Bitcoins – Mining and Trading Jonathan Day, Carpe Diem 18 th July 2013

What is Bitcoin? An open source P2P digital currency Bitcoin is a digital currency, a protocol, and a software that enables Instant peer-to-peer transactions; Worldwide payments Irreversible by design; Almost no processing fee Relies on cryptography and p2p network – no central authority 21 million Bitcoins issued over 100+ years 11 million issued to date, worth > $1 bn, 10%+ changing hands monthly yb6p9C12Aa15PbQpfHG-D&feature=player_detailpage yb6p9C12Aa15PbQpfHG-D&feature=player_detailpage

Setting up to use Bitcoins Step 1 – get a Bitcoin Wallet Step 2 – create your Bitcoin Address Step 3 –Set up a Bitcoin Miner Step 4 – join a mining pool Step 5 – Give up and buy some coins, or look to Alt Coins ;) Step 6 – Don’t just hoard the coins, use them in commerce or at least sell them to mitigate price risk

Bitcoin Wallet Head to Download Bitcoin-QtBitcoin-Qt Use a software wallet not an online one! Encrypt with a strong password – Don’t Lose !! Make several backups on offline media Lots of space and time – 9 gigs and growing Has built in mining capability

Bitcoin Wallet

Bitcoin Address Using your Wallet software, create a Bitcoin Address You can create additional addresses as often as you need Usually looks like this: 1NJhki2Nhtd191tHkVuBoYiEBuKHemh5MZ Or you can be less anonymous, like this: 1JonDaywo5MmiBdvtacKw39EB53VtpqsUe

Bitcoin Address – Anonymous?

Mining Note – most Bitcoin users don’t mine. It is a competitive and fast moving business Initially – CPU in your PC Rapidly moved to AMD GPUs for x gain 600 mh/s, 300w power Development of FPGA devices 800 mh/s, 60w, power costs becoming important Development of ASIC – 100x increase 60+ gh/s, 400w

Mining Software Best option is currently ‘cgminer’ (or GUI Miner)

Mining Pool Solo mining with Bitcoin is now a non starter, Join one of the following Pools: Slush - BTC Guild -

Mining Equipment Started with the nice idea of a ‘gaming rig’ that would pay for itself; something like:

Mining Equipment But I was a year late and a Dollar short – This was the average rig by the time I started

Mining Equipment BFL – FPGA to the rescue $500 to buy $10 per day income 60 watts 832 mh/s Coin payout drop 

Alt Coins Litecoins with a Gaming Rig 3 x 7950 GPU 1000 watts Very hot $2-3 per day 

USB - ASIC The same power as a high end graphics card Same price But 5 watts vs 300+ $1 per day No payback But no heat!

AVALON - ASIC ASIC is here 66 gh/s 750 watts $ day ROI Now £100 pd

The Beast 3 x 80 gh/s 35 degrees + 3 kw Equiv to 250 GPUs

Mining Difficulty – SkyNet ??? +20% per 12 days, 225 TH/s or c 1m GPUs

Mining Conclusions Too late to get into Bitcoin mining due to: Difficulty rising 1.5% per day ASIC miner rigs the only viable option 3 month delays to get an ASIC miner Other options for mining: CPU – Try PrimeCoin GPUs - Litecoin – the Silver to Bitcoin’s gold

Trading B$ made the news due to extreme price rises and crashes Due to day traders getting interested

Trading Lots of online ‘Bureau De Change’ to swap $/£ to B$ MtGox.com, Cryptsy.com, BTC-e.com Slow, KYC, fees, but works

Volatile ? Compared to ? Gold has dropped c 25% in 2 months!

Buying Bitcoins New provider just arrived on the market: Bittylicious.com Swaps GBP to B$ in real time for 1% fee Works from Jersey

Using Bitcoins Any ecommerce sites should check out BitPay.com No set up cost No currency risk Minimal fees Access to $1bn worth of custom

A Gift Carpe Diem BitCoin ‘Faucet’ First 20 people to set up a Wallet and Bitcoin Address and send the address by to Will each be sent 0.25 BTC – c £15

How to spend your Bitcoins Go to carpediem.je Use your B$ to get Xero 4 Dummies For Free!

Opportunities for Jersey Gain revenue for ecommerce sites easily Tourism profile for coffee shop / pub Potentially good tax opportunities Questions?