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.
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.
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 btc 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.
Moreover, 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, “The 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.
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Review: Encyclopedia of Physical Bitcoins and Crypto-Currencies