With Bitcoin gaining popularity and then some semblance of stability in its real-world value, will the cryptocurrency remain in the lead amongst other digital tender?

Virtual currencies are not exactly new. While purely digital currencies like Bitcoin are often the subject of news today, technology startups have explored virtual currencies as early as the 1990s. Take for example Beenz.com, which launched a currency called “Beenz” meant for earning loyalty points and paying online. After raising $100 million in VC funding, the startup failed to gain traction and eventually folded in 2001. Even virtual currencies used in multi-player online games do hold real-world value in terms of their purchasing power for both virtual and even physical goods.

For the longest time, however, digital payment services that rely on real-world or fiat currencies have dominated. PayPal was already on the rise in 2001 when eBay acquired the payment service and integrated it as the payment method for auctions. PayPal now processes at least US$ 55.05 billion in transactions per quarter, mostly involving credit card transactions and money drawn from bank accounts.

There is another trend on the rise, which involves cryptocurrencies. Currencies like Bitcoin and Litecoin differ from more traditional payment services in the method of recording and validating transactions. Unlike payment gateways that process transactions through a central exchange, cryptocurrencies rely on a distributed blockchain where everyone can essentially track transactions, but with parties having a certain level of anonymity. The peer-to-peer nature reduces the cost of transactions, which are supposedly faster. This also ensures verifiability of the transaction, although not necessarily traceable to the identity of the parties involved.

Currency vs. commodity

One big question today is whether cryptocurrencies are to be considered as currencies or whether it is more proper to value these as tradeable assets or commodities. Bitcoin, for example, may be considered good as cash because of its anonymity and the direct peer-to-peer nature of transactions. This makes it akin to paying with money, but without the involvement of central banks. However, some would argue that cryptocurrencies are more of commodity rather than money, in that it can be traded for its value, but not as cash equivalents. This has been a contention among regulators, tax authorities, entrepreneurs and users. Such arguments will shape the sentiment on currencies like Bitcoin and Litecoin in the foreseeable future.

In fact, value — or speculation thereof — has been one big factor that as led to increased cryptocurrency use. Since its launch in 2009, the value of Bitcoin has risen from a low of almost nil to a high of US$1,135:BTC, although the value has seen several crashes, which would usually correspond to major events such as the seizure of deep web service Silk Road’s assets and bitcoins, as well as China’s ban on exchanging bitcoins for fiat money.

Will Bitcoin remain in the lead?

To date, Bitcoin is the most popular cryptocurrency, and it has spawned a big industry around it, both among hardware companies and software-based startups. Because bitcoins can essentially be created through algorithm, chipmakers like Nvidia, Intel and AMD have launched product lines specifically meant for mining coins, which will usually involve high-powered calculations that rely on both CPU and GPU power. And given the need to facilitate transactions and exchange of funds, digital wallet startups have opened shop to keep users’ coins safe through online and mobile-based wallets. We now also see the trend among brick-and-mortar stores accepting bitcoins. Some startups have partnered with banks to launch Bitcoin ATMs.

The real test in determining whether cryptocurrencies will remain relevant is, of course time. Analysts have actually plotted the value of several popular cryptocurrencies against each other and against a fiat currency standard (the US dollar) using regression analysis to determine whether Bitcoin, as the leader in the field, will remain to be the dominant digital currency, with respect to value against the US dollar and value against other similar digital currencies.

The result is quite interesting in that being a first mover, Bitcoin is seen as enjoying a winner-take-all effect early in the market. However, as the market for cryptocurrencies matures, other currencies — called “altcoins” — gain an advantage in value over Bitcoin. The dynamics that play a big part here involve a so-called substitution effect, in which the introduction of alternative cryptocurrencies is made mainly as a balancing force to counter the rise of the first-mover, the value of which is seen as quite volatile. In short, the market deems Bitcoin not necessarily as a cash equivalent, but rather a financial instrument whose value is tied deeply with supply and demand, or the perception thereof.

Given this fundamental concern over Bitcoin’s long-term value, does it mean that it is not a good investment, per se? Perhaps for early adopters, the gamble may have paid off. Seeing the value of one Bitcoin rise up from a dollar to $476 in five years (even breaching $1,000 in mid 2013) is not bad at all. While the value has plateaued and somewhat stabilized in the $400-$500 range for a considerable time now, it may not make for sound long-term investment. Even Citibank says that the high volume of transactions and increasing merchant support is pushing the value of Bitcoin down. Perhaps the longer-term effect is that Bitcoin will turn out to become closer to a fiat currency rather than commodity, after all.

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Not too long ago I received a message from a friend, linking to a mining rig/case on FrozenCPU. I took a quick look at it and thought that it was just what I had been waiting for. Over the last year I have gotten into alternative currency mining. During that time I have assembled a few rigs. For housing the multiple gpu rigs I had jerry-rigged them on wire shelving. The kind of wire shelving that you can find at Target or Wal-Mart for less than $50. This has been working out nicely for me up to now. I am trying to redo my office and keep it nice and tidy, so the racks have to go. They sure take up a lot of room, not to mention being an eye sore in my office. I decided that the Hasher could be just the ticket, as it looked to be an organized and stackable unit. So I placed my pre-order for two PrimoChill Hasher units.

I will taking a closer look at the Hasher, PrimoChill’s new mining rack offering. I am evaluating the Hasher based on the reasons you would upgrade to one: ease of use, looks, assembly, and quality.

Hasher’s features as stated by PrimoChill:
• Foam cushions for the GPUs – No contact with metal
• Sliding top GPU holder
• Extremely rugged to protect your investment
• Easy and fun to assemble
• Unlimited upgrade paths
• A movable 3 piece motherboard tray for perfect positioning
• Rubber case feet to help with vibration
• Adjustable video card height – Several placement options
• Made in the USA

The Hasher is currently priced at $129.99 and is available from FrozenCPU.com. The unit was delivered in a plain brown box with the small parts in baggies, and the larger parts plastic wrapped together. There was very noticeable odor coming from the parts which was likely caused from the laser
cutting of the plastic pieces. I have had surgery on my sinuses and it bothered them greatly, but others I have talked to were not too affected by the smell.

The assembly is fairly easy but does take a bit of time to complete. One of the first things I noticed was there were no paper instructions for the unit. Surprisingly there was only a small piece of paper with the PrimoChill product page for the Hasher. There they have a YouTube video with instructions to build it, which was a nice idea but flawed. Seeing as I was building the unit in my living room I only had my phone on me, I relied on that to watch the video. This wouldn’t be so bad if the screws that they provide to build the Hasher were not covered in oil. As I was pausing and rewinding the video to watch the next steps I was getting more and more oil on my phone. This was a real frustration as even when I toweled the screws down they were still quite oily. That was the only major flaw I found in the assembly of the item. I was informed that PrimoChill now has a PDF file for building reference PrimoChill provided a nice Allen wrench that you can assemble the whole thing with. You will only need a small flat head screwdriver to attach wires to the power and reset buttons. Everything just slides into place nicely andit comes out looking very sharp.

The Hasher allows for dual PSUs and comes with a harness to hook them up. It makes it so much easier by not having to jump one with a bit of wire.

The buttons are good quality and really make the Hasher look nice and clean.

The motherboard “tray” is just a few strips of plastic with standoffs that float in the channel of the frame.

There are spacing options for five or six cards, and there seems to be a few different ways that you can choose to secure them in front. I went with the front two supports locking them in and the rear strip holding the ends up. I recommend using a ruler to set the height of the bars on each side so you keep it even.

PrimoChill offers cooling upgrade options. There are fan brackets and a ducted exhaust box that mount to the Hasher. These add-ons keep the same pleasing aesthetics as the Hasher. These will definitely be of use to provide a constant supply of fresh air when running multiple graphics cards.

The Hasher is built with quality parts and looks great which is nice since I will be keeping this in my office. The fact that I can stack two or more on top of each other is another big bonus to save as much space in my office as I can. I think that with this item the biggest drawback is its price which at $129.99 is a lot more than $30-$50 wire shelving that many miners use to store multiple rigs on. If you are looking to have the highest return on your investment on the hardware this is not for you. This is a great option for being able to have a mining rig that is well organized, stackable, and something that looks great.. After I moved from a wire rack to the Hasher I am quite happy with it. So at the end of the day this does exactly what it promised, with minor inconveniences in the assembly (and for me smell). I won’t hesitate to recommend this product to someone who wants a cleaner setup over the wire rack.

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