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Physical Bitcoins Meaning

Physical Bitcoins are tangible objects, usually metal coins, that contain a digital Bitcoin private key hidden under a tamper-evident seal. The most famous example is the Casascius Coin. The idea was to create a physical manifestation of digital money that could be passed from hand to hand just like a gold coin, allowing for offline transactions without needing a computer or an internet connection.Technically, a physical bitcoin is a bearer instrument.

Whoever holds the physical coin owns the digital Bitcoin inside it. The private key is printed on a small piece of paper or a card tucked inside the coin.

To redeem the Bitcoin, the owner must peel the hologram seal, which reveals the key but also breaks the physical security of the coin. Once the seal is broken, the coin loses its premium value as a collectible, as anyone who saw the key could have copied it.Today, physical bitcoins are numismatic treasures.

Because the US government forced creators to stop minting coins with digital value years ago, the surviving unpeeled coins have become incredibly rare. Collectors pay a premium far above the actual price of the Bitcoin inside, treating them as pieces of cyber-history.

There are even versions of these coins where the creator intentionally destroyed the private key, turning them into art pieces with no digital value.The risk of physical bitcoins is counterparty trust. When you buy a physical coin, you are trusting that the creator didn't keep a secret copy of the private key.

If the creator was dishonest or their database of keys was hacked, they could empty all the coins remotely, leaving the physical holders with nothing but worthless pieces of metal. This is why self-generated physical wallets, where the user prints the key themselves, are considered a safer version of this concept.

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Finery Markets BVI Limited (“Finery Markets”) provides software, technology infrastructure, and related Information and Communication Technology (ICT) services on a Software-as-a-Service (“SaaS”) basis. Finery Markets acts solely as a software vendor and does not operate a trading platform, does not intermediate, match, execute, clear, or settle transactions, and does not engage in any activities that would require regulatory authorisation under applicable laws.

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