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Bitcoin Overview & Investment Proposal

What is Bitcoin (BTC)?

Here is a short video on the overview of Bitcoin.

http://www.youtube.com/watch?v=Um63OQz3bjo

Where you can spend your BTCs. Growing # of merchants.

http://www.forbes.com/sites/jonmatonis/2013/05/24/top

-10-bitcoin-merchant-sites/

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-10-bitcoin-merchant-sites/

https://en.bitcoin.it/wiki/Bitcoin_Ladder

Of course, investing in BTCs are also possible. There are a few

exchanges to liquidate BTCs to SGD/USD and many others!

https://www.fybsg.com/

https://mtgox.com/

How to obtain Bitcoins (BTC)?

One of the methods to obtain BTCs would be

to buy them off someone who already has

them or buy BTCs off exchanges.

Alternatively, if you have a skill or service,

you can work for BTC!

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The focus of this presentation is on Bitcoin

Mining – The method of “printing money”. In

this case, minting Bitcoins.

A common method would be to mine for

Bitcoins, which requires commodity IT

hardware but preferably highly specialized

equipment.

How to mine Bitcoins?

Bitcoin minting requires internet access, a Mining software and

hardware to perform the required complex calculations also

known as hashing. All hardware used in Bitcoin mining are

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hardware to perform the required complex calculations also

known as hashing. All hardware used in Bitcoin mining are

measured by their hash-per-second performance (h/s).

How fast can Bitcoin be mined?

• Generation of BTC depends on 2 major factors• Network Difficulty

• Hashrate of hardware

• As an example, a 1 Gh/s (Gigahash) minerwould mine 0.02600483 BTC/day at today’swould mine 0.02600483 BTC/day at today’sdifficulty (19,339,258 difficulty)

• That would mean, excluding other expenseslike power and cooling, this miner is makingUSD$2.81/day

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What is Network Difficulty?

• Bitcoin miners produce Bitcoins.

• The rate of production is kept to approx. every 10 mins by the Bitcoin network.

• Every 2016 blocks of generating Bitcoins, the • Every 2016 blocks of generating Bitcoins, the network automatically adjusts difficulty to maintain that 10 mins timeframe of BTC production.

• Thus, the more miners there are, the higher difficulty will rise.

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Network Difficulty Growth (est.)Start of Period End of Period Estimated Difficulty Average Diff Growth

Monday, July 01, 2013 Sunday, July 14, 2013 23,263,193.45 20.29%

Monday, July 15, 2013 Sunday, July 28, 2013 27,983,295.40 20.29%

Monday, July 29, 2013 Sunday, August 11, 2013 33,661,106.04 20.29%

Monday, August 12, 2013 Sunday, August 25, 2013 40,490,944.45 20.29%

Monday, August 26, 2013 Sunday, September 08, 2013 48,706,557.08 20.29%

Monday, September 09, 2013 Sunday, September 22, 2013 58,589,117.51 20.29%

Monday, September 23, 2013 Sunday, October 06, 2013 70,476,849.45 20.29%

Monday, October 07, 2013 Sunday, October 20, 2013 84,776,602.21 20.29%

Monday, October 21, 2013 Sunday, November 03, 2013 101,977,774.79 20.29%

Monday, November 04, 2013 Sunday, November 17, 2013 122,669,065.30 20.29%

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, 2013 Sunday, December 15, 2013 177,498,262.37 20.29%

Monday, December 16, 2013 Sunday, December 29, 2013 213,512,659.81 20.29%

20.29% difficulty increase is derived from taking all difficulty changes so far since

2009, and averaging the changes out.

Since difficulty adjustments happen approx. every fortnight, this chart predicts

that difficulty at the end of 2013 to be at 213M!

That same 1 Gh/s miner used earlier would only be mining USD$0.25/day at the

end of the year.

Hashrate of Hardware

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Intel & AMD CPUs

Very low hashrate (Kh/s)

Widely available

AMD Radeon GPUs

Good hashrate (Mh/s)

High power consumption

Widely available

Re-sellable for gaming

applications

https://en.bitcoin.it/wiki/Mining_hardware_comparison

Hashrate of 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 resellable for other

purposes

KNCminer ASIC

This proposal is to seek funds from interested investors to

share in the purchase of a Saturn unit from

www.kncminer.com which costs approx USD$4000 including

shipping/handling.

This unit is spec’ed to perform at least 175Gh/s using

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This unit is spec’ed to perform at least 175Gh/s using

maximum power draw of 0.5kWh.

In Singapore’s context, that would be around

SGD$105/month in electrical bills.

Expected ship date would be in October 2013.

Profitability Calculator & ROI

Start of Period End of Period Estimated Difficulty Average Diff Growth BTC/day BTC/2 weeks USD/2 weeks

Monday, September 23, 2013 Sunday, October 06, 2013 70,476,849.45 20.29% 1.24877863 17.48290082 1,892.17

Monday, October 07, 2013 Sunday, October 20, 2013 84,776,602.21 20.29% 1.03814002 14.53396028 1,573.01

Monday, October 21, 2013 Sunday, November 03, 2013 101,977,774.79 20.29% 0.86303102 12.08243428 1,307.68

Monday, November 04, 2013 Sunday, November 17, 2013 122,669,065.30 20.29% 0.71745866 10.04442124 1,087.11

Monday, November 18, 2013 Sunday, December 01, 2013 147,558,618.65 20.29% 0.59644082 8.35017148 903.74

Monday, December 02, 2013 Sunday, December 15, 2013 177,498,262.37 20.29% 0.49583575 6.9417005 751.30

Monday, December 16, 2013 Sunday, December 29, 2013 213,512,659.81 20.29% 0.4122003 5.7708042 624.57

8,139.59

Taking into account an October delivery timeframe, above shows profitability of

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Taking into account an October delivery timeframe, above shows profitability of

the Saturn unit every fortnight up till the end of the year. (assuming a steady

20.29% growth in difficulty)

Thus, if the unit arrives late September, total USD earned would be at USD$8.1k at

the end of 2013 and ROI would be somewhere around the week of October 21.

Conditions of Venture

• This proposal is to seek SGD$6000 of funding for the purchase of 1 Saturn

ASIC from KNCminer for the purpose of mining for profit.

• The funds will be used for the acquisition, hosting and management of the

miner. Anything left over is kept and all shareholders will have equal stake

to decide what to do with the remainder.

• 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

purchase for this venture.

• Upon hitting the required number of shares, an interbank transfer will be

made to KNCminer to secure the order.

• Once delivery has been made (approx. October), miner will be secured at

either (1) a local datacenter with unlimited power/cooling or (2) at my

home where I will deduct electrical power costs from profits on a monthly

basis.

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Conditions of Venture

• The immediate priority will be to ROI the venture. Upon mining theequivalent of SGD$6000, a shareholder meeting will be called to decide ifall shareholders will be paid out their initial investment.

• All profits from subsequent mining will remain equally distributed to allshareholders up to a point where it is no longer profitable to run theSaturn unit.

• 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 resoldand all proceeds including all remaining profits split equally to allshareholders.

• Should a shareholder decide to exit for whatever reason, his/her equalshare at that point in time will be calculated and paid out. Subsequentprofits will then be redistributed to remaining shareholders. Do note thatexiting shareholder will not qualify for the proceeds of sale of the Saturnshould it happen in future.

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Conditions of Venture

• Payouts will be decided during shareholders’ meetings if it will be in theform of SGD or BTC. Liquidating might take time should it be in SGD.

• Reinvesting for more hardware can be considered but will depend onshareholders. Do note that hosting with free power/cooling is limited andmay not be available.

• Commitment by myself to update all shareholders regularly, possibly on ablog, on the status of all balances, including leftover from initialblog, on the status of all balances, including leftover from initialSGD$6000, and profits from mining, in BTC and/or SGD.

• There is no commitment for 24/7 operations. There may be times wherenetwork issues may halt mining and resumption of mining is on a besteffort basis. Note that the only showstopper is internet connectivity.Power/cooling is guaranteed 24/7.

• I reserve the right to add/remove other conditions depending on thesituation but will assure that it will be done to maximize shareholdersbenefits in this venture.

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