March 2, 2021

Cryptheory

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Not Bitcoin Like Bitcoin – Freshly mineded virgin coins cost 20% more

2 min read
Not Bitcoin Like Bitcoin - Freshly mineded virgin coins cost 20% more

Most of you don’t care what the history of your Bitcoin coins is, where they came from and when they were mined, but there are some people who care. They are people who are interested in the so-called virgin coins. Often these traders don’t mind paying 10-20% more for them.

 

What are virgin coins?

 

Bitcoin coins can be found in the online database when needed, so you can trace to whom they belonged before. Investors want to have “clean” coins that have no past in the past. They could get stolen coins, which could then damage the company’s reputation. Virgin Coins come directly from the miners and have never been listed in the online database. These brand new coins therefore have no record of their movements and are their first owner.

 

These coins are mainly sought by institutional investors, who even pay more for them than is value on cryptocurrency exchanges. Usually this is a 10-20% increase over the market price. This is mainly because it is harder to find a miner to sell them in this way. These Bitcoin buyers come from the US and other stricter regions.

 

Bitcoins can be divided into several categories

 

2% of Bitcoins labeled “Black” – located at a known address related to illegal activities. These coins could only be spend on black markets. Cryptoexchanges and banks would immediately freeze these coins and open an investigation with the authorities.

 

40% of Bitcoins marked “Grey” – coins of untraceable origin. Legally operating merchants in some countries need to identify the owner of these coins before they can receive a payment.

 

55% of Bitcoins labeled “White” – coins of fully traceable origin, from the moment they were mined or first sold. In the future, ownership of white coins would allow national states to enforce legal property laws by forcing miners to only accept transactions signed by a trusted bank.

 

3% of Bitcoins marked “Virgin” – the original idea was to use them as currency reserves in case Bitcoin replaced physical gold.

 

Summary

 

3% virgin coins are quite enough. Unfortunately, besides the original use, it is also use by institutional investors. I do not blame their decision, but there are not enough coins left for currency reserves. Mainly after the halving expected this year, virgin coin production will be halved.

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