He Bought Bitcoin at Three Cents and Would Not Pay More Than 99 Cents
He and his partners thought $100,000 was possible, but gave it less than a 1% chance.
Joys of Compounding · Chad Cascarilla - Blockchain’s Carpenter - [Joys of Compounding, EP.26]Chad Cascarilla, the co-founder of the blockchain company Paxos and a former hedge fund manager, started buying and mining Bitcoin when it cost about three cents in April 2010.
By the time the price reached 99 cents, he told his partner Emil that they could not buy any more. As Cascarilla recalled, "Risk-award is $10 and zero. So 99 cents, that's the last price we're going to buy this at."
He and his partners believed it could reach $100,000. He just put the chance at less than 1%. As Cascarilla put it, "a really big number times even a small probability can still be a big number," and that was enough reason to keep holding what he had.
Questions people ask
What does it mean to mine Bitcoin?
When Cascarilla mined Bitcoin in 2010, mining meant using computers to confirm Bitcoin transactions and earn new Bitcoin as a reward. Then it could be done on an ordinary home computer, while today it requires large warehouses full of specialized machines and cheap electricity.
How much would Bitcoin bought at three cents be worth if it reached $100,000?
A single three-cent Bitcoin would be worth about $100,000. A $100 purchase at three cents would have bought about 3,333 Bitcoin, worth about $333 million at $100,000 each.