The Worth of Sats in the Age of Mechanical Reproduction
May 15, 2024 12:27 AM   Subscribe

In the same way a dollar is made up of 100 cents, one bitcoin is comprised of 100 million satoshis—or sats, for short. But not all sats are made equal. Those produced in the year bitcoin was created are considered vintage, like a fine wine. Other coveted sats were part of transactions made by bitcoin’s inventor. Some correspond with a particular transaction milestone. These and various other properties make some sats more scarce than others—and therefore more valuable. The very rarest can sell for tens of millions of times their face value; in April, a single sat, normally worth $0.0006, sold for $2.1 million. from Time Is Running Out in the Hunt for Rare Bitcoin [Wired; ungated]
posted by chavenet (42 comments total) 5 users marked this as a favorite

This feels like a sci-fi story where departed humanity's abandoned robots reinvent numismatism.
posted by entity447b at 1:22 AM on May 15 [23 favorites]

Anyway, here's someone searching through a bag of £250 worth of 50p coins, which is less profitable, but entirely more edifying to watch.
posted by ambrosen at 1:25 AM on May 15 [5 favorites]

I hate how crypto keeps managing to be fractally stupid. Big Bitcoin mining companies setting aside the first and last "satoshis" in each batch because they're "special" and sell for several times their face value.
posted by straight at 1:30 AM on May 15 [17 favorites]

Yeah it's stupid but lots of human things are stupid when only viewed through the prisms of utility and function.

I'm not remotely into crypto, quite the opposite, but as a formerly very keen coin collector (the metal ones) I kinda feel like I'm just looking at collectors being collectors.
posted by deadwax at 1:45 AM on May 15 [7 favorites]

reading this shit and its ilk is like viewing the documents in the animatrjx that ends "Your flesh is a relic; a mere vessel. Hand over your flesh, and a new world awaits you. We demand it."
posted by lalochezia at 2:01 AM on May 15 [5 favorites]

I suppose all collecting is a little bit stupid from a certain angle, but typically it’s the benign and even endearing kind of stupid where it’s like ”hey, you do what makes you happy”. But with the specific circumstances surrounding Bitcoin (the massive energy consumption, all the techbro nonsense), attaching collectable value to some bits in a distributed ledger just doesn’t pass the sniff test anymore and IMHO lands in the realm of condemnable stupidity.
posted by jklaiho at 3:10 AM on May 15 [15 favorites]

This seems dumb. I've never gotten the point of stamp or coin collecting, and the amount of money wasted on them at the higher end has always been inexcusable, but at least a stamp misprint wasn't a scam that dumped tons of carbon into the air.
posted by The Manwich Horror at 3:20 AM on May 15 [3 favorites]

Every single time I think "This is it, this is a dumb as crypto bros can get." They find a new low.
posted by Paladin1138 at 4:20 AM on May 15 [11 favorites]

This is coin collecting. Like everything else about Bitcoin, it gets presented as this new and exciting thing but it's just a currency and the same stuff that happens with other currencies happens with Bitcoin too.
posted by VTX at 4:35 AM on May 15 [4 favorites]

The "don't yuck someone's yum" rule presupposes that they aren't taking a special delight in burning down your fucking house.
posted by SaltySalticid at 4:37 AM on May 15 [19 favorites]

Cool, so do you store them in protective plastic sleeves in binders or display them in lucite cubes?

I desire these in same way I want a Trump NFT.
posted by thecincinnatikid at 4:40 AM on May 15 [1 favorite]

That's the funniest thing I've seen for a while. Humans are gonna human.

It's just a mercy that protons are indistinguishable, or there'd be a collectors' market.
posted by Nancy Lebovitz at 4:44 AM on May 15 [2 favorites]

This is just NFTs again but with more steps.
posted by AlSweigart at 4:53 AM on May 15 [9 favorites]

The media reporting on cryptocurrency pyramid scams at face value is the media promoting cryptocurrency pyramid scams.
posted by AlSweigart at 4:55 AM on May 15 [6 favorites]

I mean, I kind of get it? I like palindrome numbers and the like, too. I’d say it
Was harmless, except for the environmental damage and human trafficking.
posted by GenjiandProust at 4:57 AM on May 15 [4 favorites]

It's just a mercy that protons are indistinguishable

As far as we currently know! Just you wait...
posted by VTX at 5:15 AM on May 15 [3 favorites]

Every time I hear/read "crypto", I'm like this is going to be even stupider than the last time, and I've never yet been wrong. As a card-carrying Straight White Guy, these evil clowns are a discredit to my entire race, in a way that your basic chuckling imperialist could only hope to emulate.
posted by outgrown_hobnail at 5:24 AM on May 15 [2 favorites]

very good title.
posted by doctornemo at 6:05 AM on May 15 [2 favorites]

Isn't all collecting just a pump and dump scheme perpetuated by people who already have a hoard of the rare things that are supposedly desirable?
posted by RonButNotStupid at 6:17 AM on May 15 [2 favorites]

Turns out NFT was a lie. It is all non-fungible. All of it.

The real question here, people, is what secret vendetta do bitcoin people have against mushrooms?
posted by NotAYakk at 6:25 AM on May 15 [1 favorite]

I’d say it was harmless, except for the environmental damage and human trafficking.

Human trafficking??? Did I miss that story?
posted by subdee at 6:39 AM on May 15 [3 favorites]

TL;DR: Some guy made up his own little mini-game on top of the bitcoin protocol that pretends to add serial numbers and then come up with reasons why some serial numbers are better than others. This is another case where something that is not a thing is reported on as though it were a thing.

Time Is Running Out in the Hunt for Rare Bitcoin

No, I'm not being flippant: Wired Magazine and Joel Khalili are literally promoting and endorsing a crypto scam here. This is a headline designed to sucker more people into the scam.

A small band of collectors is finding and collecting rare fragments of bitcoin worth many times the face value. But their window of opportunity is closing.

The sub-headline is also designed to lure more people into the scam and contains false information: there's no such thing as a "rare fragment of bitcoin".

In January 2023, computer scientist Casey Rodarmor released the Ordinals protocol, which sits as a veneer over the top of the bitcoin network.

Okay, so about a year and a half ago, some guy (his resume shows he has a B.A. in CS but no advanced degree, but "computer scientist" sounds better than "software engineer") added his own Excel spreadsheet and wants you to pay him to put your name in some of the cells, basically. This is the exact standard NFT scam, except reported straight on in May 2024. It is impossible that Joel Khalili doesn't know what he's doing by writing this story.

His aim was to bring a bitcoin equivalent to non-fungible tokens (NFTs) to the network, whereby ownership of a piece of digital media is represented by a sat. He called them “inscriptions.”

So he's made up a thing out of thin air to make funged non-fungible tokens.

Crypto just keeps getting dumber and dumber, and it will yet get dumber still.

There had previously been no way to tell one sat from another. To remedy the problem, Rodarmor coded...

It wasn't a problem, it was by design, and this is no solution.

By allowing sats to be sequenced and tracked...

It does not allow bitcoin sats to be tracked, because bitcoin doesn't transfer individual tokens but amounts in an account. This is a completely false statement. It's just as real as if I charged $50 for you to name a star in an Excel spreadsheet on my laptop.

He had created rarity out of thin air. “It’s an optional, sort of pretend lens through which to view bitcoin,” says Rodarmor. “It creates value out of nothing.”

"Oh my god, he admit it!"

This is a good article to keep in mind when people accuse me of being a downer on truly stupid, crass things that people spend money on. Let's be clear: this is a scam because people aren't buying "rare satoshis" for fun but with the expectation that they'll be able to sell it for equal or greater value. And the media going along with an obvious con is how we got Trump.
posted by AlSweigart at 6:41 AM on May 15 [31 favorites]

Yeah it’s just collecting. My brother is almost the same age as me. He was always involved in collecting stuff but never in a huge way or fanatic in his dedication. Baseball cards, shells, souvenirs from trips, CD box sets, etc. I was never into that stuff. These days he has about $1000 invested in bitcoin and some other currency. He manages it like a hobby. He knows not to invest everything he has in it but he sees it like a sport he can follow online. I was never into sports either and he always was.

Seems harmless as long as you don’t throw too much money into it.
posted by SoberHighland at 6:48 AM on May 15 [1 favorite]

I read up on the Ordinal Protocol that this guy released (again, in January of last year). The bitcoin protocol has no concept of individual, serial numbered satoshis moving around. A "satoshi" is just the tiniest amount of bitcoin that is allowed to be transferred according to the bitcoin protocol (one hundred millionth of one bitcoin).

The protocol is just a fantasy pretend assignment of numbers to them, based on their order (hence, ordinal) in the bitcoin blockchain of transfers. In this way, you can see the "movement" of "individual" satoshis.

But of course, serial numbers are boring (and I'm still unsure how you can reliably transfer them to another wallet, given how much uncertainty there is in who wins the mining reward and which transactions they attach to the blockchain) so of course they added "inscriptions" which allow you add some another data (like an ugly ape JPEG). So there are no bitcoin serial numbers and Ordinal Protocol is just another way of doing the same old NFT scam.
posted by AlSweigart at 6:58 AM on May 15 [3 favorites]

I paid $40 for a vintage tin because it is pretty and it has a sentimental connection to me. Still, that's a bit much for a tin, but I don't intend to sell it nor do I think I could sell it for more than what I paid for it.

The reason people fall for this scam (and it is a scam) is because they view it as an investment. People who "bought" the Brooklyn Bridge thought they'd be able to charge tolls on it. People thought if they bought the right beanie babies it could be their kids' college fund. This is an actively harmful practice that Wired Magazine should not be promoting.
posted by AlSweigart at 7:10 AM on May 15 [5 favorites]

There is a scene in Wilson and Shea’s Illuminatus! wherein one Clem Kotex has a late-night revelation about how “money” is really just a social contract and how value can be created out of thin air if enough people agree on it. Bitcoin has always made me think of that moment and this story really makes me think of that moment.

The value of a thing is whatever you can convince someone to give you for it.
posted by egypturnash at 7:11 AM on May 15 [1 favorite]

The value of a thing is whatever you can convince someone to give you for it.

The ideology of con artists and snake oil salesman, right here.

You (making assumptions here) can pay your US taxes with US dollars, and if you don't, you will be put in jail and/or have your stuff seized. That makes the value of US dollars quite, quite real. Bitcoin/NFTs/beanie babies have real value only insomuch as they can be traded for US dollars. (Bitcoin is a speculative gamble based on pyramid logic, not a currency.)

Let's not pretend they are the same.
posted by AlSweigart at 7:20 AM on May 15 [6 favorites]

I recently learned a really dumb fact about crypto mining. It turns out that if you're building out a lot of solar power generation in your state, but you don't have much in the way of storage (batteries, pumped hydro) or grid connections to other states, then at peak generation times (midday) you can end up having to turn off your solar plant in order not to overwhelm the electricity grid altogether. That's annoying and makes it harder for solar investors to predict whether their projects will be successful.

So there are people building massive crypto farms in Texas, and making hay out of the fact that these facilities can be used to balance the electricity grid, by ramping their power use up and down rapidly as electricity prices vary over the day. Because they can very easily turn that "spare" power into dollars.

Luckily lots of people are also building out battery storage in Texas so maybe this situation will return to sanity at some point soon and the "spare" electricity can be used to do something useful.
posted by quacks like a duck at 7:38 AM on May 15 [4 favorites] it is too early in the day to drink, it is too early in the day for this nonsense.
posted by praemunire at 7:41 AM on May 15 [3 favorites]

The "crypto promotes renewable energy" talking point is disinformation. Here's more info on Texas and crypto mining in particular:

Bitcoin mining operation Riot Blockchain earns more money in July by not mining, effectively mines without paying for power

Bitcoin Mining in Texas Expected to Consume more Power than entire state of New York (Bloomberg)

The "value" produced comes from tax cuts/incentives. And it's still all to support a pyramid scheme that enables the entire cryptolocker virus industry anyway. ERCOT and crypto are a chocolate/peanut butter combination of scam and corruption.
posted by AlSweigart at 7:48 AM on May 15 [7 favorites]

Human trafficking??? Did I miss that story?

In Feb 2022 the US GAO released a report discussing how bitcoin facilitates human trafficking.
posted by SaltySalticid at 7:56 AM on May 15 [4 favorites]

Isn't all collecting just a pump and dump scheme perpetuated by people who already have a hoard of the rare things that are supposedly desirable?

There is collecting and then there is Collleeecctttinnggg. I collect some things in a not terribly organised way. Pictures of places I've been; some interesting to me prices of wood; weird electrical kit usually from the old days; and if I'm being honest a good chunk of the tools I own are because I like seeing them on the shelf.

But I'm not into Collleeecctttinnggg where I expect to realize a capital gain on my collection or view it as a store of wealth.
posted by Mitheral at 9:43 AM on May 15 [1 favorite]

Isn't all collecting just a pump and dump scheme perpetuated by people who already have a hoard of the rare things that are supposedly desirable?

Of course not, especially when you add the "all". I'd even say no even if it was "most", because there's not usually any "pump" and the "dump" step is often the responsibility of surviving loved ones or executors. Fridge magnets from your travels? silver spoons? Precious Moments figurines? Matchbook covers? Seashells? Even most coin or stamp collectors are likely in it just for the fun. Sure you might sell something in your collection for some cash or to buy more, but not with any P&D intent.

OTOH there are things that "collecting" absolutely involves P&D for some maybe not insignificant participants. Fine art is the first to come to mind. Also celebrity-branded shoes, supercars, expensive watches.

At the risk of No True Scotsman I wouldn't call people buying shares in things like rare sats or shares of Truth Social and the like "collectors".
posted by achrise at 9:55 AM on May 15 [3 favorites]

Dang. It was even dumber than I thought. I didn't catch that it was a "put your name on a star/satochi" NFT boondoggle. I was only laughing at how just as the supposedly democratic bitcoin mining got taken over by rich people with enormous mining operations, big bitcoin producers were finding a way to suck up all the money being spent on "collectable" bitcoins.

But the fact that these serial numbers are just arbitrary and that I could release a completely different numbering system tomorrow which designates one of my bitcoins as #00001 and it's just a popularity contest which numbering system more people accept—making NFTs of individual bitcoins!—is three or more levels deeper into the fractal of stupidity.
posted by straight at 10:08 AM on May 15 [3 favorites]

I love the quotes from the guy who invented this numbering system:

It’s an optional, sort of pretend lens through which to view bitcoin

It creates value out of nothing.

I wish hardcore bitcoiners understood that people are going to do things with bitcoin that they think are stupid

It’s highly wacky
posted by subdee at 10:22 AM on May 15 [7 favorites]

I don't think the Wired article promotes collecting rare bitcoins, btw, if anything it says that the best time to get in on this highly wacky gambling hobby has already passed, that you currently need at least $100,000 in bitcoin to turn a profit, that you have to visit increasingly sketchy and dangerous sites to find any of the remaining sought-after numbers, and that soon big players will muscle out the remaining hobbyists. And that's not getting into how soon the seller's market will collapse as people move on from this (niche within niche) fad.

But what do I know about how the average bitcoin enjoyer will interpret this story.
posted by subdee at 10:27 AM on May 15 [2 favorites]

The cost of a thing is what you can convince others to pay for it. The value of a thing is how it sustains or improves your life.
posted by biogeo at 10:31 AM on May 15 [3 favorites]

Human trafficking??? Did I miss that story?

Tether is deeply implicated in Pig Butchering scams, which are operated by people trafficked in SE Asia. So theft facilitated by slaves, basically. Zelenskyy Faux’s Number Go Up is a pretty quick and readable examination of the damage wrought by crypto, mostly Teather.
posted by GenjiandProust at 11:20 AM on May 15 [3 favorites]

Let's be clear: this is a scam because people aren't buying "rare satoshis" for fun but with the expectation that they'll be able to sell it for equal or greater value.

Eeeeh, I dunno here. The guy interviewed seems to want to keep at least some of them because he likes them; that’s collecting rather than a scam. It doesn’t really matter if the thing collected is valuable in itself or a random byproduct of some human activity. I worked in rare books a bit, and the line between junk and treasure is extremely fine. As I said above, I am amused by palindrome numbers; when I find them in my favorites count I get a little thrill and take a screenshot. If I could find someone to buy my old screenshots, I guess I might sell them, but I’d still keep the best ones (for my personal value of “best.”) I’d think this was a dumb but pleasant passtime if it weren’t for all the evils associated with crypto.
posted by GenjiandProust at 11:43 AM on May 15 [2 favorites]

By the way, that’s Zeke Faux. Autocorrect is in an f-ing roll, apparently.
posted by GenjiandProust at 4:03 PM on May 15 [2 favorites]

Crypto just keeps getting dumber and dumber, and it will yet get dumber still.

So you're saying it does have a future?

/me rushes off to buy, buy, buy
guys guys guys metafilter just went long crypto get in fast hodl to the mooooooooon
posted by flabdablet at 7:41 PM on May 15 [1 favorite]

« Older A slice of life wrapped in an enigma with onions...   |   14 year old spends next two years fighting to save... Newer »

You are not currently logged in. Log in or create a new account to post comments.