Content of the article:
How physical Bitcoin works
Bitcoin is a digital cryptocurrency. It differs from traditional fiat money in that its officially recognized physical face value does not exist.
All fiat money is made in mints of the respective state. Even if a state does not have its own mint, but there are also such states, they make coins at mints of other states. In any case, the issue of coins is under the close control of the state issuing the coins. Yes, and the mint does not make sense to spoil its reputation. They clearly fulfill the order. They print as many coins and banknotes as they order.
Bitcoin, like other cryptocurrencies, is a decentralized cryptocurrency. There is no single issuing center, that is, one mint where Bitcoin coins are minted. No one can control the release of Bitcoin again because of its decentralization.
Rather, the release of Bitcoin is controlled. But it is not controlled by a person or a group of persons, and not even by the state with its authorities. Bitcoin emission is controlled by its program code.
No one, not one miner, can issue more Bitcoin than is provided by the program code. Every 10 minutes in the world one Bitcoin block is processed, for its mining the miner now receives 12.5 BTC. Thus, the release of Bitcoin is controlled by its program code. But the program code cannot produce a physical coin and cannot instruct the mint to mint such a coin.
As soon as Bitcoin appeared, people began to think about the fact that it would be nice to have a physical version of Bitcoin, a kind of coin that would be exchanged for goods and services, as happens with fiat money.
But here, along with the many advantages of owning physical money, many shortcomings arose.
Physical Bitcoin: advantages and disadvantages
The fact that Bitcoin should have its own physical analogue to the crypto community began to think almost immediately after the advent of cryptocurrency.
After all, not all people know what digital currencies are, they know how to use wallets and exchanges.
It would be much more convenient for people if digital currencies were in physical circulation and would have a convenient physical form. This would help to popularize digital currencies around the world.
Digital currencies are decentralized. They do not have a single release center, a kind of mint. Miners mine digital coins. Thus, any miner, if desired, can appear as a kind of mint and start issuing their physical coins.
Theoretically, releasing physical bitcoin is quite simple. The BTC physical coin is a Bitcoin account with a public and private key.
But here 2 problems arise immediately:
- Bitcoin physical coin gives only access to the wallet. By itself, it is not a means of payment and without a mobile wallet it has no power. That is, if you do not have access to the wallet, then you can not use the coin.
- distrust of users. Payments in Bitcoin occur in an environment where no one trusts anyone. There is no guarantee that there is money on the wallet that is indicated on the coin, and that the private key that is in the coin actually matches the wallet.
The following solutions were proposed to existing problems.
Unfortunately, without a device connected to the Internet and a cryptocurrency wallet, the problem cannot be solved.
A Bitcoin coin or banknote, and there are coins that have collectible value, as well as simple paper or plastic banknotes, without access to the Internet has no practical value.
To use a coin and buy something for Bitcoin, you must enter the private key. A Bitcoin coin or banknote is tied to a cryptocurrency wallet. All payments using a physical coin or banknote come from the wallet. In this case, after payment, the coin itself ceases to exist. That is, physically it exists, but there is already no money on it.
The second problem was solved as follows. It was necessary for users to have confidence in the issuer of the coin. And trust is achieved only through verification.
Trust but check.
Therefore, registers of issued coins and banknotes began to be kept. Each coin and banknote had its own registration number and by number it was possible to check. how much money is on the coin and whether this coin was used and canceled.
Holograms began to be installed on the coins, which changed color after they were opened. And the closed code to the wallet was stored under the hologram. That is, it was clear that the coin was already used.
A similar situation with banknotes. The private key was kept under the protective film and if the film was damaged, then the banknote was used and it no longer has any value.
Thus, all Bitcoin coins and banknotes are disposable and after their use they lose all their value.
The main types of physical coins
Since the advent of Bitcoin, crypto enthusiasts from around the world began to think about the possibility of creating a physical version of the cryptocurrency.
Unfortunately, so far, Bitcoin coins have more collectible value than practical. With the increasing popularity of cryptocurrencies, a large number of souvenir products have appeared, that is, coins on which there are no funds and which are not tied to a cryptocurrency wallet.
Moreover, souvenir products can be of different quality. There are souvenir coins made of gold and silver of high fineness, which have individual numbers and are made by special order. Such coins have more jewelry and collection value, as they are made of expensive metals. At the same time, there are coins tied to wallets containing Bitcoin, as well as coins without funds, which are essentially souvenir or jewelry products.
In 2013, US judicial authorities banned the creation of Bitcoin coins. Such activity is contrary to the state monopoly on the production of banknotes and is illegal.
In the Russian Federation, the creation of banknotes is also the prerogative of the state. Similar legislation exists in most countries of the world. Banknotes are allowed to print only the state.
The creation of physical Bitcoin coins is very controversial from a legal point of view and contradicts the state monopoly on the issue of banknotes.
In 2011, US miner Mike Caldwell decided to create physical Bitcoin coins.
For the digital coins he obtained, he decided to create physical analogues and sell coins to collectors. Coins were issued in different denominations, made of various materials. Coins of low denomination were made of brass, higher denominations were plated with gold, and also made of silver and even gold.
Each coin was tied to a cryptocurrency wallet, on which there was an amount corresponding to the face value of the coin. Each coin had its own individual number. Under the hologram there was a closed code to the wallet. After the hologram on the coin was opened to see the code, it changed its color, and the coin was canceled. Thus, it was evident that the coin had already been used. A register of coins is maintained https://casascius.uberbills.com/
After examining this registry, you can note that a large number of coins were not cashed. Part of the reason is that the coins could be cashed on the Mt.Gox exchange, which is now bankrupt. Thus, at the moment, all coins have only collectible value.
In 2013, the US authorities banned the work of issuing Bitcoin coins, and the activities of Mike Caldwell were declared illegal.
Externally, the coins resemble casino chips. This is a Japanese project with a Buddhist theme.
Unfortunately, this coin befell the fate of Casascius coins. Due to the hacking of the Coincheck exchange, on which it was possible to exchange coins for fiat money or crypto currency, the issue of coins stopped.
A hologram covers the coin, which is a kind of seal. Under the seal is the QR code of the cryptocurrency wallet's private key. Coins are stored on this wallet. After entering the code, the coins in the wallet are activated, the seal is destroyed and the coin itself becomes inactive.
Each Titan Bitcoin coin has its own unique code. Each coin has its own website. A personal code is attached to the coin, by entering which you can activate the coin on a personal website.
Coins have collectible value. They are made in a limited series, each coin has its own unique number. This product is intended for gifts and for collectors.
Coins were discontinued in 2016. There are gold and silver versions of the coin, which have value, including due to the precious metals used in them.
Such coins are intended for collectors and numismatists.
Coins come in two series. There are empty coins that have exclusively souvenir and collection functions and which have no money. There are coins on which Bitcoin is loaded.
The hologram on a coin with Bitcoin has an open part of the code, by which you can check how much money is on the coin. After opening the hologram, the private key to the wallet appears. The hologram itself is destroyed.
Thus, it is clear that the coin is opened (activated) and there is no more money on it.
This is not a coin, this is a USB flash drive on which the private key is generated. This flash drive works like a piggy bank. You can accumulate coins on it. When the wallet is fully cashed, the protection is destroyed and the coin is canceled.
In numismatics, there are collectible coins dedicated to some event in the life of the state or society, a great man, sports events, for example, the Olympics. Such coins are most valued by numismatists.
The developers of ANTANA went along this path. They created coins that are dedicated to any events in the life of Bitcoin. Each series of coins is limited. The purpose of the project is to show the development of Bitcoin, its main milestones, the complexity of the network. With these coins, collectors will be able to track the history of Bitcoin.