If you want to get your hands on some cold hard bitcoins — literally — you’re in luck. The Utah entrepreneur who mints metal versions of the world’s most popular digital currency is at it again.
Mike Caldwell shut down his bitcoin mint last month, after the federal agency that regulates money transmitters started asking him questions, but on Tuesday, he said he was reopening his Casascius Coins business — with some changes. He’ll still sell his real-world bitcoins, but it will be up to individual customers to actually back these physical coins with digital currency.
Caldwell is making the move in response to a November 15 letter from the Financial Crimes Enforcement Network, or FINCEN, the Treasury Department agency that interprets federal anti-money laundering regulations. The agency said that he was required to register as a money transmitter and had not done so. “FINCEN decided that I was a money transmitter,” he says, “and I didn’t want to argue with them.”
Bitcoins are basically addresses on the internet, and if you own some, what you really own is a private cryptography key that lets you spend them or move them or send them to someone else. It used to be that if you wanted some Casascius physical coins, you’d send Caldwell some bitcoins and then he’d mail off the metal coins with a private key engraved in them, hidden behind a tamper-resistant seal. Once the metal bitcoins were in your hand, Caldwell would fund them so that those private keys could be used to unlock digital currency.
Now, it’s up the customer to fund the physical coins themselves, and things could get confusing. In addition to selling unfunded coins through the mail, Caldwell will still sell pre-funded coins when he meets with buyers in person.
He says that to make things clearer, he’s going to make a new series of coins for his unfunded coin business, so buyers can tell the difference. Unfunded coins will quote marks around their denomination ( “1″ bitcoin, as opposed to 1 bitcoin), and they won’t have a denomination lasered into the hologram on the back of the coin. Producing these new coins should take another four-to-six weeks, Caldwell says.
That said, he isn’t sure how much interest there will be in the face-to-face sale of funded coins. “It is hard to estimate how many people will jump on a plane just so they can get a version of a coin that differs in a negligible way.”
The changes might make his bitcoins a little less appealing, but Caldwell says it’s all for the better. It’s a lot of pressure being on the hook for real bitcoins, especially with big value orders. “I think it could do quite alright. I’m actually looking forward to it because it’s way less stress,” he says. “I don’t have to worry about them being lost in the mail.”
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