Monday, August 11, 2014

How Bitcoin Got Me A "Free" Smartphone

I first heard about Bitcoin on the "Security Now!" podcast episode 287 in February 2011, and then in January 2013 episode 388 mentioned Litecoin. I installed the basic Litecoin QT software on my FRAGG computer and asked it to try "mining" Litecoins. I struck it lucky a few months later and earned LTC50, which is worth around R3600 in today's currency. In those days there wasn't much I could do with it, other than use the exchange to buy Bitcoins. LTC10 buys around BTC0.11, so it isn't exactly a fortune. Litecoin is to Bitcoin what Silver is to Gold.
Later, when I bought my new SQL Server I was able to use the minerd program to do "mining" with a "mining pool", and thereby earn further LTC.
With 8 cores, the Intel Xeon processor was sitting around doing nothing much of the time, so now at least the server could do something useful when it wasn't being a server. I joined the CoinHuntr mining pool, and have been earning a small trickle of currency since April 2013. Unlike Bitcoin, where you need custom hardware to do "mining", Litecoin uses a "memory hard" algorithm that allows ordinary hardware to stand a chance of successfully mining coins.
More recently I heard that PayFast, the payment gateway for (and thousands of other online stores), was able to accept payment in Bitcoin. While investigating this for Bookdealers, I discovered they use the exchange. That was the final piece of the jigsaw puzzle, and finally allowed me to convert my LTC via BTC to ZAR, i.e. turn some of my Litecoins into local currency. Finally I had a means to splash out on a smartphone without spending grocery money. has been advertising their Gobii Android smartphones starting at R999, but when I wanted to actually buy one there wasn't any stock. So I looked at the Hisense HS-U970 "dual sim" smart phone instead, since it was only R1,999 and the Gobii 4.5" phone was R1,699. The Hisense phone is slightly bigger, with a faster processor and bigger battery, so it looked like a good deal.
Over the weekend of 20 July I sold some of my Bitcoin (0.5117BTC) on, and was paid out on the Monday. I ordered my phone on 21st July 2014 from After some delay, I had the phone and its free cover by Friday 25th July 2104.
Update: The phone I got was faulty, and has been sent back to Kalahari. Also, Coinhuntr has closed its doors, so I am now mining with WeMineLTC. The degree of difficulty is much harder this year than last year, so I don't expect to earn more than 1 or 2 LiteCoins this year.
Update Friday 29 August: The refund came through from Kalahari, and I bought a replacement HS-U970 from the M-Web store in Cresta. This one seems to be working, and I'll post a review in a week or so. 
Update 9 December 2017: If I had kept my 0.5117BTC instead of using it on the phone, I could have paid for my car at today's outrageous exchange rate. 0.5117 Bitcoin equals R105,257.46. Hindsight is a cruel thing.