Are Physical Bitcoins Legal?

With extensive experience as an electrical/software/coding engineer along with having a diverse financial background, Thomas Wettermann’s areas of interest include Machine Learning (ML), artificial intelligence (AI), and Financial Technology (FinTech). For the past few years, Thomas Wettermann has focused on the underlying technologies that support and promote all phases of cryptocurrency, Web 3.0, and metaverse ecosystems.

How to Confirm a Physical Bitcoin’s Authenticity?

You can submit physical Bitcoins to third-party certification services, such as the Professional Coin Grading Service (PCGS), for authentication and grading. For example, a 1,000 BTC Casascius coin recently submitted to PCGS was graded as "PCGS Proof-70 DCAM."

This grading means that this particular Casascius coin was in perfect condition, had zero imperfections, and had “all features and fields exactly as the engraver and mint intended.” Aside from third-party certification, you can also review the status of certain physical Bitcoins on active online websites that track whether certain physical Bitcoins are still active (unpeeled).

For example, if you are interested in purchasing a Casascius coin, you could look up its Bitcoin address on the Casascius Tracker, which tracks each coin and provides information including whether the coin has been redeemed.

Are Physical Bitcoins Legal?

No law specifically prohibiting holding physical bitcoin has been identified. Holding physical Bitcoin is legal in the US.

However, some countries might have general cryptocurrency restrictions that relate to holding physical Bitcoin. For that reason, it's safest to check your local regulations before you purchase or own a physical Bitcoin containing Bitcoin value.

In addition, at least in the US, it appears that the distribution of physical Bitcoins may violate federal laws relating to money transmission.

Conclusion

Physical Bitcoins may appeal to crypto enthusiasts for many reasons, from collectability to maximum transaction privacy. But before you purchase any physical Bitcoins, remember the crypto mantra: "don’t trust, verify." That is, use a certified coin expert to verify the authenticity of any physical Bitcoin that you are considering purchasing.

Such a third party may also confirm that the physical Bitcoin is indeed still pre-loaded or pre-funded by the proper amount and that the coin has not been tampered with. Alternatively, online blockchain sources can help you confirm that the physical Bitcoin has not already been redeemed.

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