Auction Highlights

F R O M T H E P C G S G R A D I N G R O O M Physical Cr yptocurrency Tokens

B y Ky l e K n a p p

Some of the most exciting pieces to come through the PCGS Grading Room in recent months include the headlinemaking physical Bitcoins that have become a newly familiar sight at numismatic auctions and events. Among these is the famous “1000 Cas” Casascius gold piece containing 1,000 BTC. Presently, PCGS grades intact, unredeemed physical cryptocurrency tokens issued by Casascius, Lealana, and BTCC, and unused or redeemed shells by those manufacturers.

2013 Casascius 1 BTC Brass, PCGS MS65. Courtesy of PCGS TrueView.

Physical cryptocurrency tokens conceal the private keys necessary to redeem their value beneath a holographic sticker designed to degrade upon peeling. While a digital currency may at fi rst appear antithetical to the tangibility which is a fundamental thrust of traditional numismatics, the story is in fact one of shared origins. Both circulating currency in its bimetallic form and the integrated, double-entry ledger system underlying all modern banking and credit systems are historically rooted in the goldsmithing trade. Most cryptocurrencies seek to solve the same set of problems around immutability, acceptability, and value stability that have plagued nearly all attempts to devise a frictionless medium of exchange.

Private attempts to meet the demand for both increased quantities and varied types of circulating coinage have carved some of the most picturesque valleys in the numismatic landscape, from John Chalmers’ silver pieces of Confederation-era Maryland to the pioneer gold issues of the American West. While these issues base much of their claim to value on their metallic content, their paper equivalents – in the form of warehouse receipts, bullion deposit records, and many ill-fated private banknotes – paved the way for global capitalism’s development. Largely folded into the realm of offi cialdom in the recent era, the currency makers’ travails with counterfeiting, fl uctuating relative values, and exchange liquidity provided thought-provoking ground for study and refl ection, out of which have risen several alternative blueprints for currency construction.

1783 1783 Jo Johnhn C Ch ha al lmer mers s Sh hi ill lling ing, , PCGS PCGS AU53. AU53. C Ch ha al lmer mers s was a was a goldsmith in Confederation Annapolis. Courtesy of PCGS.

“Token” is the proper numismatic term for any piece that is denominated but not struck under a sovereign authority. Casascius and other makers of physical cryptocurrency tokens seek to combine the allure of tactility with what their advocates believe is a better solution to the anti-counterfeiting and infl ation-management problem, in this case via the use of a public ledger and pre-defi ned supply. As such, they fi t nicely into the historic arc of numisma as something which will always in the end derive its value from the consent of its users. Th e ubiquitous change in our pockets today is in fact comprised of physical-token claims on a diff erent ledger, that of the Federal Reserve.

An avid childhood collector, Kyle fi rst came to Collectors Universe in 2005 as a grading intern while in high school. Now a senior member of the grading and authentication team, some of his favorite coins include the Nova Constellatio coppers, Flowing Hair Dollars, and Flying Eagle Cents.