- Casascius Bitcoins are the only truly valuable physical bitcoins in existence
- Launched in 2011 and banned in November 2013, they contain portions of real Bitcoin
- What’s the story behind these amazing pieces?
Casascius Bitcoins are the Faberge eggs of the cryptocurrency world. The brainchild of Utah resident and Bitcoin fan Mike Caldwell, these early physical representations of Bitcoin were widely available from 2011 until the US government stepped in and called a halt to the operation in 2013. But what exactly are they, and why did they cause such a fuss?
Physical Bitcoins with a Difference
Physical interpretations of Bitcoins have been doing the rounds for years, with current iterations being cheap metallic representations, but it wasn’t always this way. Caldwell created his first round of Casascius physical bitcoins in September 2011, hoping they would be “a proof of concept, a conversation piece to help people talk to others about Bitcoin.”
What marks the early Casascius models out from all others is that they contain redeemable BTC, with the private key residing underneath a hologram layer imprinted on the coin. Only if this hologram is removed or ‘peeled’ can the virtual contents of the coin be accessed.
Casascius Bitcoins Take Off
Caldwell launched his coins on BitcoinTalk, and they became quickly popular, with the American producing ₿10, ₿25, ₿100, and even ₿1,000 versions, including gold bar lookalikes. Such a move may seem a gamble at today’s prices, but at the time, Bitcoin was trading for around $10, so it wasn’t as much of an undertaking.
Caldwell’s production line was brought to a swift halt in November 2013 when the Financial Crimes Enforcement Network (FinCEN) informed him that selling the items with the BTC inside them qualified him as operating a money transmitting business, necessitating registration at the federal level and potential state licenses.
Wisely, Caldwell opted to cease making these BTC-filled versions, ensuring at a stroke that all pre-November 2013 coins and bars were afforded an extra sense of rarity, with the resultant increase in demand and value.
Only 34% Peeled
A tracking website, Casascius Bitcoin Analyzer, shows that 9,689 of the 27,834 items produced by Caldwell pre-November 2013 have been opened, meaning just over a third have had their innards removed. Only two of Caldwell’s five flagship ₿1,000 bars remain unpeeled, now worth a staggering $92 million each.
Casascius coins appear on the likes of eBay now and again, with the pre-2013 editions naturally going for a huge premium. Most of the peeled coins were opened prior to 2013, but some have held on longer: the most recent peeling took place in October this year.
With over 65% of his originals still untapped, it’s fair to say that the legacy of Caldwell’s first and best physical bitcoins will live on for some time yet.
