Coinographic was founded in early 2014 in the UK by Mark Hamilton, with the goal to bring high quality physical Litecoins to the market. The coins produced were of a very high quality, with high quality custom wooden display boxes being a particularly stand-out offering. The company hosted several design competitions, with the winning designs being decided by voting and subsequently put into production. As a result of this community input, the coins developed can be seen as being accurate reflections of those interested in physical crypto-currency. One such competition to design a 2oz .999 gold 5 BTC coin (with the prize being the #001/100 funded coin worth several thousand dollars in ‘raw material’) became quite heated with accusations of rigged voting and plagiarism between the leading contestants. At over 240,000 USD for the raw gold and an additional ~200,000 USD for the BTC required to fund the coins, this was projected to be the most ambitious project in physical crypto-currency at the time. Though the production of the coin was announced to have begun in October 2014, it was never released (along with several other coins for which pre-orders existed) and the contest winner did not receive any prize. Coinographic did post a photo of a copper prototype created by the mint, which is pictured on the right.
In January 2015 after prolonged speculation, Mr. Hamilton announced “An unfortunate chain of events has led us to a situation where we can no longer operate as a business. Low volume sales, coupled with a large decline in the value of digital currency have left the business crippled”.1 This announcement was only the beginning of many issues, as it became apparent that the company was unable to honor over 40,000 USD in pre-orders or issue monetary refunds because the money was spent on molds, dies, prototypes, holograms, and boxes. Though Mark offered to use unsold inventory to provide a partial refund to pre-ordering customers, it was later revealed that the amount of inventory was very low and not nearly sufficient, inspiring further accusations of misrepresentation.
A further issue came to light when it was alleged that some ‘funded’ 25 LTC coins that were shipped months earlier were not actually funded (they were meant to receive funding once the customer received them) like they were supposed to. Noah Luis (creator of Lealana) publicly suggested that all Coinographic coins may be compromised and encouraged everyone to redeem their Coinographic coins. Noah was one of many prominent members of the collector community who were highly critical of the company’s operations and lack of ethics.
About three weeks after the initial announcement, Mark made a rather desperate statement in response to progressive calls for refunds. He said that “I personally have no money… I am struggling to put food on the table for my children. You can DOX me (my information freely available on the net), sue me or visit my house”.1
On March 24th 2015, somebody moved the LTC balance of a sealed 25 LTC coin into a crypto-currency exchange. The coin was owned by Litecointalk.org user ‘evilb’, who several weeks later posted a dated picture of the obviously un-tampered coin with visible first-bits to confirm that the private key had not been removed. The only way this could have been accomplished is if the individual who assembled or otherwise handled the private keys kept copies of them for themselves. This is the first time that a physical crypto-coin has been compromised in this way, and demonstrates the inherent issue with the physical crypto-currency model.
Though Coinographic was initially well received by collectors, it failed in extraordinary fashion. As of writing, over 40,000 USD combined is owed to customers, with civil legal actions pending against Mr. Hamilton, and some customers working to gather evidence for a criminal complaint.
While no proof exists, it is possible that the 2oz .999 Gold coins were minted, but not released from the mint likely due to lack of payment on part of Coinographic. If this is true, it means that one or more of the coins may surface one day. Even if they were produced, it is however likely that they would have all been melted down after a certain time-frame.