Satoshi Nakamoto described Bitcoin as “a network based digital currency”. But what happens when bitcoins are made tangible?

Casascius Coins

On January 7, 2011, Mike Caldwell asked himself the same question and posted a proposal on bitcointalk.org to create a physical Bitcoin token. In his proposal he suggested that “it needed to be a physical medium of exchange that can be entirely conveyed just by passing it to other persons”.

A few months later, on September 6, 2011, Mike Caldwell announced his brass “Casascius” physical bitcoins as real bitcoins, each worth 1 BTC.

In order to redeem the BTC you would have to peel the hologram and import the private key into your Bitcoin wallet. Peeling the hologram leaves behind a honeycomb pattern on the coin which makes it impossible to redeem the BTC without destroying the hologram. This was one of the security measures to prevent people from selling redeemed coins and passing them off as still being loaded.

Owning Casascius coins does mean that you’re trusting a third party with generating your private keys, although there have been zero issues with redeeming Casascius coins to this date. Mike Caldwell also posted an extensive statement on his website explaining how the private keys were generated and destroyed:

“After the addresses have been generated and printed to paper, the entire operating system installation is completely destroyed by booting the machine to a Linux Live CD, and executing cp /dev/zero /dev/sda until the command reports "No space left on device”. This procedure is repeated three times. Afterwards, the drive is typically overwritten with a new operating system, and used for some other temporary purpose”.

— Mike Caldwell

In the next few years Mike Caldwell released several different Casascius coins and bars, ranging from a loaded value of 0.1 BTC to a staggering 1000 BTC. Mike Caldwell has inspired many others into designing and creating their own physical bitcoins, resulting in a wide variety of coins. Some designs could be called knockoffs while others were highly original and progressive.

Kialara Coins

In 2014 Maxfield Mellenbruch, an artist and collector of Casascius coins, became transfixed with the idea of technology as an expressive medium and created the “Kialara” physical bitcoin.

Unlike the Casascius coins, Kialara bars where sold unloaded with a pregenerated private key under its tamper proof hologram. Maxfield Mellenbruch told buyers, who wanted to fund their bars, that all he could give them was his word. He also told them that people are better off creating their own paper wallets if they wanted to hoard bitcoin and he denominated the bars with “only” 0.1 BTC with the buyer’s peace-of-mind in mind.

Due to its build complexity you would have to destroy the Kialara bar in order to redeem your loaded value.

Maxfield Mellenbruch went on to create a wide range of different Kialara physical bitcoins, including DIY versions that allowed buyers to generate their own private keys and load the bars themselves. Kialara bars ended up being highly sought-after items by physical bitcoin collectors, even ending up in the hands of Kim Kardashian, Steve Wozniak and Bill Clinton.

BTCC Coins

Another very unique coin to mention are the coins made by BTCC, a well-known company that started out as a bitcoin exchange. In 2016 they announced their physical bitcoins made from titanium. The design of the coins looked fairly simple and similar to Casascius coins; a big Bitcoin logo on the obverse of the coin and an embedded private key, printed on a piece of paper, covered by a tamper proof hologram on the reverse.

What made the BTCC coins unique is that the company used their own mining pool to fund the coins directly from the block reward. BTCC even ended up creating 2 versions of physical Bitcoin blocks, funded with 25 BTC (pre-halving) and 12,5 BTC (post-halving).

Physical bitcoins are great for starting conversations and introducing people to Bitcoin, because you have something tangible to show them.

In fact, Casascius coins are responsible for introducing me to Bitcoin in late 2013.

As a longtime “regular” precious metals collector I ran into Casascius coins on a forum. At first I was a bit hesitant since they looked like simple brass tokens and I had no idea what Bitcoin was. After reading the Bitcoin whitepaper and Satoshi’s archived e-mails I became highly intrigued by the idea of combining scarcity with a decentralized digital asset. I ordered my first physical bitcoin, a brass 0.5 BTC Casascius coin, and spent more time learning about Bitcoin’s fundamentals.

In 2015 I got invited to an IRC channel, dedicated to bitcoin collectibles, where I learned a lot more about the world of physical bitcoins. I decided to sell most of my precious metals for bitcoins and use them to buy and trade physical bitcoins, which is a decision I never ended up regretting. Over the years I have acquired beautiful collectibles, made a lot of new friends, and met very interesting collectors. I even ended up buying a Casascius coin from Charlie Lee, the creator of Litecoin.

Being involved with Bitcoin has absolutely changed my life, and while not being able to contribute to Bitcoin development, I wanted to give something back. In 2019, a friend and I launched www.spending-bitcoin.com, a directory of online stores accepting Bitcoin payments. We wanted to create a place where online stores, big and small, could list their business for free without having to worry about paid listings, advertisements or malicious content. I’ve done translations in the past for projects like ACINQ’s Phoenix Wallet, BTCpay and other projects. I’m also currently working on the Dutch translation of Saifedean Ammous’ “The Bitcoin Standard”, which feels like a huge honor to be part of.

Learning about Bitcoin has been an incredible life experience so far and I’m truly looking forward to the years to come.

Feel free to DM me on Twitter (@m__btc) if you need advice about buying your first physical bitcoin or if you simply want to learn more about them. As a longtime collector I’m more than happy to answer any of your questions or introduce you to other collectors!