Bitcoins – Mining and Trading

Jonathan Day, Carpe Diem

jon@carpediem.je

18th 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

http://www.youtube.com/watch?v=Um63OQz3bjo&list=WLDaLW09uZ1LZyb6p9C12Aa15PbQpfHG-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 http://bitcoin.org/en/choose-your-wallet

Download Bitcoin-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 50-100x gain 600 mh/s, 300w power

Development of FPGA devices 800 mh/s, 60w, power costs becoming important

Development of ASIC – 100x increase60+ gh/s, 400w

Mining Software

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

http://ck.kolivas.org/apps/cgminer/

Mining Pool

Solo mining with Bitcoin is now a non starter,

Join one of the following Pools: Slush - https://mining.bitcoin.cz/BTC Guild - https://www.btcguild.com

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

50-25 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

$1500

10 day ROI

Now £100 pd

The Beast3 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% feeWorks from Jersey

Using Bitcoins

Any ecommerce sites should check out BitPay.com No set up costNo currency riskMinimal feesAccess 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 email to jon@carpediem.jeWill 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 easilyTourism profile for coffee shop / pub Potentially good tax opportunities

Questions?