easiest place to try it out is our very own bitcoin.com Store. You’ll find everything bitcoin-related, from clothing to all kinds of accessories and much more. You’ll experience that “wow” moment all bitcoiners have felt after paying with bitcoin for the first time.

The post Venezuelan Bitcoin Miners Bribed and Thrown in Jail by Secret Police appeared first on Bitcoin News.

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ETF Blues? Check These Alternative Exchange-Traded Bitcoin-Backed Instruments

A Bitcoin trading frenzy ensued in the weeks and days leading into the Securities and Exchange Commission’s rejection of the Bitcoin ETF. Many investors might be interested to know that numerous regulated Bitcoin-backed instruments exist across several traditional markets already.

Also Read: This Key Bitcoin Indicator is Dropping Like a Rock

A Bitcoin ETI

Traditional Markets Already Offer Bitcoin-Backed Instruments

A bitcoin-backed ETN (Exchange-Traded Note) was approved back in 2015 in Sweden and a Bitcoin ETI (Exchange-Traded Instrument) was approved last summer in Gibraltar. In what represents the latest approved traditionally traded Bitcoin-backed financial instrument, the Bitcoin ETI enabled individuals to invest in an institutional instrument representative of the digital currency.

“BitcoinETI”, an asset-backed ETI tied to Bitcoin, trades under the ticket BTCETI. Gibraltar approved the Bitcoin exchange-traded instrument BitcoinETI for the Gibraltar Stock Exchange, and the instrument was also approved for Germany’s Deutsche Börse.

An exchange traded instrument (ETI) is an asset-backed security. Its value, in this case, is related to Bitcoin’s value. ETI’s are used to re-arrange the value of a Special Investment Vehicle (SIV) into an EU Transferable Security.

“By listing the ETI on the Gibraltar Stock Exchange, which is an EU regulated market, we are able to bring a high-level of transparency and liquidity to investors,” Ransu Salovaara, CEO of Revoltura said in a press release issued at the time.

Revoltura “has plans to introduce and list further digital currency and disruptive technology instruments in the near future.”

Available through regulated brokerage firms in Europe, with settlements managed by Clearstream/Euroclear, BitcoinETI functions as any other security in Europe.

“We continue to work with the private sector and our regulator on an appropriate regulatory environment for operators in the digital currency space. The launch of this ETI on our stock exchange demonstrates our ability to be innovative and to deliver speed to market,” said Gibraltar’s minister for financial services and gaming, Albert Isola. 

The instrument allows Europe’s asset managers and pension funds to hold Bitcoin through an European Union stock exchange. Gibraltar, an overseas territory of the UK, has long sought to become a EU virtual currency hub.

“GSX is an EU regulated market which offers efficient and cost effective solutions for innovative companies and financial products. We look forward to supporting the BitcoinETI in its entry to the public markets” said Nick Cowan, Managing Director of the Gibraltar Stock Exchange.

XBT Provider

Another publicly traded Bitcoin fund in Europe, XBT Provider, is also designed to track the movements of its underlying asset, bitcoin. The fund offers Bitcoin Tracker One (COINXBT) and Bitcoin Tracker EUR (COINXBE) in the form of an Exchange Traded Note (ETN).

ETN’s are unsecured debt securities issued by banks, and they are backed by the credit of the issuer. Holders of the fund have enjoyed impressive gains over its existence.

COINXBT has risen in value from 10 Swedish kronas to 50 Swedish kronas since its introduction.

Bitcoin Investment Trust

Alan Silbert’s Bitcoin Investment Fund (BIT) was launched first as a private fund, but has since ceased issuing shares under this model. It received approval in 2015 from the OTC Markets Group’s OTCQX.

BIT represented the first product from Mr. Silbert’s Grayscale Investments, a digital assets management firm. Each share of BIT is worth 1/10th of a Bitcoin.

Instead of applying with the SEC, BIT took another path allowed by the Financial Industry Regulatory Authority, which disallows it from being traded as an ETF. It has been reported, however, that BIT could be headed for an IPO.

Alongside the recently rejected Bitcoin ETF, SolidX has also recently filed to become a fund listed on the New York Stock Exchange and even offer full insurance, but its likely the SEC’s recent ETF rejection could put a damper on such plans. 

Would you invest in a bitcoin ETI or ETN, or are you waiting for an ETF? Let us know in the comments below.


Images courtesy of Shutterstock, Bloomberg


How much do you want to know? Bitcoin.com has live data feeds with the latest world price indexes and trends (in three currencies) plus statistics on all the interesting facets of the bitcoin network.

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The Ether Review #58 ?'” ?'?Status?' Conquers Mobile

Ever wished for a final login, a final app? The last user name you would ever need, the last thing you would ever need to download?The Ethereum mobile client Status promises just that and it?’?s release is just around the corner. Founders Jarad Hope and Carl Bennetts join us to explain.

Nick Szabo?’?s blog Post Money, Blockchains and Social Scalability:http://unenumerated.blogspot.co.nz/2017/02/money-blockchains-and-social-scalability.html

https://etherreview.info/https://status.im/

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Norwegian Prosecutors Seek 120 Bitcoins in Court Restitutions

On March 10 Norwegian prosecutors have charged three men with online narcotics sales that stemmed from the Silk Road marketplace. Court officials are now seeking a substantial restitution of 120 bitcoins alongside millions of Norwegian kroner.

Also read: High Tax Slows Bitcoin Development In Norway

Norwegian Prosecutors Demand Bitcoin Payment From Accused Cannabis Dealers

Norwegian Prosecutors Seek 120 Bitcoins in Court RestitutionsIn the summer of 2015 three men were arrested in the greater Oslo region for operating an online drug operation and an indoor cannabis farm. Norwegian police seized a “considerable amount of narcotics” claiming they were being sold on darknet marketplaces including the original Silk Road. Richard Beck Pederson, a prosecutor in the case, told the press the group of men used bitcoins for transactions to give themselves a level of anonymity.

Interestingly the Norwegian prosecutors are seeking 120 bitcoins (US$144,300) and 3.1 million Norwegian kroner ($360,167) for penalties tied to the charges. Beck Pedersen detailed the cannabis dealers were caught selling the bitcoin during the investigation and police have “evidence for the sale in bitcoins.”

The case marks the first time a country’s prosecution department has demanded payment in bitcoin. However, prosecutor Beck Pedersen told the local press the act does not mean the state recognizes bitcoin as legal tender.

“This is in no way an official Norwegian recognition of the digital currency,” Beck Pedersen told local reporters.         

Bitcoin in Norway Has Been Considered an Asset and Is Now VAT-Exempt 

Norwegian Prosecutors Seek 120 Bitcoins in Court RestitutionsNorwegian investigators spent over two years on the “challenging” probe said the prosecutor. Beck Pedersen also detailed the country’s prosecutors worked with international law enforcement officials during the case as well. Evidence from the case had shown many links to the Silk Road marketplace before it was shut down in 2013, Beck Pedersen explained.

Norwegian prosecutors did not disclose why they are seeking some of the penalties in bitcoin. The trial against the three men is expected to begin at some point this year, the prosecutor added.

Norway has already stated how the country defines bitcoins under Norwegian law. The Norwegian Tax Administration (NTA) detailed in December of 2013 that the country considers bitcoin an asset and not a form of money. Norwegians at the time were subject to a wealth tax, and when used by merchants bitcoin was also subject to the country’s sales tax regulations.

This year the Norwegian Ministry of Finance asked the NTA to consider bitcoin transactions Value-Added-Tax (VAT) exempt. The country’s tax agency subsequently ruled in favor of this decision this past February and Norwegian bitcoin transactions are now VAT exempt.

What do you think about the Norwegian prosecutors demanding restitution in bitcoin? Let us know in the comments below.


Images courtesy of Shutterstock, and Bitcoin.com.


Have you seen our new widget service? It allows anyone to embed informative Bitcoin.com widgets on their website. They’re pretty cool and you can customize by size and color. The widgets include price-only, price and graph, price and news, forum threads. There’s also a widget dedicated to our mining pool, displaying our hash power.

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Bitcoins & Gravy EP #90: Bitcoin Depot ATMs come to Nashville!

On today’s show I am privileged to be speaking with Landon Thomas, the Vice President of Bitcoin Depot the second largest Bitcoin ATM company in the U.S. Bitcoin Depot is now actively looking for prime locations in the Nashville area where brand new, state of the art Bitcoin Depot ATM?’?s will be installed. In this episode you?’?ll learn how you can take part in helping Bitcoin Depot find prime locations throughout the U.S. and how you can earn a healthy finder’s fee for doing so!

CREDITS & VALUABLE LINKS:

https://www.bitcoindepot.com

https://www.cashtocrypto.com

http://diaryofafreelancetranscriptionist.com

TRANSCRIPTIONS:

Great news listeners! Our transcription page is now live on the website thanks to the continuing hard work of one of our loyal listeners who is also a consultant to the show.

These Professional transcriptions are provided each week by one of our fans who can be found at:http://diaryofafreelancetranscriptionist.com

Ode To Satoshi (The Official Bitcoin Song)

Ode to Satoshi lyrics & melody by John Barrett
Copyright 2014 RJM Publishing – BMI Nashville.

Lead Vocal, Harmonica, Snare Drum: John Barrett
Harmony vocals: John Barrett, Connie Sinclair and Lij Shaw
Guitar: Jonathan Brown
Mandolin: Ben Miller
Bass Guitar: Michael Rinne

Initial tracks recorded by Mark Thornton of Sidekick Sound Studios, Madison, TN. All other tracks Recorded, Mixed and Mastered at The Toy Box Studio, Nashville, Tennessee
Engineer: Lij Shaw. Assistant to engineer: Don “The Don” Bates
Produced by John Barrett & Elijah “Lij” Shaw

Special thanks to Alan Baird for his dobro, guitar and mandolin playing on many of the shows. Now that’s some pickin man! Thanks also to Alex Munoz Guijarro for his excellent pedal steel playing on many of our shows.

Interviews for this episode were recorded and edited by John Barrett at The Tree House Studio – Nashville, Tennessee. All shows produced by John Barrett with the moral support of his trusty sidekick Maxwell Rascalnikov CoyoTe Rex, aka Max.

Questions or Comments?

Email me to say Howdy!: howdy@bitcoinsandgravy.com

Visit the Website: http://BitcoinsAndGravy.com

Bitcoins and Gravy Tipping Addresses:

Bitcoin: 14RbXduu2sXKNHtKtRVAx8xQyGAubjY1dA

Litecoin: LgqYgxLTBPgr8C1JGLLJVLK4ZN1fveprAp

And if you don’t feel like contacting me, just kick back, relax and enjoy the show.I hope you enjoy listening to my guests as much as I enjoy talking with them!

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The Crypto Show with Lyn Ulbricht, Rick Falkvinge, Carlos Morales and Tim Bruton

This is two separate interviews done in Acapulco Mexico at the Anarchapulco 2017 conference. First off we talk with Lyn Ulbricht and Rick Falkvinge followed by Carlos Morales writer of Legally Kidnapped a case against the CPS. Tim Bruton a Crypto Show listener also joins the conversation.

Sponsored by: Dash, CryptoCompare Bitmain and Defense Distributed

Links

TheCryptoShow

FreeRoss

Social Media

The Crypto Show on Facebook

@TheCryptoShow

@The_Crypto_Show

@the_crypto_show instagram

The Crypto Show YouTube

Tip with Crypto

BTC: 139R6K7fxTYaFf2aXTid84Le1ayqMVvSCq

Dash: XqDeHnokQocBpvffsa2dWz8mX7oTKpoKzc

LTC: LUTJtk4QqXLiDkK8pDKK3jM73VVwbp7oSr

Doge: DQBJ7PSpFzUTwpBrny46Kug4BW8AGtq1YQ

LTBC: 1CevFxMT6srBtTkWx2qrNaJmjtgxbo7pBA

ETH: 0x10cfd6916832566e82b3ab38cc6741dfd7e6164f

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Bitcoin Mining: A Closer Look Under the Hood

Bitcoin mining is an integral part of the cryptocurrency’s infrastructure. The operation helps process transactions, creates new bitcoins and submits the validated transactions to the publicized and immutable distributed ledger.

Currently, the network’s hashrate is running at a phenomenal 3,418,031,852 GH/s, strengthening the bitcoin architecture more so each and every day. But many newcomers hearing about bitcoin for the first time wonder, How does bitcoin mining actually work?

Also Read: Bitcoin’s Rocket Boosters on Full Throttle as Price Skyrockets to New ATH

Bitcoin Mining: How it Works

Bitcoin mining requires the use of a specialized mining computer and software to solve mathematical equations. Miners consist of individuals or organizations running this software who compete with each other to solve these puzzles.

Bitcoin Mining: A Closer Look Under the Hood
A mining device and cgminer software.

When people transact with bitcoin, all of the network’s nodes share information about new transactions in a transaction queue called a mempool. Blocks of transactions are not accepted into a blockchain’s ledger until miners perform a hash function solving the puzzle, which in turn verifies the legitimacy of transactions contained in that specific block. This means miners can try and mine blocks of transactions by hashing (attempting to solve the equation) from a string of numbers and letters.

Bitcoin Mining: A Closer Look Under the Hood
An example of a hash function. Hash functions are cryptographically irreversible. Inputs can be any length, but output strings are always predetermined. If any changes are made to the sentence such as— Visit News Bitcoin.com for the latest bitcoin “articles”— the output string of alphanumeric digits would also change.

A miner solves the problem with another string of random digits by computing a lucky hash result which is followed by a reward of 12.5 bitcoins and all the transaction fees as well. Hashing requires significant processing time and resources to solve these problems. Deciphering the cryptography in a hash function is not easy and requires brute computational force. All of the miners simultaneously trying to solve these problems create the network’s hashrate. Once a puzzle is solved by the miner the result is called proof-of-work.

The mathematical puzzles solved are impossible to predict without overcoming the difficulty of finding a particular hash value. Mining rigs or devices that mine bitcoins continuously try and solve these puzzles over and over until miners get the correct answer.

The process not only incentivizes miners monetarily, but also ensures transactions are validated correctly. Every block also hosts the hash of the previous block mined before it. This, in turn, makes sure the system maintains an accurate chain of information which essentially becomes tamper resistant.

Let’s Recap:

  • Bitcoin transactions are sent to nodes.
  • Every node has a separate transaction queue called a mempool.  
  • Nodes relay the information. Some nodes can mine using specialized devices, ASIC chips and mining software, to solve equations while trying to find a block.
  • Solving these puzzles means miners are given a string of alphanumeric digits and they have to hash the string of digits with another random string that begins with multiple zeros.
  • Miners use lots of processing power trying to mathematically link (solve the equation) the strings of digits. Mining devices continuously hash (attempt to solve) these puzzles until a block is found.    
  • If successful at hashing a puzzle, miners are currently rewarded 12.5 BTC. Every four years the reward halves. 

Bitcoin mining can be hard to understand when you’re first introduced to the digital currency. But, once you get a grasp of the concept, it’s not so hard to understand the symbiotic relationship of mining and securing the network.

A more in-depth look at how mining works can be found here at our Bitcoin.com Wiki page.    

What do you think about the process of bitcoin mining? Let us know your thoughts in the questions below.


Images courtesy of Shutterstock, and Bitcoin.com.


What’s the quickest way to see the current bitcoin price in your local currency? Click here for an instant quote.

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Bitcoin Miner Repays Customer Who Accidentally Paid 2.5 Bitcoins Transaction Fee

A customer of Bitcoin hardware and service provider Bitmain recently found himself in a “rather embarrassing” predicament. Accidentally having paid a 2.5 bitcoin fee on a transaction mined by Bitmain’s Antpool in Bitcoin block 456363, the user took to social media, desperate to get the funds back. 

Also Read: How Much Does it Cost to Run a Full Node?

The fee, after having already been dispersed to miners as a mining reward, could have been lost forever. But instead, Bitmain decided to compensate the user for the loss with their own money. In a reply to a service ticket submitted over the issue, Bitmain notified the client of their decision.

Dear Customer,

We are sorry to hear this…

Bitcoin Miner Repays Customer Who Accidentally Paid 2.5 Bitcoins Transaction FeeFirst of all, this mistake caused by himself, and we don’t have responsibility for this. And since now, Antpool has taken PPS+ and PPLNS+ payment method, so his 2.5 bitcoin transaction fee has already paid out to all the miners in Antpool. But thanks for all of your supports and unconditional trust for Antpool and Bitmain, our company has decided to pay his loss.

Looking forward to continuing to build your trust and bringing you more added values through our advanced technology and passion.

Best Wishes,

Hugh

Bitmain

Hardly the first Bitcoiner to Overpay a Transaction Fee

Regularly on social media, people recount their transaction fee nightmares. They nearly ubiquitously hope they can somehow get their miscalculated or ‘fat-fingered’ transaction fees back. In January, for instance, someone apparently paid 50 bitcoins in transaction fees. The sender might have mixed up the fee and the amount meant to be sent. In general, the average transaction fee is up more than 1,200% in the past two years.

Some users believe there could be a solution to overpaid transaction fees. When a Bitcoin user chooses a fee that is too low, for example, a transaction can be outright rejected. Many Bitcoiners suggest that, when a Bitcoiner pays a fee that is too high on a transaction, miners could similarly reject it.

As one social media commentator postulates, “Nodes should check that fees don’t exceed the average of the last 10 blocks highest fees. If it’s significantly higher, send a return message back asking for confirmation of the fee.”

He adds: “[This has] nothing to do with miners as it is on a node level, and in theory, a mistaken fee shouldn’t enter the network beyond the first node it reaches, which would hold it and require a signed message from the sender to confirm it is correct.”

Many Bitcoin wallets manage transaction fees so their users don’t have to bother.  

Bitmain Technologies Limited, based in China, specializes in custom mining chips, miners, and also runs a mining pool.

Miners refunding transactions is not completely unheard of, as ASIC miner refunded a more than 200 bitcoin mining fee paid by a customer approximately three years ago.

What do you think about Bitmain’s repaying of the transaction fee? Let us know in the comments below.


Images courtesy of Shutterstock, Bitmain, Getty Images


Now you’ve got your first bitcoin, where can you spend it? Well, the easiest place to try it out is our very own bitcoin.com Store. You’ll find everything bitcoin-related, from clothing to all kinds of accessories and much more. You’ll experience that “wow” moment all bitcoiners have felt after paying with bitcoin for the first time.

The post Bitcoin Miner Repays Customer Who Accidentally Paid 2.5 Bitcoins Transaction Fee appeared first on Bitcoin News.

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Legends Room Officially Launches Membership Sale

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

Las Vegas goes digital at exclusive gentlemen’s club

LAS VEGAS, Nevada — Legends Room, a unique gentlemen’s cabaret official opening next month, is pleased to announce the official kickoff of the sale of its lifetime digital membership token starting March 11, 2017.

Operated by Las Vegas club manager and promoter Nick Blomgren, hosted by UFC Hall of Famer Stephan Bonnar, and curated by the most famous adult star in the world, Asa Akira, the Legends Room aims to exceed all expectations for club life in Las Vegas.

“We have created an experience unlike any other club in Las Vegas,” Blomgren said. “Beautiful girls, amazing service and unparalleled exclusivity.”

In addition to traditional forms of payment, Bitcoin will be accepted for all services at the Legends Room, opening access to paying for just about everything in Las Vegas using the digital currency. Hotels, exotic cars, fantasy excursions, training with a UFC star and more.

Platinum lifetime memberships are on offer for $5,000 each, and Silver Memberships for $1,500. Sales, limited in perpetuity to 3,000 members, will run until April 15th, 2017.

Platinum members will receive $2,500 in drink and $2,500 in dance credits; Silver members will receive $500 in drink and $500 in dance credits for personal use. As a special touch, members who participate in the token sale will receive a personalized welcome video from a celebrity associated with the Legends Room.

Members will also enjoy 24-hour access through a private entrance, a reserved bar with a dedicated mixologist, a members-only menu, hidden conversation areas and ultra private rooms. Special evenings with some of the world’s most well known adult stars, the world’s most beautiful entertainers, and events with globally recognized personalities drawn from mixed martial arts, boxing, film, entertainment and music industries. Further privileges include access to discounted private airfares, exotic car rentals, hotel rooms, and car and limo services.

In addition to enjoying club benefits directly, members will also be able to rent or lease their memberships on a daily, weekly, or monthly basis, either privately or through the club’s concierge. Members can also trade their membership on multiple digital-currency exchanges.

Memberships can be purchased directly at www.legendsroomlv.com/MTO using 30 different types of digital currency such as Bitcoin, Ether, Dash, Blackcoin, and Dogecoin. Sales are also available via Cash and Wire Transfer, for further details and information on becoming a member of Legends Room please go to legendsroomlv.com.

About Legends Room
The Legends Room is the most exclusive club experience in Las Vegas. Members are privy to ultra-luxurious premises featuring a private lounge, celebrity hosts, distinguished clientele and, for the first time ever, use of cryptocurrency to purchase everything Las Vegas has to offer.

www.legendsroomlv.com

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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Review: Encyclopedia of Physical Bitcoins and Crypto-Currencies

At some point in the 7th Century BC, the measured round metallic objects we know and love as “coins” became our archetype for money. Fiat currency – paper tickets purporting to represent actual coins – emerged as its nemesis a millennia later. Our ancestors were not amused as their rulers engaged in the common parlor trick of shaving down and adding cheaper metals to our beloved coins, morphing them into what we appropriately refer to as “debased coins.” Yet long after the emergence of paper notes, coins remain the paradigm of money – whether popping from a block punched by Super Mario or ensconced in name of this website.

Also read: Bitcoin Nostalgia: Can Some Bitcoins Be Worth More Than Others?

So it should come as no surprise that in the pioneer days of decentralized digital currency, people felt the urge to cast their new money into physical coins.  We know little about how the first coins were forged thousands of years ago, but fortunately for us, Elias Ahonen has written the “Encyclopedia of Physical Bitcoins and Crypto-Currencies” to capture this important piece of crypto-history. In his highly detailed and exhaustive catalog of physical cryptocurrencies, Ahonen takes us on a journey from the very first attempts to produce these physical coins, cementing his place as one of the first ‘bitcoin historians.’  

Our story begins in late 2010. Understanding our emotional connection to physical coins, programmer and bitcoin acolyte Mike Caldwell first conceived physical bitcoins in his home outside of Salt Lake City, Utah. His idea was to embed tamper proof holograms with private keys into cylindrical metal washers, but he quickly realized that hiding a single hologram into a coin was a more elegant and cost-effective solution. Thus emerged the Casascius coin, which abbreviates the saying “call a spade a spade,” anthologized in Caldwell’s blog “You asked for change, I gave you coins.” These original Casascius coins contained 1 BTC each, and remain coveted artifacts of bitcoin history worth far greater than their nominal bitcoin price.

Review: Encyclopedia of Physical Bitcoins and Crypto-Currencies
A collectible 1BTC Casascius coin.

From here, a myriad physical bitcoins emerged, and Ahonen meticulously catalogs the lot of them. Using detailed photos, mintage numbers, and extensive background information, each coin tells its own story. Some come pre-funded, others with an address for the holder to later fund. Some represent events in Bitcoin history such as the collapse of Mt. Gox or the “$10,000 bitcoin pizza,”  others promote internet memes like the dogecoin from “Shibe Mint.”  Collectively, these coins represent the rich material history of early bitcoin and cryptocurrency that Ahonen has meticulously detailed in this book.

Physical bitcoins are not just for collectors. Through detailing the history of physical bitcoin and cryptocurrency, Ahonen digs into the effect of social networks within the physical crypto economy; explaining the value of reputation of physical crypto sellers in the marketplace and how that reputation translates to real value. Minters and traders often begin by trading small value coins before they develop the necessary trust for purchasing larger value coins, and coin traders known for their reputation command a higher perch in the marketplace.  Moreover, fraudsters and scam artists seeking to offload fake or deceptively billed coins are quickly revealed and reviled in the physical bitcoin community.  In this way, the healthy distrust of currency ‘debasers’ – which appears to have subsided in the dollar-system world of the 20th and early 21st century – emerges as a naturally occurring numismatic property.

Review: Encyclopedia of Physical Bitcoins and Crypto-CurrenciesMoreover, a physical bitcoin may be more alienable than digital bitcoin, and the physical bitcoin collector community could become an increasingly important part of the bitcoin ecosystem. With rising KYC barriers to bitcoin exchanges and increased transparency and surveillance of the blockchain by law enforcement and bitcoin compliance firms, transacting in physical bitcoin may be a way of transferring value without alerting the blockchain that a transfer of value has occurred. One Casascius coin can be traded thousands of times without triggering any verifiable transaction on the blockchain. Due to this property, it seems likely that as surveillance and mapping of wallet addresses in the blockchain increases, so too will the value of physical bitcoins relative to their digital peers.

For his part, Ahonen acts not only as historian but as evangelist. After getting burned in the digital bitcoin space in Mt. Gox and other boondoggles, Elias found refuge in physical bitcoin buying his first brass Casascius coins in 2013. Today he has amassed a valuable collection, turning his focus to promoting the community through zealously and tirelessly championing his encyclopedia. Last April, after a signed copy was lost en route to Singapore, Ahonen flew to the buyer from Canada to personally sign a copy.  This form of physical couriering is common in the physical bitcoin world, and this is not Ahonen’s first international journey to trade or promote his life’s passion.

So whether you are a collector who remembers the early days of bitcoin, want to learn about physical crypto, or are simply a bitcoin enthusiast, this book belongs on your coffee table. To Ahonen, “[t]he concept of digital currency that is based on mathematical principles is simply revolutionary, and will in one way or another eventually reshape the world and society in which we live.  These coins are artifacts of that future.”  And now, so too is this Encyclopedia.

This review was written by Elias Ahonen and Zachary Kelman.

What do you think about physical bitcoins? Let us know in the comments below.


Images courtesy of Shutterstock, and Pixabay. 


How much do you want to know? Bitcoin.com has live data feeds with the latest world price indexes and trends (in three currencies) plus statistics on all the interesting facets of the bitcoin network.

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