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What Are Casascius Bitcoins and Why Are They So Expensive?
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. The story behind these extraordinary pieces is a fascinating one.
Caldwell created his first round of Casascius physical bitcoins in September 2011, hoping they would serve as a “proof of concept, a conversation piece to help people talk to others about Bitcoin.” What sets the early Casascius models apart from other physical representations of Bitcoin is that they contain redeemable BTC. The private key resides beneath a hologram layer imprinted on the coin. Only when this hologram is removed or “peeled” can the virtual contents of the coin be accessed.
The Casascius Bitcoins took off after being launched on BitcoinTalk, quickly gaining popularity. Caldwell produced ₿ 10, ₿ 25, ₿ 100, and even ₿ 1,000 versions, including gold bar lookalikes. Such a move may seem like a gamble today, considering the current market prices; however, at the time, Bitcoin was trading for around $10, making it less of an undertaking.
Caldwell’s production line came to a sudden halt in November 2013 when 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 decided to cease making these BTC-filled versions, effectively ensuring that all pre-November 2013 coins and bars were given an extra layer of rarity, resulting in increased demand and value.
A tracking website, Casascius Bitcoin Analyzer, shows that only 9,689 out of the total 27,834 items produced by Caldwell prior to November 2013 have been opened, which translates to just over a third having had their innards removed. This means that an astonishing two of Caldwell’s five flagship ₿ 1,000 bars remain unpeeled, now worth a staggering $92 million each.
The Casascius coins occasionally appear on eBay and other platforms, with the pre-2013 editions naturally going for an enormous premium. Most of the peeled coins were opened prior to 2013, but some have managed to hold on longer: the most recent peeling took place in October this year. With over 65% of his originals still untouched, it is fair to say that the legacy of Caldwell’s first and best physical bitcoins will continue to be felt for a significant period.
It can be said that the Casascius Bitcoin’s value stems from their unique nature and rarity, which was artificially created by Caldwell’s decision to cease production.
Source: fullycrypto.com
