Fidelity Is Mining Bitcoin, CEO Abigail Johnson Admits

Tyler Durden's picture

In what bitcoin geeks undoubtedly interpreted as a sign of bitcoin’s renewed relevance now that its price is at all-time highs, Fidelity CEO Abigail Johnson told CoinDesk’s Consensus conference that her company is now in the business of mining bitcoin.

Per the FT:

“Ms Johnson noted that Fidelity has also set up a bank of computers built by 21 Inc that can crunch complex algorithms to be rewarded with bitcoin.

 

My…computer has mined over 200,000 satoshis,” she said, using the name for the smallest unit of bitcoin.

Her remarks coincide with an astounding rally in virtual currencies like bitcoin. As DoubleLine’s Jeffrey Gundlach noted on Tuesday, bitcoin is up 100% in under two months, implying that the turmoil in Chinese markets was driving more locals into bitcoin.

One coin was trading at $2,275 Tuesday according to Coinbase, the latest in a series of all-time highs as global uncertainty rises...

Johnson also added that Fidelity now allows employee to pay for lunch with bitcoin at the cafeteria in its Boston headquarters. She noted that fewer than 100 employees have paid with bitcoin, demonstrating an unnatural-sounding mastery of industry slang.

“I guess we have a lot of hodlers,” she said, using the slang for bitcoin users who avoid selling the currency when it jumps in value.

And Fidelity's CEO also revealed information about her company's partners on its journey, naming blockchain startup Axoni, investment firm Boost VC and university initiatives based out of MIT, University College London and Cornell. To date, Johnson explained that Fidelity Labs, its internal R&D division has also set up experiments for bitcoin micropayments and even run bitcoin and ethereum mining operations in the spirit of learning more about the technology. Further, she revealed that Fidelity will be taking some conservative steps to expose Fidelity's customers more to the industry, announcing that customers will soon be able to see Coinbase holdings on Fidelity.com. Already, she said, this feature is available to employees who own digital currencies available through the startup's services.

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freedogger's picture

Whatever toots, yer late to the game. I was heating my house with my mining operation way back in 13.

Counter-party's picture

So, approximately $4.00 worth of bitcoin? How nice for her.

fx's picture

Those lunches paid for with BTC may turn out to be very costly ones, in retrospect. The guy who paid $20 in bitcoins for two pizzas a couple years ago actually better had paid in cash. Those Bitcoins could now be exchanged for 10 grand $ if not more. So anyone actually paying for stuff with those goes actually short BTC. Doesn't sound that wise in the midst of a mania.

hmmmstrange's picture

More like 23 million USD

any_mouse's picture

Is Bitcoin a secure, encrypted transaction currency or a store of value?

Can it really be both things?

What happens when all 21,000,000 coins are mined? Those last coins will be expensive to mine. Many miners get out and get into mining something else. What effect would that have?

Too many "hodlers" (are they all dyslexic?) and the exchanges will not make a profit on transactions. Exchanges merge or collapse. Less competition, higher fees.

More choices for crypto currencies arise. Who sets the exchange rates between the various crypto coins? A London type Fixing?

Bitcoin changes the currency, but does not change market forces or human nature.

syzygysus's picture

I believe fully in blockchain currencies.  Highly secure, no third party needed, some level of confidence and anonymity.

 

But 21mm BTC...think about this, supposedly this is the upper limit.  But now with hundreds of competing crypto currencies, many of which may be superior, and the ability for people to create as many blockchain based currencies as they want...

There really is no limit to 'bitcoin' (all crypto currencies).

 

Once this is realized by more people, the value goes closer to zero.

fx's picture

At some point, yes. BUt until then, BTC will act as anchor to the rest. I.E. the value of all other cryptocurrencies will somewhat be derived from the market price of BTC.
I don't think that more than a handful of these currencies will really play a role 3-4 years from now. The rest will die, more or less noticed only by the insiders.

cayman's picture

Zackly.  I want gold smart contracts that can trade like BTC but are redeemable for gold vaulted in Singapore and can be divided and aggregated without limit.

ejmoosa's picture

That's the ironic consequences of an unstable "currency".  Greed will reduce the liquidity as everyone holds onto it for fear of losing out on gains.

Every time you turn around, gold and silver seem a better and better choice.

BTFDemocracy's picture

It was 10,000 Bitcoins for 2 pizzas. Now approx $23 million dollars.

dark fiber's picture

The bubble is getting super critical.  Unfortunately it is too small to be worth watching.

Aussiekiwi's picture

Why do I think the power bill might exceed $4.64?

echoes's picture

10K by 2020. You heard it here.

CJgipper's picture

2020?

 

I'm not a to infinity and beyond bitcoin retard, but with these levels of money printing in all the major currencies and sticks maxed out in valuations, and people wanting to exit fiat yet stay semi liquid, I think bitcoin 10k is more likely this year than 3 years out.

Jambo Mambo Bill's picture

Here is my take on Bitcoin...

If you didn't get into BTC when it was below $500 then IMO the risks are way higher than the benefits .. there are penny cryptos like Ripple that can offer multiple returns with less risks, as opposed to hold Bitcoin that had a  30000%+ run for the last 5 years... what is easier by year end, Ripple be more than $2 dollars from today's miserable  $0.35 cents or Bitcoin be $8000 thousand?

Bitcoin is losing market cap dominance by hour, is decelerating rapidly despite the good news, I would cash most profits now and shift to lower risk cheaper cryptos.... In fact, most big investors that started back when it was $200 are 85% out of it now... who will be the greater fool?

Bitcoin administrators are so full of money and fame, that they forgot about developing bitcoin... many altcoins are faster and smarter today... also who wants to own 0.0000362BTC when they can own 2000 Ripples for example... The average discretionary income and savings in the West is less than $500.... who can afford further pumps into Bitcoin besides short trade speculators?

Bitcoin is fantastic! The best performing asset of all times... however math has showed that Bitcoin 10k is impossible for several reasons, today transactions are already taken hours sometimes...

So how far can Bitcoin go?... who knows... but good luck trying to sell it in a rush or waterfall sell out  event, impossible as everything gets jammed and usually gets delayed even up to 2 days... truth is, exchanges today are so overwhelmed that they auto reply emais apologizing for not having time to answer the emais to begin with...

rejndjer's picture

only thing u forgot to mention is that there are like 38 billion xrp, as opposed to maximum of 21 mil. bitcoins. but i agree with u, u can still buy both, it's the money of the future.

Jambo Mambo Bill's picture

Ripple is in the process of locking most of excess XRPs.

Now, when more banks start using the Ripple network, they will need millions of XRPs to do their transaction, these days any shit coin is $2-$5 dollars... XRP is really undervalued IMO, in a mini bull run last week it went almost half of BTC market cap, so it's not unreal to think that XRP could pass BTC at some stage, as it is slowing down, in the other hand Ripple is in its infancy. For banks, make more sense to utilize an already made netowrk of a reliable, strong and lighting fast block chain designed for their transactions than spend billions into developing something new, so expect many more adoptions into the Ripple network, and the XRP will reflect that.

Talking about numbers, Bitcoin had a fork that looks like people already forgot, there is 2 or 3 other zombie bitcoins out there, with huge valuations, including the Bitcoin Unlimited which is going for like $145 dollar now if I am right, so... unlimited coinage...tell me if that isn't a monster bubble... at least XRP has limited amount of coins, which will be managed to the benefit of the network and the stability of the xrp.

CJgipper's picture

I got in last month and have doubled my money.  I'll leave you to the math, but I think I can survive even a 50-60% correction.

 

Today, Ask someone on the street or in your office what bitcoin is.  There's a whole bunch of track in front of this train.

Jambo Mambo Bill's picture

I never said, Bitcoin isn't good... I love it! What I am saying is that as an investor point of view, bitcoin is way overvaluated, chasing exponential profits usually doesn't end well! what if there is a massive bad news on the Bitcoin core or from the Fed against it for example... what would be your exit strategy if you are holding 100k in BTC for example, when the whole crypto planet start selling and shorting it?... If you didn't try selling BTC in a flash crash, try it next time... you probably will be stuck for hours and your valuation will be way below you were trying to dump it I am sure, perhaps 50-70% below.

I was also fortunate to make many times over my investment baby cryptos like Ripple from a month ago, without the stress of a super valuated asset.

But hey, keep buying bitcoin... who will benefit from a crypto that is so out of reach from most people? The ones that are buying now or the few multi-millionaires that purchased BTC when it was 10 times cheaper?... 

Good luck with that...

affirmed_78's picture

It's divisible to 8 decimals, and could be extended.  It's never going to be out of reach.

 

Looking at price per coin is meaningless.  Ripple has an unfathomable supply, hence each coin ain't worth much.  

nmewn's picture

Get your Bitcoin heeeyah! Get your freshly mined red hot Bitcoin heeeyah! Only $2,275! 

nn0933455's picture

our best friend's mother-in-law gets 72 each hour on the laptop... she has been laid off for twelve months but the previous month her pay was 13019 only working on the internet for 2 hours per day..

 

 

go here to this link>>>>>>www.jobocean3.com


northern vigor's picture

"...Oy...I'm cutting me own throat sellin' them at this price"

                      ............................................................C.M.O.T. Diddler

dark pools of soros's picture

"Not one gold coin... make that TWO gold coins for your bitcoin!"

- "What's a gold coin?"

Right now not a lot of things to majorly cash out of bitcoin for that won't put a big target on you for the taxman or other fed snoops. So the price flys high while the whales window shop. Perhaps next big art auction takes bitcoin which could put downward pressure as that would need to be converted.... Vancouver real estate redux??

CJgipper's picture

Randomize the bitcoin, and it'll take the IRS decades to prove you even own it.

East Indian's picture

The bird has flown the coop. Bitcoin is already out of control. It has spread so far and wide, it will be impossible to control it. It will be a very good alternative to the paper-masquerading-as-gold investments.

Next, the fiat governments will "swing into action". There will be "official" cryptocurrencies, or coopting the existing altcoins - Ethereum has been swallowed by Microsoft; banksters have swallowed Ripple, that would have set the whole Forex futures on fire.

But such tricks will not last long. The monopoly on money creation has been pried away from the cold fingers of the unmentionable central bankster mafia. MONEY IS WHAT PEOPLE SAY IT IS. Not what Govt says it is. If the govt insists on collecting its dues in fiat, and paying its employees in fiat, let it do so. But sooner, than later, people will use a competent and widely accepted money for their transactions, and will buy fiat only to pay the govt taxes! And the govt employees will change their fiats immediately to open market money! Since the demand for fiat will be limited to the tax demands, eployees will find that they have to take a heavy hit if the govt overprints its fiat! Hence, the govt cannot thrust more fiat on the society than its tax demands! Voila! Ultimately the governments world over may have to eat crow and accepr privately mined cryptocurrencies!

 

Some stray thoughts on bitcoins:

Bitcoin is essentially a software generated token. It is absolutely useless for any other purpose. It is the ultimate token money. It only proves that the owner has spent a certain amount of energy to obtain it. It is like a boarding pass for a completed journey. Apart from proving that a passenger has spent some money and travelled from A to B it does not serve any other purpose to anyone else. Therefore similar tokens of usage of a computer can be issued by generalized software, and used as money. What I mean is, right now, the software for generating bitcoins - the blockchain, counts only the calculations made in the blockchain, and issues a bitcoin after a certain amount of work is done. It ignores other works the same processor is doing. (I understand ASIC miners, but lets confine to CPU mining). Suppose there is a software that counts all the work a processor does over the day, and issues a token after a certain quantity of work; that can be a more popular altcoin.

 

PoS has effectively undermined the traditional banking; now you dont have to lend your money to a bankster to get an interest! PoS can effectively prevent fractional banking!

Among the tricks the banksters will use against the altcoins will be the altcoin based ETFs! They will certainly try to do to Bitcoin what they have successfully done to gold - ruining its price discovery!

A revolution has set in; only a brutal and open suppression can control it. We may be watching the collapse of the fiat system before our eyes! Think of that!

r3phl0x's picture

I agree with much of what you said, however, Bitcoin is basically the government's bitch if/when the govt wants it to be. It can be fairly easily monitored, taxed, "discouraged" or even outright banned at many levels - e.g. getting full records from the exchanges & then having the IRS initiate full-anal-probe audits on everyone there. They can request records from your ISP to see if you've ever visited overseas, unregulated exchanges and, hell, the US could probably get full records or a full shutdown of most overseas exchanges if they really want that - just like how they've gotten torrent sites shut down (and their owners prosecuted) in pretty much every other first-world country.

bshirley1968's picture

Let's analyze some of your statements, shall we? 

"........it will be impossible to control it."

Really?  Anything bases in 1's and 0's is VERY easily controlled.

"The monopoly on money creation has been pried away from the cold fingers of the unmentionable central bankster mafia."

Not without somebody dying.......dumbass.  You are talking the whole bag of marbles, and they ain't going to just roll over and give that up.  I refer you to my response to your first stupid statement. 

"But sooner, than later, people will use a competent and widely accepted money for their transactions, and will buy fiat only to pay the govt taxes!"

People will use......whatever is most convenient..........and legal.  Whatever the government allows and corporations accept is what people will use.  It will be that easy to control whatever people use based on these two things.  If Amazon never takes bitcoin, the bitcoin is a dead currency walking.

I am going to stop there and finish by saying, the dollar is already a crypto-currency,  dumbass.   Less than 2% of dollars in existence is in paper and coin.  Bitcoin will be fringe shit just like PM's until the government approves it, thereby taking it over.

You have never learned the law of money changers.  They have the power to determine the VALUE of your money....no matter what that money is.  Use to, you accepted paper based on how much gold or silver you could go get with it, now we are only interested in how much paper our gold and silver is worth.  Paper=dollars. 

In what is your "crypto-currency" valued?  That's right, bitch,  dollars.   Call me when bitcoin is no longer listed/valued in dollars.  You might have something then.

DeaconPews's picture

Isn't Abigail Johnson a pornstar? 

seabass974's picture

"My…computer has mined over 200,000 satoshis"  

lol peak dumb!

SHORT EVERYTHING THIS WOMAN HAS TOUCHED!

any_mouse's picture

OMG!!! 0.2 BTC!!!

Not even a sawbuck in USD.

How much electricity did that take?

tmosley's picture

.002 BTC, actually. 100,000,000 satoshis in one bitcoin.

truthordare's picture

She has mined $5 and is broadcasting it to anyone who will listen.  :)

Blano's picture

That was my first thought...if they're admitting to wasting money on this stuff, time to bail or go short.

I'm an old fart, so to me anybody who thinks this BTC stuff can't be manipulated or stolen, you're nuts. Somebody will figure it out.

Indiana1's picture

Bitcoin is a good idea but not as an asset investment.  It's best use is short-term holding for exchange, just as paper money SHOULD be.  If it continues to climb in value, it will simply be replaced with a different cryptocurrency.

AE911Truth's picture

 

Fidelity, good decision mining bitcoin. Note that mining profits increase as the cost of electricity (to power the equipment) decreases. With a BrilliantLight Power SunCell the cost of electricity is ten times cheaper than conventional sources. Use of this will increase mining profits considerably. You should also note that 200 grams of silver in a SunCell can provide more than 200 kilowatt-hours per hour, 24 hours per day, every day for 20 years, after which the silver can be recycled, indefinitely. The value of silver in this use case is $27,000.00 per Troy ounce. So, you might want to pick up some shiney. Also, while you are rebalancing your portfolio, dump the oil.

 

bombdog's picture

Wow with all that cheap electricity why not sell electricty instead? Would be much more profitable than mining bitcoin. Is it because the device doesn't actually exist?

AE911Truth's picture

Yes, I agree you are correct. You should delay taking action until after the market has priced in any change from which you intend to profit.

 

turkey george palmer's picture

In 20 yrs an Amish farmer will have used you for fertilizer to grow taters to feed his hogs

AE911Truth's picture

Lot of flack. Must be directly over the target.

juicy_bananas's picture

When your Uber driver starts giving you bitcoin advice,  it's time to get out.

Wrenching Away's picture

Your downvotes are from the resident Uber drivers.

Yen Cross's picture

 Fidelity is a shithole.

 I've read conflicting research, but after the fact, China, South Korea. Japan makes up for 94% of BTC purchases. The majority from China

  Useless eaters make useless decisions.

 Fidelity is where Old People go to spend their Calpers.

 Fidelity sucks Donkey Diks!

mtl4's picture

Makes sense, that's where the capital controls are the strongest and Bitcoin helps get around those for now.