Bitcoin Overview & Investment Proposal

tangibleassistantSoftware and s/w Development

Dec 3, 2013 (3 years and 7 months ago)

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1Prepared by Derek Leong
BitcoinOverview & Investment Proposal
What is Bitcoin(BTC)?
Here is a short video on the overview of Bitcoin.
http://www.youtube.com/watch?v=Um63OQz3bjo
How to obtain Bitcoins(BTC)?
OneofthemethodstoobtainBTCswouldbe
tobuythemoffsomeonewhoalreadyhas
themorbuyBTCsoffexchanges.
Alternatively,ifyouhaveaskillorservice,
youcanworkforBTC!
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ThefocusofthispresentationisonBitcoin
Mining–Themethodof“printingmoney”.In
thiscase,mintingBitcoins.
Acommonmethodwouldbetominefor
Bitcoins,whichrequirescommodityIT
hardwarebutpreferablyhighlyspecialized
equipment.
How to mine Bitcoins?
Bitcoinmintingrequiresinternetaccess,aMiningsoftwareand
hardware
to
perform
the
required
complex
calculations
also
known
as
hashing
.
All
hardware
used
in
Bitcoin
mining
are
Prepared by Derek Leong4
hardware
to
perform
the
required
complex
calculations
also
known
as
hashing
.
All
hardware
used
in
Bitcoin
mining
are
measuredbytheirhash-per-secondperformance(h/s).
How fast can Bitcoinbe mined?
•GenerationofBTCdependson2majorfactors
•NetworkDifficulty
•Hashrateofhardware
•Asanexample,a1Gh/s(Gigahash)miner
would
mine
0
.
02600483
BTC/day
at
today’s
would
mine
0
.
02600483
BTC/day
at
today’s
difficulty(19,339,258difficulty)
•Thatwouldmean,excludingotherexpenses
likepowerandcooling,thisminerismaking
USD$2.81/day
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What is Network Difficulty?
•Bitcoinminers produce Bitcoins.
•The rate of production is kept to approx. every
10 minsby the Bitcoinnetwork.

Every 2016 blocks of generating
Bitcoins
, the

Every 2016 blocks of generating
Bitcoins
, the
network automatically adjusts difficulty to
maintain that 10 minstimeframe of BTC
production.
•Thus, the more miners there are, the higher
difficulty will rise.
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Network Difficulty Growth (est.)
Start of PeriodEnd of PeriodEstimated DifficultyAverage Diff Growth
Monday, July 01, 2013Sunday, July 14, 201323,263,193.4520.29%
Monday, July 15, 2013Sunday, July 28, 201327,983,295.4020.29%
Monday, July 29, 2013Sunday, August 11, 201333,661,106.0420.29%
Monday, August 12, 2013Sunday, August 25, 201340,490,944.4520.29%
Monday, August 26, 2013Sunday, September 08, 201348,706,557.0820.29%
Monday, September 09, 2013Sunday, September 22, 201358,589,117.5120.29%
Monday, September 23, 2013Sunday, October 06, 201370,476,849.4520.29%
Monday, October 07, 2013Sunday, October 20, 201384,776,602.2120.29%
Monday, October 21, 2013Sunday, November 03, 2013101,977,774.7920.29%
Monday, November 04, 2013Sunday, November 17, 2013122,669,065.3020.29%
Monday, November 18, 2013
Sunday, December 01, 2013
147,558,618.65
20.29%
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Monday, November 18, 2013
Sunday, December 01, 2013
147,558,618.65
20.29%
Monday, December 02, 2013Sunday, December 15, 2013177,498,262.3720.29%
Monday, December 16, 2013Sunday, December 29, 2013213,512,659.8120.29%
20.29%difficultyincreaseisderivedfromtakingalldifficultychangessofarsince
2009,andaveragingthechangesout.
Sincedifficultyadjustmentshappenapprox.everyfortnight,thischartpredicts
thatdifficultyattheendof2013tobeat213M!
Thatsame1Gh/sminerusedearlierwouldonlybeminingUSD$0.25/dayatthe
endoftheyear.
Hashrateof Hardware
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Intel & AMD CPUs
Very low hashrate(Kh/s)
Widely available
AMD RadeonGPUs
Good hashrate(Mh/s)
High power consumption
Widely available
Re-sellable for gaming
applications
https://en.bitcoin.it/wiki/Mining_hardware_comparison
Hashrateof Hardware
Field Programmable Gate Arrays
Application Specific Integrated
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Field Programmable Gate Arrays
(FPGA)
Good hashrate(Mh/s)
Low Power Consumption
Not so widely available
Re-sellable for re-programming
purpose
Application Specific Integrated
Circuit (ASIC)
Very high hashrate(Gh/s)
Low Power Consumption
Not widely available as yet
Not resellablefor other
purposes
KNCminerASIC
Profitability Calculator & ROI
Start of PeriodEnd of PeriodEstimated DifficultyAverage Diff GrowthBTC/dayBTC/2 weeksUSD/2 weeks
Monday, September 23, 2013Sunday, October 06, 201370,476,849.4520.29%1.2487786317.482900821,892.17
Monday, October 07, 2013Sunday, October 20, 201384,776,602.2120.29%1.0381400214.533960281,573.01
Monday, October 21, 2013Sunday, November 03, 2013101,977,774.7920.29%0.8630310212.082434281,307.68
Monday, November 04, 2013Sunday, November 17, 2013122,669,065.3020.29%0.7174586610.044421241,087.11
Monday, November 18, 2013Sunday, December 01, 2013147,558,618.6520.29%
0.59644082
8.35017148903.74
Monday, December 02, 2013Sunday, December 15, 2013177,498,262.3720.29%
0.49583575
6.9417005751.30
Monday, December 16, 2013Sunday, December 29, 2013213,512,659.8120.29%
0.4122003
5.7708042624.57
8,139.59
Taking
into
account
an
October
delivery
timeframe,
above
shows
profitability
of
Prepared by Derek Leong11
Taking
into
account
an
October
delivery
timeframe,
above
shows
profitability
of
theSaturnuniteveryfortnightuptilltheendoftheyear.(assumingasteady
20.29%growthindifficulty)
Thus,iftheunitarriveslateSeptember,totalUSDearnedwouldbeatUSD$8.1kat
theendof2013andROIwouldbesomewherearoundtheweekofOctober21.
Conditions of Venture
•ThisproposalistoseekSGD$6000offundingforthepurchaseof1Saturn
ASICfromKNCminerforthepurposeofminingforprofit.
•Thefundswillbeusedfortheacquisition,hostingandmanagementofthe
miner.Anythingleftoveriskeptandallshareholderswillhaveequalstake
todecidewhattodowiththeremainder.

Equal
shares
costing
SGD
$
300
each
(total
of
20
shares)
will
be
available
for

Equal
shares
costing
SGD
$
300
each
(total
of
20
shares)
will
be
available
for
purchaseforthisventure.
•Uponhittingtherequirednumberofshares,aninterbanktransferwillbe
madetoKNCminertosecuretheorder.
•Oncedeliveryhasbeenmade(approx.October),minerwillbesecuredat
either(1)alocaldatacenterwithunlimitedpower/coolingor(2)atmy
homewhereIwilldeductelectricalpowercostsfromprofitsonamonthly
basis.
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Conditions of Venture
•TheimmediateprioritywillbetoROItheventure.Uponminingthe
equivalentofSGD$6000,ashareholdermeetingwillbecalledtodecideif
allshareholderswillbepaidouttheirinitialinvestment.
•Allprofitsfromsubsequentminingwillremainequallydistributedtoall
shareholdersuptoapointwhereitisnolongerprofitabletorunthe
Saturnunit.

Should
it
become
no
longer
profitable
to
operate,
the
unit
will
be
resold

Should
it
become
no
longer
profitable
to
operate,
the
unit
will
be
resold
andallproceedsincludingallremainingprofitssplitequallytoall
shareholders.
•Shouldashareholderdecidetoexitforwhateverreason,his/herequal
shareatthatpointintimewillbecalculatedandpaidout.Subsequent
profitswillthenberedistributedtoremainingshareholders.Donotethat
exitingshareholderwillnotqualifyfortheproceedsofsaleoftheSaturn
shouldithappeninfuture.
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Conditions of Venture
•Payoutswillbedecidedduringshareholders’meetingsifitwillbeinthe
formofSGDorBTC.LiquidatingmighttaketimeshoulditbeinSGD.
•Reinvestingformorehardwarecanbeconsideredbutwilldependon
shareholders.Donotethathostingwithfreepower/coolingislimitedand
maynotbeavailable.
•Commitmentbymyselftoupdateallshareholdersregularly,possiblyona
blog,
on
the
status
of
all
balances,
including
leftover
from
initial
blog,
on
the
status
of
all
balances,
including
leftover
from
initial
SGD$6000,andprofitsfrommining,inBTCand/orSGD.
•Thereisnocommitmentfor24/7operations.Theremaybetimeswhere
networkissuesmayhaltminingandresumptionofminingisonabest
effortbasis.Notethattheonlyshowstopperisinternetconnectivity.
Power/coolingisguaranteed24/7.
•Ireservetherighttoadd/removeotherconditionsdependingonthe
situationbutwillassurethatitwillbedonetomaximizeshareholders
benefitsinthisventure.
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