Liquid Alt: Gold, CA$H And Bitcoin

Almost everyone maintains some kind of liquidity, it is just natural to want to have enough money around to cover the necessary things in life: food, rent/mortgage, gasoline...  Most of people's liquidity is in banks, checking and savings accounts.  In this article, I argue that that may not be good enough, that everyone should try to own liquid assets outside of the financial system.

The USA and the world as a whole suffer numerous financial problems.  In recent years we read about people in Cyprus being "bailed-in", that is having some of their account money actually removed by their government, kind of a tax.  There are now numerous proposals being floated in the US and Europe to allow similar actions if the government so decides, "in extremis" of course...

Many of us have also read that the FDIC only has some 1% of its total possible liabilities should there be widespread bank failures.  Maybe the customers of the first few banks would get paid (ah, but only up to $250,000 -- in total, that figure is for the total of all of your banks accounts).

***

In the event of a "crunch" or other serious negative financial event, I believe that everyone (who can) should already own all three of these "Liquid Alternative Assets":

-- Gold (and/or other precious metals)
-- Cash, actual FIAT currency, perhaps four months worth
-- Bitcoin, diversification, mobility and a "Lotto Ticket"

NO ONE can predict the future!  We can make guesses and informed choices however.  Prudence would dictate owning at least something of the above in case of massive bank failure...

I offer the same suggestions to all readers outside of the USA as well!  Just tonight I read that the controversy in Germany about them NOT getting THEIR gold back from the Federal Reserve Bank of New York is making news again...

***

Most of you kind readers already know that I strongly believe that EVERYONE (with savings) should have some physical gold.  I suggest 5% - 20% of net wealth in gold.  Having 5% of your (net) wealth in gold puts you into "the 1%" (that is, 99% of people own NO gold, except for jewelry).

And I do not mean buying the GLD (the ETF for gold) or other "paper gold" (futures, etc.)!  Buy the gold, not the gold miners.  Buying gold miners is buy shares in companies.

Gold has been valued by humanity for at least 5000 years.  The ancient Lydians started "minting" gold coins about 550 BC.

Gold coins (especially, for Americans) the Gold Eagle or the Gold Buffalo) are probably the best way to get started.  Gold Eagles are available in sizes as small as 1/10th of an ounce (would cost about $160).

Silver is often called "the poor man's gold".  Silver is better than nothing, but if I had to pick ONE, I would pick gold.  There is no harm in buying some silver (or platinum) once you have a starter position in gold.

***

Since the banks are paying 0.1% (or less) of interest for your money in the bank, why not just take some OUT of the bank?  There is a real risk that banks may wind up losing some or all of it should bad things happen...

Since you receive essentially no interest on your money, there is essentially no "Opportunity Cost" (loss of possible income) in just holding some of your money in CA$H!  Just find a safe place for it...

How much cash?  The "survival" websites suggest around three - four months of family expenses.  Of course, in the event of big financial problems, "family expenses" might very well go down.  Again, hide it well, maybe even have TWO places, one easier to fool the burglar or other robber...

***

I also am feeling more and more confident that Bitcoin (BTC) is likely to be here to stay.  And that "almost everyone" with some extra "money", and the ability to get it, should own some BTC.

Before I get to my arguments as to why I recommend owning BTC I would like to show one apparent change in the fast-moving world of Bitcoin.  There are new entrants into the mining pools (blockchain.info/pools, image from about 5:15 PM US ET), *click* on the image for a better view:

People who closely watch the "mining pools" (groups who put hundreds or even thousands of special ASIC computers that work together to solve the "math problem" to mine BTC) will recognize the large blue slice GHash.IO, who has been grinding away in first place for as long as I have been looking at these charts (eight months or so).  GHash.IO typically takes some 30% - 49% (but they briefly did go over 50%) of the hashing power ("tera-hashes" in BTC mining jargon), which is closely correlated to BTC won by the miners.

But, there are new players!  Note KnCMiner (fourth place, 7%, "purple slice") and AntPool with some 3%.  Both of these miners are apparently owned by bitcoin mining equipment manufacturers!  In other words, KnC and Bitmain (the latter makes AntMiner rigs if I have this information right) are front-running their own customers!  The above chart illustrates what has long been rumored, that customers of these manufacturers are suffering long delays, because the manufacturers are using their own machines!

Bitcoin mining looks like it is no longer worth it to anyone but very highly capitalized groups who can also take advantage of things like having a data center, low electricity costs, and mining on a very large scale.

(The above also shows other new players, other mining pools that until recently have not been seen there: Polmine, "1AcAj9p" and "1BX5YoL".  Polmine is out of Poland, CloudHashing might be the guys in Iceland,  the other two mentioned here I know nothing about.)

***

As is the case with gold, don't "buy the miners", nor mining equipment, nor invest in "cloud-hashing"!  The rate of return in every case I have looked at is negative.  Buy the BTC!

Buying BTC is not for everyone.  There is a basic (it's hard though) set of knowledge that you must have to know how to buy and spend BTC.

But, you can use BTC in many places in the world now.  Argentina, for example, has severe financial problems (brought on by their government) and BTC has become rather popular there, going for a PREMIUM of some 30% - 50% over BTC prices here in the USA.  In other words, if you take enough BTC with you, you could make money (and pay for your trip) by selling BTC there in Argentina.

Bitcoin can be taken with you on your laptop, a flash drive, or even on a piece of paper ("paper wallet").  If you have a wallet at blockchain.info (there are others too offering wallets on the web), you do not need anything, just access to the Internet anywhere!  What this means is that you can move HUGE amounts of capital very easily (of course you need the capital to buy BTC), taking it out of the country if you need to in nearly complete secrecy if you do it right...

Review Of American Hard Assets -- June/July 2014 Edition

American Hard Assets ("AHA") is out with their June/July issue, they call this "The American Issue" in that they have several articles analyzing hard assets mostly pertaining to Americans.  Before I get to the magazine itself, I wanted to stroll around their website:

ahametals.com

as I have seen various Bitcoin ("BTC") articles linked by Justine Hermosa (a member of a Facebook Bitcoin Group).  Ms. Hermosa is closely following AHA's coverage of BTC and posting new articles from their website.  Why would AHA (purportedly following gold and hard assets...) be devoting part of their website (as well as two articles in this issue of their magazine)?  It looks like a combination of the below two concepts:

1)  AHA apparently feels that there is at least some merit in BTC

2)  AHA perhaps has gotten feedback from readers who want BTC articles...

At AHA's website, there are SIX current articles (3 days or less since published) on BTC.  I should ask them if they would take BTC for a subscription, smile,,,

Here is an interesting article that they post from the UK (in which they look at some fundamentals of 20  stockmarkets):

http://www.ahametals.com/20-top-contenders-world-cup-investing/

Nor has their website forgotten about gold:

http://www.ahametals.com/shanghai-start-international-gold-trading-4q/

There are six other gold-related articles linked at the above as well.

***

In AHA's "World News Updates" section, I noted an interesting table originally from Knight Frank Wealth Report (of London).  The below shows their view of the preferences of the very rich on cities where they will choose to live:

Rank	2013	2014	2024
1	London	London	New York
2	New York	New York	London
3	Singapore	Singapore	Hong Kong
4	Hong Kong	Hong Kong	Singapore
5	Geneva	Geneva	Shanghai
6	Shanghai	Shanghai	Beijing
7	Dubai	Miami	Dubai
8	Miami	Dubai	Miami
9	Paris	Beijing	Geneva
10	Beijing	Paris	Mumbai

Note Beijing (in red) moving up, despite pollution, and their prediction that Mumbai (India) will move into position 10.

***

Also in "World News Updates" is their short piece on BTC (as a bad investment this year, but recall that AHA's BTC info is always late), a nice article on the richest billionaire in each of some 49 countries (um, where are the Rothschilds?), as well as The New York Times own Paul Krugman calling Bitcoin "evil" (?, that's, "The Old Gray Lady" has jumped the shark...).  Granted, Krugman's article popped up just when BTC exchange Mt Gox crashed & burned...

***

Author Amber Ness is a regular there at AHA.  She pens a piece "Birth of the Modern Gold Bug" in which she looks at modern history of physical gold buyers, notably gold purchases picking up since The Great Recession.  Also interesting is her observation that gold owners are NOT just TEA Party members, that even more Democrats are buying gold...

She goes on to cover familiar (to us!) ground: why investors should consider having 5% - 20% of their wealth in gold.

***

Jason Walter Vaile writes a nice article outlining the history of the American Gold Eagle coin.  He starts with a quick overview of gold coins (Lydia was first, 550 BC), and then goes on to describe the design and production of the Gold Eagle.  The obverse ("heads") side is inspired by the design of Augustus Saint-Gaudens and the reverse side designed and sculpted by Miley-Tucker Frost.

Vaile has a handy chart (data from Zero Hedge!) showing sales of Gold Eagles since January 2009.

All gold in the Eagles is mined from the USA.

***

Richard Alexander Rogers writes "Good Delivery: Good for You".  "Good Delivery" bars are required for many LARGE buyers of gold bullion, in the USA Comex has their standards, outside of the USA the standard is LBMA standards for gold delivery.

LBMA (London Bullion Market Association) standards include gold bars of at least .995 fine, bar weight between 350 and 430 oz (troy) with fineness and refiner's stampings.  Both Comex and LBMA insist on a "Chain of Integrity" (gold stored at recognized warehouses), else, the bars have to be assayed...

***

Amber Ness writes "Closet Preppers: Quietly Arming for Doomsday"!  Apparently prepping is catching on all over the USA.

Her article is very good, quite comprehensive!  She covers most of the bases:

-- cash, both at a bank and/or at home (eight months worth)
-- gold & silver coins (including "junk silver" - pre-1965 US dimes & quarters)
-- a plan as to what family members are to do...
-- food (short-term and long), gardening
-- guns & ammo (yep, she says get them)
-- tools and similar supplies (a very long list)

But, she writes that doing SOME of the above is better than doing nothing!

***

Gabe Benson wonders in his article whether we can make money in Classic Cars (not just old ones).

Ah, not for me...

***

While we all read that manufacturing is nearly dead in the USA, Jason Walter Vaile advises in his article "American Artisans" that there are a wide variety of Americans producing high quality products (vodka, knives, guitars, woodworking, marbles and hats).

***

"222 Year History of the U.S. Mint" (by Douglas Kale) is a nicely done history of our Mint, from before we even HAD one (Alexander Hamilton proposed it in 1791, official coin production started in 1793).

***

AHA has recently featured pieces from authors from JustLuxe (justluxe.com, as website of luxury products and services for the wealthy, very weaalthy).  And this month, AHA features five articles from JustLuxe.

JustLuxe author Courtney Driver contributes a piece on polo, about an elitist sport as I can imagine.  She discusses the sport with Nic Roldan, an important American player.  Polo requires a variety of abilities, riding a horse in stressful conditions is but one...

JustLuxe author Noah Joseph writes a piece on the current fastest car, the Hennessey Venom GT (a highly modified Lotus Exige, this is now the world record-holder at 270 MPH...

Susan Kime (who has contributed to AHA before) writes a nice piece about World View Experiences, a company hoping to offer balloon & glider trips to take tourists to the edge of space (over 100,000 feet) by 2016...  At that height, you can experience the "Overview Effect" where you see the curvature of the Earth as well as the light coming up from the sun before sunrise there at the edge of space...  I hope they are able to make that happen!  Cost: $75,000 per trip.

Jared Paul Stern writes about a new lavish new "coffee table book" about American yacht maker Hinckley Yachts.  Billionaire David Rockefeller takes his Hinckley out for cruises from Southwest Harbor, Maine.  Martha Stewart owns one too!

Mila Pantovich (the fifth author featured in AHA's current issue) writes about costume design (movie costumes).  She focuses on costume designer Judianna Makovsky, who did much of the costume work for the new "Captain America" movie and has dome other work including for "The Hunger Games" and "Harry Potter".

***

Watch expert Ed Estlow follows up on his earlier article with more information on the re-emerging American watch makers.  "American -- No Really -- American Watches" looks at Shinola Watch Company ("Built in Detroit") and goes on to look at other American watches (none look inexpensive nor traditional) such as Devon, Keaton Myrick and RGM (Roland Murphy).

OK, I am happy to see more "American Artisans" making quality products that appear to succeed in this highly competitive world we share, but NONE of these are "vertically intergrated" yet, they import at least some important parts (from Switzerland and perhaps other places).

***

Michael Haynes (CEO of respected precious metals dealer APMEX) writes "American Eagle First Strike: Gold and Silver with Zing", about coins that are minted while the dies (that stamp the metal coin planchettes into their Eagle designs) are brand new, and (whose coins) are submitted by collectors and dealers to the grading companies PCGS or NGC.  These grading companies then "slab" the nicest pieces into the plastic, (hopefully) tamper-proof holders with a grade ("MS-70" is the highest possible grade: NO blemishes on the coin).

There DOES appear to be demand for these extremely high quality bullion pieces.  The MS-70 population of Eagles (silver and gold) commands prices well above "spot Eagle" prices (regular Gold Eagles typically already cost some 5% or more than spot price of gold).  In the case of the 2011 Gold Eagle, a "First Strike, MS-70" Eagle commanded a price of around $2400 (April, 2014) or around an $1100 / oz premium vs. gold spot price.

I did not know that these "numismatic quality" God and Silver Eagles went for so much more!

[Ed. Note: Beware of fakes!  China is making fake "slabbed" pieces...]

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John Maben writes "Top Ten Tips for Buying Precious Metals".

Many of you, dear readers, already KNOW how to buy silver and gold.  But, Maben's article is of value to any new people considering buying precious metals.

[Ed. Note: Maben is really writing: "Do your homework."]

***

AHA publishes several shorter pieces each issue on developments in the mining industry.  This issue's "Mining News" has an article on Transition Metals finding a likely good discovery of platinum at SUnday Lake (Ontario).

Another item in "Mining News" finds that Taseko Mining got rejected (second time) by the Canadian Minister of the Environment for a new gold-copper mine (Taseko will change their mining plan and try a third time).

"Streaming companies" are those who buy-in (one way or another) into receiving a percentage of a mine's or a refiner's output.  "Streaming Companies Break Records in 2013" explores three players in this space, the most well-known being Silver Wheaton (ticker: SLW -- whose stock has zoomed about 25% in the last month, see: http://stockcharts.com/h-sc/ui?s=slw).  But, many miners, including streaming miners, are losing money...

Other "Mining News items include pieces on Rio Tinto (ticker: RIO) cutting costs as well as Centerra Gold maintaining its Kumtor gold mine (the second highest -- altitude -- gold mine in the world, after Peru's Yanacocha) in risky Kyrgystan.

Finally the last mining item this issue is a very interesting report (a survey of 690 mining executives) from the Fraser Institute on friendly mining jurisdictions worldwide.  Sweden comes in at Number One!  That would not have been my guess.  Other highly rated (mining friendly) jurisdictions include Finland, Alberta (Canada) and Wyoming (in at Number Five worldwide), also considering mining friendly wre US states Nevada and Colorado.  LEAST friendly jurisdictions include Kyrgyzstan (um, Centerra?), Venezuela (duh), Argentina (no surprise either), Philippines, Zimbabwe, Ivory Coast Indonesia and Madagascar.

[Ed. Comment:  Buy the metals, not the miners, but that's just me...]

***

John W. Garibald writes the Editorial at the end of each AHA issue.  "The Impact of Geopolitical Events on Gold" is a fine piece explaining why sometimes not much seems to happen even when alarming news arrives (he looks at Russia and Ukraine here).

He asks why the prices of precious metals are not rising higher on what appear to me (and others) to be ever-more bad news in the world today.  Garibald writes this gem of a sentence which sums this conundrum up rather well:

"As with most things in the financial markets, the answer is multi-faceted and nuanced, but there are at least some primary contributors to study."

These contributors include size of the physical and "paper" PM markets, Federal Reserve QE policy, real interest rates and inflation in general (including in different places).  He suggests that you NOT play the headlines when buying (or selling PMs), but instead to average-in your costs through time and think long-term.

Bravo, Mr. Garibald!

Entertainment: Content and Consumption

I have two young (teenaged) nieces who are interested in producing animation.  This recently reminded me of a prediction I had read years ago (before the 2008 Financial Crisis of course): namely that a future concern of the entertainment industry as a whole would be a scarcity of CONTENT rather than a scarcity of CONSUMERS.   Indeed, I read (alas, I do not have the link) that cable companies were kind-of starved for content providers with all of the new cable (and satellite, etc.) capacity expected to come on-line in the coming years.

I also recently read that consuming entertainment is so much easier than producing it, that, well, that's why people go to the movies rather than everyone making movies.  Consuming entertainment (watching a game, listening to music, going to the movies, reading blogs, social media, other Internet, etc.) is what most people do after they work.  I am going to make an (educated?) guess that consuming entertainment is what MOST people do here on the Internet, they read mostly, respond some in the social media, and pretty much leave it at that.

I realized that I bit off more than I could chew, this topic is too large, and my sources not very good for some of the media I wanted to examine.  I will try to look at CNBC, American Hard Assets and perhaps World Cup stats and maybe whatever I can glean from movies or the Cartoon Channel, etc. for another article of this type in the near future.  So I limit may rough analyses to my own blog, to Zero Hedge (!) and our local town's newspaper.

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Blogs are real work!  Yet, I would guess that the amount of hours reading even my fringe blog outnumber my time to research and write it...  Regarding more specialized blogs, my thought is that even more total time is spent by the larger readership reading than the time spent by the creators creating content.  Here would be my best guess of my work on my blog content vs. approximate readers' time (these numbers of course are very approximate):

From 6 Jan 2014 until today I have had about 11,258 "hits", but some 15% or so of these would be my own: writing, editing, correcting and adding content.  So, 0.85 * 11,258 = approx. 9660 "real visits" from other people.  Some percentage of these real readers would be readers dropping by to see if anything new has been put up since their last visit.  But, most of you know that my quantity of readers depends much on my own publicity in announcing new pieces, so I am going to guess that perhaps two-thirds come by to read a new piece, rather than just seeing what they saw on their last visit.  9660 * .67 = approx. 6470 visits over that time frame.  Another guess (and each "guess" introduces greater error probability in these crude calculations) is that an average reader would spend 10 minutes per article: ((6470 visits * 10 minutes) / 6 [10 min periods per hour]) = approx. 1070 HOURS of people reading my blog.  1070 hours of consumption (I, of course, am hoping that my blog is more entertaining (while educational) than work).

OK, I have written 24 articles (not counting this one) so let me look at the CONTENT side now.  Clearly some articles take more research than others.  My recent gold-mining companies took time to prepare.  My gold analytical articles and articles that I had to research on my own took extra time.  Learning how to format graphs and photos.  But, a very rough guess would be some SIX hours of work per article, so 24 articles times six hours each would be approximately 144 hours of content production.

Continuing the quick arithmetic above would yield (1070 hours consumed / 144 hours of work producing content) works out to a fairly decent-looking (to me, a fringe-blogger) of about 7.4 hours of reader consumption for each hour of my work in putting up content.  That seems like a good number to me, dear readers, but what do I know, and of course, I am not paid for this (nor accept donations).  But see below...

***

I am curious as to the sorts of ratios of entertainment consumption vs. content production in other media.  My first quick & dirty look will be at Zero Hedge, (zerohedge.com) the famous financial website.  I was not able to get the Tylers to give me any information (they are very protective of their users and information, so I understand), so I have had to make very gross estimates which, when compounded with more gross estimates yields numbers that are very uncertain, perhaps not even close to being true...  But, I gave it my best shot, I wanted to estimate a similar ratio as above of reader hours consumption per (average) "Tyler" content production.  The higher the ratio (number) the better.  So who won?

-- approx. 7.4 hours of my reader consumption per hour of my production content

-- approx. 52 hours of typical ZH consumption per hour of a "Tyler's" work.

Zero Hedge get about SEVEN times the consumption per production of content than I do (Zero Hedge wins by a lot)!  But, since I have very little to work with (numbers) re Zero Hedge, I had to make many guesses, which could be very wrong...  My only other consolation is that they are professionals who know what they are doing, have better sources, perhaps different ones have different knowledge sets (probably) and so on.  I also presume, that as an Internet-only operation, that they have lower support staff needs than our local newspaper (see further below).

See my Zero Hedge arithmetic on this Google spreadsheet:

https://docs.google.com/spreadsheets/d/1g6zECTQMwQOGVqtFp4MMzsDVaTaYMe3beBDMkicuznM/edit

***

Our local newspaper (a suburb of a city, town population of about 9000) is a weekly.  I am going to have to wing this one too (in other words make "WAGs" -- wild @ss guesses!).  Our town is fairly quiet compared to most other towns/suburbs of major cities.  We have part-timers here ("snowbirds").  Some people get the paper free, some have to buy it.  Many people do not read it (we have a lot of Latin American origin residents, the paper is in English and more geared to English readers).

I get the paper for free, so I read it, perhaps a total of 30 minutes per issue.  But, not all that many people get it for free!  My WAG for total readers getting it free, one way or another (would include advertisers, etc. I presume): 500 people.  My WAG for newspaper buyers at the various stores and newspaper machines here in town: 1500.  They also offer subscriptions to people not living here (part time or maybe not at all).  My WAG as to their subscribers would be maybe 500 people too.

"Let's say" that the 500 of us who get it free spend some 20 minutes reading it (I read almost all of it, I suspect most read less than I do), that would be some 167 hours (500 readers * 0.33 of an hour) consumed by our "free recipients" group.

Let us go on to estimate the time that a buyer of a copy at a local store would read it: say 40 minutes (they BOUGHT it, they may "show their spouse" something of interest, pass it on, etc.), so: 1500 * 0.67 of an hour) would be some 1000 hours read by retail buyers.  Finally, let's assume that the subscribers read it about 40 minutes each as well (they BOUGHT it): 500 * 0.67 = 333 hours too.

Total hours (per week) spent consuming our town newspaper's content: approx. 1500 hours.

But, they have to produce their content each week as well!  The paper employs about 11 people.  FIVE of them "produce content" (two reporters, one editor, two graphics and lay-out people).  I count all five because I have the same (roughly speaking) duties.  The other six employees do accounting, sales, and other support.

Let's say that each of the five content producers works 40 hours / week (I do not know that, but that would be about right).  5 * 40 = 200 hours per week producing content.

OK, they have (very roughly) 1500 hours of readers consuming content to 200 hours of their people producing content: 1500 / 200 = 7.5 hours of consumption per hour of content production (per week).

Wow, that's pretty close to me, I'm almost there!  Of course my work here is based on many guesses that would change the numbers.

Also, our newspaper HAS to come out every week!  The Show Must Go On.  I have the luxury of writing when time, energy and the spirit permit.

***

This is an interesting subject that I am attacking from "Ground Zero", as I know ZERO about how the media works.  I am sure that this kind of analysis is done at a proper professional level for almost ANY media that has to generate revenue.

THIS article took me a LOT longer than six hours to write!  I am guessing approximately 12.

Again, I am trying to get an indicator of the DEMAND for entertainment content vs. the production of content.  Any of you dear readers who have contacts anywhere in the media or can otherwise send me some information, I would be much obliged!

304517: A BIG Bitcoin Block: $126,000,000!

Alert new Bitcoin observer "OROBTC" noted a large amount of money (gross flow, not net) pass by the blockchain recently:

 304517 -- A BIG Block!  (Read 1134 times)

Link here:

https://bitcointalk.org/index.php?topic=641879.0

***

Now when a guy like me sees such a huge number as $126 million + cross the wires, I take notice.  So I clickly quicked the link at blockchain.info (they scroll near-real-time transactions on the blockchain), I saw some nice information.  Remember, all information on the Blockchain is PUBLIC, although as I mentioned in my "Part Seven" article (a couple fo articles below), there are ways to cover your tracks reasonably well.

Just for perspective, here is a screen shot of blockchain.info's home page, showing latest Blocks, with gross amounts paid out (as always, *click* on any image for a better view, note that my anti-virus program took the opportunity to advertise itself (bottom right), LOL...):

The "Total Sent" column shows a bit over $30,000,000 (total) "sent" from the last six Blocks (math problems solved almost exclusively by the mining pools, note how BIG GHash.IO solved four of the last six).  Miners also make money from transactions (like when I bought my 0.25 oz Gold Eagle for BTC, I paid by Bitcoin, and it went via BTC Guild, another large mining pool, that transaction for some $365 cost me about $0.12 -- 12 cents!) as well as winning the 25 BTC.

Note the Block numbers ordered chronologically in the left column in the above image, the last Block awarded was number 304833.  Blocks are awarded about every 10 minutes on the average, so the above image is fairy typical.  Typically, if a long time goes by without a "win", the amount awarded is larger.  Note that 304832 was for a gross of over $10,000,000 (to mighty GHash.IO) because there was a relatively long 17 minute gap between "wins".  GHash.IO also processes a lot of transactions, so those 10-cent fees can add up,,, smile.

***

But, I wanted to explore the BIG Block: 304517!  Here is some information I was able to glean from blockchain.info itself as well as comments from "Bitcoin Insider" (, "B.I.", who, alas, informed me that these eye-popping amounts "sent" are not net amounts, more below.  Here is the info from Block 304517 (enter that into the Search feature at blochchain.info, definitely *click* the next two to see yummy details):

Hmm, another one of those reported form the Gulf of Guinea (0 degrees Lat., 0 degrees Long.).  There is a lot of interesting "inside baseball" information there, note the hash info at upper right, recall that miners have to "solve a math problem that shows they figured out the solution with an initial has of some 14 zeros..., that ought to give anyone an idea of why it is pools of thousands of ASIC computers that solve most of these).


Note, I scrolled down that page a bit for the below information too.  The first group is the dollar value of the 25 BTC "created" when the block was solved, this went to BTC Guild, if I understand correctly, it was only some $16,400 and change).  The other amounts below show transactions and fees.  Note that all of this is not very clear to an outsider (like me).

Below the 25 BTC award is the amount transferred that made the blow so big: almost $116,000,000!  You can see that a bit over $114,000,000 went to one wallet, and a bit over $1,000,000 to another.  Clicking on the "hash code" of this transaction yielded:

There are two interesting things to note (to a beginner!):

1) Only $1,304,000 was actually sent ("net") here

2) The transaction fees were ZERO!  Ask your bank if they will transfer THAT much for free!

Because so much of this is confusing for a beginner, I asked the help of B.I. for some explanation of what I was seeing.  Here is part of his response (in blue):

Robert,

Only about 2 1/2 Million dollars was actually transferred to other wallets. If you examine the transactions there appear to be consolidated wallets with extremely large balances sending small round number outputs to other wallets. This is just like what I discussed with you last week. My personal wallet was consolidated into a single address when I made a new wallet and transferred a variety of funds from years of activity. 

OK, what he is saying here is that wallet balances with large balances "seem" to send out large amounts (but the total net received by all the other wallets in this block was some two and a half million dollars), but many Bitcoin users often see these kinds of numbers at their own transactions (as have I: WHAT was going on with the amount of BTC I had that I did NOT send in a transaction?!?!).

OK, I sort of understand what he has been writing me, but one day I am going to have to ask him for a complete course in "Bitcoin Transaction Interpretation"...

Looking into lucky recipient 1Drt3c8pSdrkyjuBiwVcSSixZwQtMZ3Tew , we can note that 1Drt... was involved in a large number of transactions:, the below just shows the latest part of MANY others, it appears that this may be a part of a set of transactions between BTC Guild and an exchange (more in just a moment):

bitcointalk.org members "Phinnaeus Gage" and "bryant.coleman" have comments that lead one to suspect that perhaps that 1Drt... wallet may belong to one or other of the exchanges (bitstamp maybe?), but I was unable to understand their comments, I am not "there" yet... (see the comments No. 31 and 32 from them at the bitcointalk.org link near the top of my article, these two people are senior members of the forum and appear to know a lot, why it would not surprise me to see "OROBTC" thank them very soon with a link to here...!