COINMONK

Whatisbitcoin
andbitcoinmining?

UnoBitSolutions
8/8/2013

www.CoinMonk.com

CoinMonkaimstobringbitcoinawarenesstothegeneralpublic.Weprovideawiderangeofrewarding
opportunitiestoinvestinbitcoinandbitcoinmininginitiatives.

Table of Contents
IntroductiontoBitcoin..................................................................................................................................................3
WhatisBitcoin?(abbreviatedasBTC)......................................................................................................................3
BenefitsofBitcoin.....................................................................................................................................................3
Peertopeertransactions(nosingleauthority)....................................................................................................3
Worldwidepayments............................................................................................................................................3
Almostnoprocessingfee......................................................................................................................................3
Pseudoanonymity................................................................................................................................................3
Irreversibility.........................................................................................................................................................4
Bitcoinaddress......................................................................................................................................................4
GlobalCurrency.........................................................................................................................................................5
Isitsecure?CanBitcoinbehacked?.........................................................................................................................5
WhatisBitcoinbackedby?.......................................................................................................................................5
WherecanIusebitcoins?.....................................................................................................................................6
Indiancommunity.................................................................................................................................................8
BitcoinMining................................................................................................................................................................9
25bitcoinsevery10minutes....................................................................................................................................9
DifficultyIncreasesevery14Days.............................................................................................................................9
InvestinBitcoinMiningShares.................................................................................................................................9
21millionbitcoinsby2140.......................................................................................................................................9
Howatransactioniscomplete................................................................................................................................10
CoinMonkProjects......................................................................................................................................................10
InvestinBitcoinMiningShares...............................................................................................................................10
PhysicalCoins..........................................................................................................................................................11
Contactus................................................................................................................................................................11
Usefullinksandcontacts.............................................................................................................................................12
Bitcoinfoundation...................................................................................................................................................12
Quickbitcoinaddressonline...................................................................................................................................12
JoinmeetupsinBangalore......................................................................................................................................12
Bitcoinglobalforum................................................................................................................................................12
BuyorsellbitcoininIndia.......................................................................................................................................12
Buybitcoinminingshares.......................................................................................................................................12

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Introduction to Bitcoin
CoinMonkaimstobringbitcoinawarenesstothegeneralpublic.Weprovideanopportunitytoinvestin
bitcoinsandbitcoinminingrelatedinitiatives.WeholdregularmeetupsforthemembersofCoinMonk
andbitcoinenthusiastswhichtakeplaceonceamonthinBangalore,India.Wediscussupcoming
opportunitiesofhowwemaybestimplementourbusinessgoals.
ForpeoplewhocannotmakeittoBangalore,wehaveatwopageintroductiontoBitcoinalongwithour
contactdetails.Wearehappytoprovidefreeconsultationoverthephonetothosewhomaybe
interestedinanyofourservices.

What is Bitcoin? (abbreviated as BTC)

Bitcoinisdefinedbywikipediaasacryptocurrencywherethecreationandtransferofbitcoinsisbased
onanopensourcecryptographicprotocolthatisindependentofanycentralauthority.Bitcoinscanbe
transferredthroughacomputerorsmartphonewithoutanintermediatefinancialinstitution.The
conceptwasintroducedina2008paperbypseudonymousdeveloperSatoshiNakamoto,whocalledit
apeertopeer,electroniccashsystem.

Benefits of Bitcoin

Bitcoinallowsanyonewithaninternetconnectiontosendorreceivepaymentsfromanywhereinthe
world,atalmostnocost.Bitcoin'suniquefeaturesincludepseudoanonymity,decentralizationand
irreversibility.Thetransactionsareprocessedbycomputers(ornodes)connectedtothenetwork.To
processthiskindoftransactionallnodesmaintainasharedledgerbalanceofeverybitcoinaddressthat
holdsthebalanceorthatheldsomebalanceinthepast.
Peer to peer transactions (no single authority)
Themoneysentwillreachtherecipientwithoutgoingthroughanyintermediarybankorexchangeor
paymentgateway.
Worldwide payments
Anyonemaysendaslittleorasmanybitcointoanyone,anywhereintheworldandthebitcoinwill
reachtherecipientquicklyandsafely.
Almost no processing fee
Thesendermaychoosetosendpaymentwithoutpayinganyprocessingfee.Thesendermaychooseto
addasmallpaymentfeetoprocesstransactionsfaster.Thenetworkrecommendedfeeis0.0005BTC,
whichisequivalenttoINR3.
Pseudo anonymity
Oneonlyneedstoprovidehis/herbitcoinaddresstothepersonwhoneedstosendhim/herbitcoin.
Therestoftheworldwillneverknowthereceiver'sbitcoinaddressunlessthereceiverorthesender
releasethebitcoinaddresstotheworld.

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Irreversibility
Onceabitcoinissent,thereisnowaytoreverseapaymentunlessthereceiversendsthebitcoinbackto
thesender.Thereisnosuchthingasa"chargeback"withbitcoin.Everycomputeronthenetworkcan
seehowmanybitcoinaparticularbitcoinaddressowns,buttheabilitytosendthebitcoinliesinthe
handsofthepersonwhoholdstheprivatekeyforthataddress(whichwillbesafeguardedbytheowner
ofthatbitcoinaddress).
Bitcoin address
Abitcoinaddress(alsoknownasabitcoinpublickey)isobtainedbyrandomlygeneratingtheprivatekey
andthenapplyingsomeirreversiblemathematicalcalculationsonit.
Abitcoinprivatekeylookslikethis:

5JTE3dDdnoTBUn4w4M8xdBYBWFcBXHFsFhFsPMQXuhh5vbdGFvg

Abitcoinaddresslookslikethis:

1653aikWii2nCq5DCypcVnHEHwZjZopg8J

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Global Currency
Bitcoinisanewformofcurrencythatisacceptedworldwideandcanneverbedebasedbypoliticians
tryingtogetreelectedorcountriestryingtopayoffhugedebts.Inaworldinwhichthevalueofpaper
moneyisconstantlyravagedbyinflation,that'saveryattractiveattribute.
Also,theworldisverymuchreadyfora"global"currency.Bitcoinsatisfiesthatneed.Bitcoinsarelike
cashinthattheyaren'ttiedtoyouridentity,andtransactionsmadewithBitcoinsareirreversibleand
untraceable.Butthey'relikecreditsinamannerthattheyaren'tphysical.

Is it secure? Can Bitcoin be hacked?

TheBitcoinalgorithmwaspresentedasascientificpaperandhasbeenpeerreviewedlikeanyother
scientificpaper.Thepaperwaswidelyacceptedandclearlydescribetheworkingfundamentalsof
Bitcoin.

What is Bitcoin backed by?

Whatisgoldbackedby?Whatdecidesthevalueofgold?Supplyanddemand.
WhatdecidesthevalueofBitcoin?Supplyanddemand.Likegold,theamountofBitcoinsislimitedto
21millionbitcoins.ThevalueofBitcoinisderivedthesamewaythevalueofgoldiscalculated.
ThewholepremiseofBitcoinisthatonlyafiniteamountofitwilleverbecreated.Thisisinstark
contrasttostandardcurrencies,thesupplyofwhichiscontinuallyincreased.

What causes the price of Bitcoin to fluctuate?

Bitcoinisinitsinfancyandisafreemarketcurrencywhosepriceorvalueisdeterminedbysupplyand
demand.AmultitudeoffactorscouldintheoryaffectBitcoinprices,nobodyinthecurrentscenariocan
concludethatonlyafewfactorsaffectBitcoin.Someofthefactorswhichhavebeenobservedtilldate
arelistedbelow:

Media Exposure
TheinitialgrowthoftheBitcoinecosystemandpriceswereattributedtomediahypeandmorepeople
becomingfamiliarwithbitcoin.TheworldssupplyofBitcoinsisfixed,butwhentheglobalmediatalks
aboutbitcoin,demandcontinuesrising.Thisincreaseindemand(andfixedsupply)leadstohigher
pricesandaspricesgoup,peoplewhocurrentlyholdbitcoindevelopgreaterexpectationsforthe
currency.Today,theexcitementaroundBitcoinisstillconfinedtoatinysegmentofthepopulation
technologyenthusiasts,monetaryidealistsandspeculatorsmakeupamajorityofbitcoiners.The
potentialforbitcoinexposureandpriceincreaseisverylarge.

Eurozone Crisis
AdirectcorrelationbetweentheCypressbailoutannouncementsandbitcoinpriceincreasewas
observed.ManyEuropeansmovedtheirinvestmentsintobitcoinaroundthesametimetheCypress
bailoutoccurred.Thisresultedinamassivehugecashinflowintothebitcoinecosystem.

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Hoarding
Likeanycurrency,bitcoinistradedonexchanges.Bitcoinholdershoardtheirbitcoin,whichfurther
reducessupply,whichinturnbooststhepriceandthensparksyetmoremediaattentionandthecycle
continuesuntilprofitsellingtakesplacelikeinanyothercurrency.

Fear of Government intervention

ThereisnothingillegalaboutBitcoin.Cashismoreanonymousthanbitcoinandisalsonottiedto
identity.Cangovernmentsgrowincreasinglyinterestedindefendingtheirpapermoneymonopoly?
We'vealreadyseenhintsofthis.Becausethebitcoinmarketisalreadyhugeandglobal,therewillbea
growingattemptstocontrolit,taxitandregulateit.

Trading exchange outages

TradingexchangeslikeMt.Goxwhichhandlealmost70%ofallbitcointradeshaveseentradinghalted
duetoDDOSattacks.Sucheventsareseentobetemporaryandthepricefallduetosuchattacksare
usuallyrecoveredwhentradingresumestonormallevels,leavingonlyatemporaryeffect.Smaller
exchangeshavebeenhackedduetoinsecuredesignofthewebsite.TheBitcoinalgorithm,systemand
frameworkitselfissound.Aswithanynewcreation,thereareglitchesandvulnerabilitiesthatstillneed
tobeworkedout.

Vendor acceptance
Bitcoinsremainverymuchanichepaymentmethod.Inacceptingthecurrency,thereisasmallcircleof
largeinternetcompaniesparticipatingintheecosystem.ThisincludesWordPress,whichwillsellyou
everythingfromWebhostingtoCSSpackagesinexchangeforbitcoins.WikiLeaksand4chanarepartof
agrowinglistofonlineorganizationsthatacceptBitcoindonations.Asvendoracceptanceimproves,the
valueofbitcoinasacurrencyimproves.

Free market currency

Beinginitsinfancy,bitcoinwillseewildpriceswingsuntilitbecomesestablishedasaglobalcurrency.
Themarketisstillinaprice'discoverystage'andisexpectedtostabilizeatacertainpoint.

Where are bitcoins stored? What is a bitcoin address?

Bitcoinscanbestoredonyourcomputerusingawalletsoftware(equivalenttothewalletinyour
personalpocket)whichisopensourceandcanbedownloaded,orinanonlinewallet.Bothmethods
provideyouwithanaddresswhichyouusesimilartoapaypaladdress.Sendtheaddresstopeoplefrom
whowantyoutoreceiveBitcoinfrom.YoucanmineBitcoinorbuythemfromtradingexchanges.To
storethemyoucanuseSoftware,MobileorWebwallets.
Downloadawallet:http://bitcoin.org/en/chooseyourwallet
Where can I use bitcoins?
Itturnsoutthatonceenoughcompaniesacceptbitcoinsthatyouwillbeabletousethemtobuyalmost
everythingyoumightneed.Wanttobuyclothing,homemadecosmeticsortraintickets?Bitcoinscando
allthat,andmore.
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Morethan8000smallorganizationshavestartedacceptingBitcoins.Itisexpectedthatitisjustamatter
oftimebeforerealworldadoptionincreases.Ecommercewebsitesareexpectedtojoinsuite.

Here is a small list of known Top 20 Bitcoin accepting organizations:

1)Wordpress
2)PirateBay
3)Reddit
4)InternetArchive
5)4chan
6)eztv.it
7)Lumfile
8)Filecloud
9)TorrentLeech
10)LewRockwell
11)Gyft
12)Slysoft
13)LAIMC
14)WrapBootstrap
15)TorProject
16)What.CD
17)Erowid
18)Wikileaks
19)MtGox
20)GoldMoney

Indian sites
http://buysellbitco.in
http://indiabitcoin.com
https://rbitco.in
http://http://www.bitocean.in

The official list of Bitcoin accepting organizations can be found below

https://en.Bitcoin.it/wiki/Trade
https://en.Bitcoin.it/wiki/Business_and_organizations_that_%22also_accept_Bitcoin%22,_but_do_no
t_revolve_around_Bitcoin

What is the real advantage and use of buying Bitcoins?

Strengths
Nondiscriminating;singleGlobalcurrency
Increasingpopularityanddesignedfortheinternet.
Caneasilybeexchangedwithconventionalcurrencies.
Securedbymathematicsandcryptography,nottrust.
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Limitednumberofcoinswilleverbeproduced(capat21million),thusnoinflation.
ForBitcoin,nothirdpartyisrequiredasaclearinghouselikebanks.Currently,noexchange
commissionsortaxes.

Opportunities
Toreplaceglobalcurrenciesortakeaportionofthemarket.
Becomearelevantcurrencyforglobalonlinetrade.

Role of Bitcoin in daily life?

Fiatpapercurrenciesarearelicofapastage.Ithasbeenproventobeaspectacularfailure,givingrise
toinflationsandunendingboomsandbusts.Astechnologyprogresses,marketslookforanalternative.
Asingleglobaldigitalcurrencyiscertainlyinourfuture.Bitcoinisthemostsuccessfulexampleofthat
sofar.
Bitcoincanbeeasilyusedforinternationaltransferswithoutpayingcommissionstothirdpartieslike
banks.Bitcoincutsdowntransactiontimesforbankwiresfromdaystohours.Bitcointalk.orghasan
Indian community
BitcoincanbeusedasacurrencyforinvestmentfortradinginIndiauntilvendoracceptancereaches
criticalthreshold.Beinganearlyadopterhasmanyadvantages.Simplyput,since2009therehasbeen
noassetclassontheplanetwhichhasincreasedinvaluemorethanBitcoin.Asentrepreneursand
investors,thatmakesbitcoinextremelyrelevant.Asanentrepreneur,bitcoinscanhelpyoureachoutto
aninternationalclientele,itssinglewindowpaymentallowscustomerreachtoanycountrywithoutthe
hasslesofinternationalwiretransfers.

Final thoughts
ItisalwaysprudentonyourparttoviewBitcoinsobjectivelyandarriveatitsvalueinyourlife.Inmy
view,BitcoinistheInternet,appliedtoMoney.MoneyoverIP,MOIP.Weneedtorememberthat
Bitcoinisnotastock,acompany,agovernmentorevenaregularcommodity.Itisatechnology.Bitcoin
isbothacurrencyandapaymentsystem.Rightnow,itsmostspectacularuseisintransferringfunds
fromonepersontoanother.Itsaseasyassendingatextmessageoranemail.Weliveinadigitalage.
Weneedadigitalcurrency.

AdditionalInfo:
Fortheacademicallyinclined:
http://codinginmysleep.com/khanacademybitcoinvideos/

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Bitcoin Mining
25 bitcoins every 10 minutes
Tohelpwithauditingthetransactionprocessofsendingandreceivingbitcoins,bitcoinminerscomeinto
thepicture.Thegenerationofbitcoinsaredonebysupercomputersdedicatedtowardsprocessing
mathematicallycomplexcalculations.Minersmustinvestcomputerprocessingpowerandelectricityto
minebitcoinsandarecurrentlyawarded25bitcoinsevery10minutesbythebitcoinnetwork.

Difficulty Increases every 14 Days

Theprotocolisdesignedinsuchawaythatthemathematicalproblemwillgetmoreandmoredifficult
overtime.Analogoustohowgoldmininggetsmoredifficultovertime,sodoesbitcoinmining.The
overalldifficultyofbitcoinminingonthenetworkselfadjustsevery14days.

Invest in Bitcoin Mining Shares

Thepeoplewhoengageinsuchactivitiesareknownasminersandtheprocessitselfiscalledmining.To
minetodayyouneedasic(applicationspecificintegratedchips)hardware,averyreliableinternet
connectionandconsiderableelectricalpowerrequirements.Theotheroptionistoparticipateinbitcoin
miningbypurchasingminingsharesissuedbyvariousminersorsellersofthoseshares.

21 million bitcoins by 2140

Thecoinsgeneratedinthisfashionareawardedtotheminer.Thetotalcoinsgeneratedtodatethrough
miningisnearly11.5millionandthatisthetotalnumberofcoinsavailableforcirculationtoday.The
coinsawardedtominersarehalvedevery4years.Whenbitcoinwasfirstintroducedbackin2009,
minerswereawarded50coinsevery10minutesuntiltheendof2012.Today,minersareawarded25
coinseverytenminutes.Intheyear2017itwillreduceto12.5coinsevery10minutes.Thiswillcontinue
inthisfashionupto2140afterwhichthetotalcoinsinexistencewillbe21million.Themining
operationwillbeyieldinganegligibleamountofbitcoins(somethinglike0.000001every10minutes).
From2140onwards,minerswillbecompensatedbasedontransactionfees.Thetransactionsoccur
wheneverasendersendsmoneytoabitcoinaddress.Thesetransactionswillpropagatethroughthe
networkwhereitgetsrecordedinagloballedgercalledblocksbyallnodesconnectedtothenetwork.
TotalBitcoinsOverTime

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How a transaction is complete

IfMr.Xholdsabitcoinaddress,allsuchnodesknowhowmanycoinsarebeingheldbythataddress.
Thenodeswillapproveifandonlyifthebitcoinaddresshascoinstosendfromthataddresstoanother
address.Oncethetransactioniscomplete,thedistributedledgerisupdatedwiththenewreduced
numberofcoinsthattheaddressholdsandatthesametimeincreasesthenumberofbitcoinsforthe
receivingaddress.IfMr.Xpaysatransactionfee,itwillbepreservedandawardedtothenodethat
startsanewpageoftheledger(block)alongwith25BTCforstartingthatnewblock.
Therearealreadynumerouswebsitesthatacceptbitcoinfordigitalandphysicalgoods.Everyday,more
andmoremerchantsfromaroundtheworldarebeginningtoacceptbitcoin.Ifyouarenotinterestedin
mining,youcanbuybitcoinsfromexchangeslikeMt.Goxorfromtrustedpeopleinyourlocality.Based
onthelimitedavailabilityofbitcoins(21million)andthedifficultyingeneratingbitcoinsthroughmining,
itisexpectedthatasdemandincreases,eachbitcoinwillbecomesincreasinglymorevaluableovertime
thisultimatelymeanshigherpurchasingpowerinthefuture.

CoinMonk Projects
Invest in Bitcoin Mining Shares
CoinMonkhasbeeninvestinginmininghardwareandnowisyour
opportunitytoholdsharesfrombitcoinminingprofits.Purchasingand
transferringofsharesmayonlybedoneasawhole(youcannotbuyor
transfer0.5shares).Profitsarecalculatedasminingrevenueminus
expenses.Dividendsaredividedequallytoeveryactivesharefrom95%of
profitsearned.Remaining5%oftheprofitsshallbereinvestedto
purchasemoreadvancedbitcoinminingequipment.Thiswillbedonein
anattempttostayatparwithindustrystandardswithregardtohashing
ratesandwithouthavingtofrequentlyoffernewshares.Ifsuchreserve
exceedsourestimatesofnewminingequipment,wewillstartdividing
100%ofprofits.Howeverwhenitistimetobuynewminingequipmentandifthat5%isstillnot
sufficient,wemayoffermoresharesatthatpointintime.Restassuredthateverydecisionwetakewill
betomaximizethedividendstoshareholders.Presently,ourminingpremiseisequippedwith
redundantmultipleISPsandpowerbackups.Theinvestorisresponsiblefordoing
theirduediligencepriortoinvestingandmustconsider:1)thevolatilenatureof
bitcoin2)growinghashingpowerofthenetworkand3)keepinginmindthat
purchasingsharesisanirreversibleprocess.Theinvestmenttosharesisnon
refundableandnonredeemableforsomeotherserviceorproduct.Wewilldoour
besttoadoptindustrylevelstandardsofprotectingtheminingcenterwithneeded
humanandbuildinglevelsecurity.Investorsdoneedtoacceptthepossibilityofa
breachofsuchsecurityorsomerandomactofgod.Goaheadwithinvestingifyou
reallyunderstandfullywhatexactlyyouareinvestingfor.Thesetermsand
conditionsaresubjecttoslightmodificationsforthebenefitofshareholders.
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Physical Coins
CoinMonkwillbeofferingphysicalbitcoinsinanattempttobringawarenessofbitcointothecommon
public.Prototypesforphysicalbitcoinsareavailableforpurchaseandplanneddenominationswillbe
0.01BTC,0.1BTCand1BTC.

Contact us
CoinMonkisrunbyIndiaBitcoinmeetupgroupinBangalore,India:http://www.IndiaBitcoin.com

Ifyouhaveageneralbitcoinquestion,pleaserefertothebitcointalk.orgwebsite.The
http://www.coinmonk.comwebsiteislookedafterbyDashingRiddlerusernameisdashingriddleron
bitcointalk.orgwebsite.

Youcanuseoursupportticketsystemtocontactus.Ifyouhaveanyquestionsorconcerns,please
contactusoveremail,youmayreachusatdashingriddler@gmail.com.

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Useful links and contacts

Bitcoin foundation
http://www.bitcoin.org(visitheretogetwallets)

Quick bitcoin address online

http://www.bitaddress.org

Join meetups in Bangalore

http://www.meetup.com/IndiaBitcoin/

Bitcoin global forum

http://www.bitcointalk.org

Buy or sell bitcoin in India

http://www.buysellbitco.in

Buy bitcoin mining shares

http://www.coinmonk.com

www.CoinMonk.com

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