EDISONS REVENGE:

Cashing in on Bitcoins Unprecedented Windfalls

Not so long ago, monetary skeptics would sometimes place a suspect

coin between their teeth and bite it a rudimentary but fairly effective
means of testing the quality of the metal comprising the coin and thus
verifying the validity of the bit coin as legal tender.
Today, a Bitcoin is something entirely different composed not of
metals, but of electronic ones and zeros. Like the bit coins of old, the
modern Bitcoin is a payment system one that can be used to finance
the purchase and sale of goods and services, as well as to transfer funds
between individuals or institutions. However, its operation is far more by Michael A. Robinson
Founder & Editor
efficient than coins, paper money or any other more conventional method Nova-X Report
of payment.
More importantly, todays Bitcoin isnt meant to verify the validity
of a monetary unit, but rather to challenge the commercial role of
government-issued currencies and provide a means for individual
investors and businesspeople to protect themselves from the
whims of regulators (read the Fed and officials of international
Treasuries), whose capricious actions can create economic
perils ranging from stagnation or inflation to outright panic and
financial collapse.
Thats a fairly substantial task for a form of money most people have
never even heard of or, know very little about.
But, if youre one of those people, you shouldnt feel badly and you definitely shouldnt
stop reading.
By the time you finish this report and watch my presentation on the accompanying video
discs youll know how to not only acquire Bitcoins and use them to pay for almost anything, but
also to make potentially huge profits as this exciting new crypto-currency gains in popularity
and increases in value.

A NEW CONCEPT WITH HISTORIC ROOTS

The primary reason so many people lack familiarity with todays Bitcoins is that theyre
actually quite new, the first ones having been created or mined as the Bitcoin world describes
the process a mere five years ago.
Of course, the use of currencies to facilitate trade dates back thousands of years first
taking the form of physical goods ranging from live cattle to rare seashells.

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This evolved into using coins of bronze, copper

or precious metals. Then came paper bills, initially
introduced by the Chinese around 800 A.D., but not
commonly adopted until the 17th century when nation-
states with organized governments replaced fiefdoms
and limited monarchies.

Finally came todays combination of government-

backed coins and bills, or privately sponsored debit
cards, credit cards and payment services such as Shell Money
PayPal (the latter, of course, all generating fees for the financial institutions managing them).

Even the Bitcoin concept i.e., that of a currency independent of governments, banks and
the manipulative players running both dates back nearly a century.

And it came from a somewhat surprising source: Thomas Alva Edison, best known for his
1879 invention of the first practical, long-lasting electric light bulb.

THE GENIUS OF THOMAS EDISON

Edisons genius spread across a wide array of scientific disciplines, with a focus on
communication.

His world record of 1,093 patents granted (which still stands) included
ideas for creating or improving the telegraph, phonograph, movie cameras,
printing processes, phone switches, electric circuits and even typewriters.

However, he was also a student of economics and he was greatly

troubled by the financial system he witnessed in the wake of World War I,
which featured wide fluctuations in the value of the dollar and other major
currencies, as well as rampant inflation in much of the world.

Edison distrusted banks and the men running them dubbing them the
money brokers and he had little faith in a monetary system based solely on Thomas Edison
gold. He envisioned a currency backed by a much broader basket of commodities
one diverse enough to cast the variable out of money and proposed setting up a network of
commodity banks across the country.

His plan called for the federal government to build massive warehouses in strategic locations
and have Americas farmers stock them with their wheat, corn, sugar, cotton and other crops and
commodities.

Edisons proposal to use these commodities as the underpinnings for a new currency one
dubbed by cynics as Ford-Edison money because auto magnate Henry Ford also endorsed the
concept was quickly rejected by the people of his day.

However, Edisons idea didnt die and, in fact, has gained steadily increasing support in recent
years, largely because thinking people are simply fed up with the current global money situation.

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Dollars, euros, yen, yuan, the pound, the franc... pick a modern currency. All are just
fiat instruments, backed by little but the vague promises of the governments issuing them
governments that think nothing of wildly printing more and more money, severely diluting the
purchasing power of their citizens.

Governments are populated by politicians willing to rack up obscene amounts of public debt
with barely a second thought more than $17 trillion for the U.S. alone. (The use of physical
money itself even contributes to government debt U.S. and Canadian pennies now cost more
than their face value to mint, and a bill was introduced in Congress just last summer calling for
the elimination of the dollar bill because of high printing expenses and poor durability.)

Worse still, these governments and politicians are increasingly intrusive and big business
isnt far behind all using the movement of money to monitor our financial activities, probe
sensitive private affairs and discern our preferences in all facets of our personal lives.

In short, more and more people are coming to believe that, as with so many other things,
Edison was right about money. As a result, old Tom may soon get revenge for his earlier ridicule
thanks to the coming of Bitcoin.

WHAT EXACTLY IS BITCOIN ANYWAY?

As already noted, Bitcoin, despite its name, doesnt use any coins nor does it employ paper
bills, seashells, cows or any other form of physical trading unit. Its a virtual currency,
existing only in computers and data banks, much like the virtual worlds featured in popular
video and online games.

Its built on the notion that money is any object (or any sort of record) accepted as payment
for goods and services and repayment of debts in a given country or socio-economic grouping.
Bitcoin uses cryptography to control the creation and transfer of money, rather than relying on
governments or central banking authorities.

As such, Bitcoin transactions are essentially pseudonymous in that they arent tied directly
to a specific individual or a real identity. Transfers for purchase, sales, loans or any other types
of payment can be processed by anyone, using a desktop computer, a laptop, tablet or even
smartphone without the need for a financial institution to act as an intermediary or recording
agent (accounts are coded and balances maintained in a constantly updating ledger).

Thats the main reason the primary promoters and users of Bitcoin at this stage are members
of the younger generation, a generation born and raised in The Digital Age a generation
completely comfortable with computers, cryptographic codes, the Internet, online commerce and
most other things electronic.

To these individuals, the traditional monetary system seems slow and cumbersome, and
the idea of operating in a world where ones economic well-being and financial activity is both
dictated and constantly monitored by government is repugnant.

Given that, this digital generations eventual goal is the complete reinvention of the monetary
and financial world, with the first step being the creation of Bitcoin described by its creator as a
peer-to-peer electronic cash system operating via file-sharing technology.

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And who is that creator?

A BRIEF HISTORY OF BITCOIN

Well, no one knows for sure. While Edison had the original idea underlying Bitcoin, credit
for its actual creation goes to Satoshi Nakamoto, an alleged software developer who unveiled the
concept in an academic paper published in 2009.

That was quickly followed by the release of the first Bitcoin software, known as Bitcoin-Qt,
under license from the Massachusetts Institute of Technology (MIT).

Nakamoto himself mined the first 50 Bitcoins on Jan. 3, 2009 or so the story goes. In
truth, theres no proof that Nakamoto actually exists at least not as a specific person.

In his online profile, he lists himself as a 37-year-old male living in Japan. However, no record
of him can be found prior to the creation of Bitcoin and the claim of Japanese residence has been
questioned because of his precise use of English and the lack of any software documentation in
Japanese, hinting at British origin.

Theres also no record of his involvement with the original Bitcoin software after mid-2010.
As such, its now believed the Bitcoin software was developed by a collaborative group of people,
and though extensive efforts by both The New Yorker magazine and Fast Company failed to
identify Nakamoto, they did come up with a list of potential suspects.

Regardless of his identity, or even his existence, Nakamoto will always be linked to Bitcoin
since the smallest electronic units of the currency now carry his name 1/100,000,000th of a
Bitcoin is called a satoshi.

Though theres no evidence Nakamoto, individually or collectively, was aware of Edisons

dream, his creation certainly fulfills most of Edisons objectives and more:

Edison wanted a commodity-backed currency and Bitcoin is backed by two commodities

energy and time. Electricity and increased computing power support the currency as
a constant number of new coins is steadily added to the Bitcoin pool (more on this later
as there will eventually be a maximum number of coins), much as gold miners expend
resources to add new bullion to circulation.

The commodity warehouses Edison proposed are data banks, servers, etc. The Bitcoin
network stores the entire transaction history inside a log called the blockchain, which
grows constantly as new records are added and never removed. This log is essentially cloud-
based as Nakamoto correctly assumed most users wouldnt have computers with the power
or memory to handle the entire Bitcoin database through their wallet software.

Because all Bitcoin transactions are one-on-one, person-to-person at a mutually agreed

price, the currency itself is inflation-proof.

Bitcoins are private, anonymous and totally secure. They cant be counterfeited, they can be
spent only by their owner, and they can never be spent more than once. Although theyre all
based on the same software code, every Bitcoin created has its own individual footprint
that can never be reproduced.

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Bitcoin prevents bankers and governments from corrupting the currency because it is
designed to allow people to buy, sell or make payments without centralized control or
official monitoring and tracking.
Bitcoin is not tied to any single country, nor linked to any corporation. Theres no President,
no Chairman, no CEO, not even any employees to handle the currency. Bitcoin is created
by the people who use it... for the people who use it.
As a result of these features, Bitcoin is quickly gaining worldwide acceptance, and the rate of
use is growing rapidly. Just consider:
Bitcoin transactions are now taking place in every country in the world everywhere
users can access power and computer networks or the Internet. Best estimates now put
the number of daily Bitcoin transactions taking place at 50 million to 70 million. There
are constantly shifting exchange rates that allow every major global currency to be easily
converted to Bitcoin.
Bitcoin is now traded like conventional currencies on major global exchanges.
Bitcoin is now valued higher than every other major world currency. Just as an example,
from 2009 through 2012, Bitcoin appreciated 135,800% against the U.S. dollar.
The total value of digital Bitcoins now surpasses that of 20 national currencies.

WILL BITCOIN CONTINUE TO GROW AND FLOURISH?

In spite of this impressive beginning, many skeptics still predict Bitcoin will turn out to be a
flash in the pan too complex for the average person to fully understand, operating with too
many limitations and up against narrow market acceptance, while facing potential legal attacks
from governments and their overzealous regulators.
Well address those concerns in more detail in just a few pages, but first consider just one thing:
Less than 40 years ago, skeptics offered the same arguments against the success of the
Internet. In 1990, everyone in the know predicted email would never catch on. Video phones
would remain a fantasy, consigned to forever stay on Dick Tracys cartoon wrist.
In fact, virtually every digital advance of the past half century or so including email was
initially met with disbelief and doubt. But they succeeded!
No one planned it. No government mandated it. Legislation didnt authorize it. But the Digital
Age arrived anyway a modern-day revolution, if you will because the free market wanted it
and the believers made it happen, largely through trial and error.
This is exactly what is occurring right now with Bitcoin.
Remember, the origin of Bitcoin coincides exactly with the devastating financial crisis of
2008, a time of great upheaval in our monetary system, and the perfect landscape from which a
decentralized currency, one fully unreliant on government interference, could take hold.
For years, Wall Street banks (the modern day version of Edisons reviled money brokers)
had been overleveraging themselves on complex, yet highly risky and dangerous derivatives.

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Corporations, insurance giants, hedge funds, even municipal governments were all in on the
action blindly making billions, tying themselves up in dicey ventures, collecting on money
schemes tied to mortgage-backed securities that ultimately turned out to be worthless.
By 2009, the whole thing collapsed.
First, the banking sector imploded, followed by the stock markets, and then the entire global
economy. In the United States alone, millions lost their jobs and life savings. Unemployment
soared. And the U.S. dollar, the worlds reserve currency, faced a crisis of confidence that
continues to this day.
Bitcoin rose directly from this morass.
As Satoshi Nakamoto admits himself in his brilliant essay (shown here), the motivation for
Bitcoins creation was politics, not money or fame.
He wrote:
The root problem with conventional currency is all the
trust thats required to make it work. The central bank must
be trusted not to debase the currency but the history of fiat
currencies is full of breaches of that trust. Banks must be
trusted to hold our money and transfer it electronically but
they lend it out in waves of credit bubbles with barely a
fraction in reserve.
Nakamotos words were prescient. White Paper from 2008

Not long after the publication of his paper, the U.S. central bank the Federal Reserve bailed
out Wall Street then turned up the printing presses full throttle, artificially pumping billions into
the economy.
What followed were ungodly amounts of money printing, quantitative easing, and 0% interest
rates as far as the eye can see.
To many folks, this was pure market manipulation the biggest breach of trust they had
witnessed in their lifetime.
Everyone started pointing fingers at their banks, their governments, and their politicians, who
continued to rack up obscene amounts of debt $17 trillion in the U.S. alone seriously weakening
the purchasing power of everyday Americans as the dollar became more worthless by the hour.
Meanwhile, all of this upheaval (including the ugly banking crisis in Cyprus in which the
government tried to steal money directly from its citizens bank accounts) suddenly put Bitcoin on
the world stage.
What was once valued at less than a penny in 2009 soon rose to a record high of $1,242 for a
single Bitcoin in 2013.
Yet while Bitcoin became a global rebellion against the Fed, against all Central Banks, and a
harsh dose of medicine to many overblown power structures, it now has entered a new phase.
Its a phase that seems certain to launch Bitcoin from the libertarian fringes into the mainstream.

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Young tech-savvy people are beginning to see Bitcoin as the inevitable upgrade to an
outmoded, outdated and wholly unreliable payment system based on cash, debit and credit
cards, all of which they consider severely flawed devices for purchasing items over the Internet
especially in regard to privacy, safety and security.

The venture capitalists, the wise and very wealthy men of Silicon Valley, whole-heartedly agree.

As we write this, the founders and financial backers of Google, Facebook, Skype and
Yahoo are pouring millions into Bitcoin. Western Union is beginning to access the technology
necessary to harness it. PayPal is seriously figuring out how to get involved. And in January
2014, Overstock.com, became the worlds biggest online retailer to accept the digital currency as
payment for its products. Is Amazon far behind? If that happens you can be sure it will set off a
chain reaction where many more giant retailers will follow. And Bitcoin would need to be built
into every web browser and cell phone on the planet.

As is already being proven with Bitcoin, those who recognize the potential and get in early
can make a fortune.

At the time we began working on this guide, a single Bitcoin has climbed from a little over $70
to over $1,200 dollars a new record. Thats quite a high-flying journey

In this report, were going to tell you everything you need to know in order to get started on
your own Bitcoin journey.

Youll learn...

hh The amazing technologies driving the virtual currency...

hh How the decentralized global network operates...
hh How exactly Bitcoin are created...
hh How they are used to purchase services and goods...
hh How theyre viewed as virtual gold, inflation proof, private and safe...
hh How some view them as a tax haven...
hh How to set up your own Bitcoin virtual wallet...
hh How to navigate the global exchanges...

And most importantly,

hh 3 unique ways to capitalize on the Bitcoin revolution...

But before we get into all of those things, let us first address a few important questions:

Is Bitcoin Truly Money?

The answer is undoubtedly yes. Bitcoins retain value because they are scarce, yet in high
demand. Furthermore, they are accepted as payment for the exchange of goods and services
meaning they are trusted by a growing base of users, merchants and businesses. The fact that
theyre virtual should not be a consideration. After all, when was the last time you actually paid
for a piece of furniture, a repair bill for your car, or even a tank of gas with bills and coins? Today,
even fiat money the kind backed (not too solidly it often seems) by government central banks
is most often moved around electronically, without ever manifesting itself in physical form.

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Bitcoin Has Risen By More Than 90,000% Since Its Inception. Is This A Bubble?
Bitcoin has seen a remarkably fast rise in its price since it began but that doesnt mean theres
a bubble. In fact, the price has risen in direct proportion with its popularity. The more widely-
known and accepted Bitcoin becomes, the higher the volume of people buying and trading it on
the exchanges, the more upside you tend to see to the price. Although the price has corrected
from its high marks, it has never actually crashed. Of course, the market is still in its infancy.
Therefore, while the fundamentals of Bitcoin as a currency are rock solid, the value could
continue to see some wild swings and volatility based on the same concepts that create pricing
movements in any market supply, demand, performance data, news reports, surprise catalysts,
investor emotions (such as fear and greed), and of course speculation. Remember, the world of
Bitcoin is incredibly young, and the market is far from settled. At this stage in the game, investors
should no doubt look at Bitcoin as a high-risk play and only invest what they can afford to lose.
But this is what makes Bitcoin such an intriguing and exciting opportunity.

What Role Does Government Play?

There is some risk that central governments might try to stop Bitcoin because they dont want
it competing with their fiat currencies. We experienced something like this recently in China.
However, Bitcoin is impossible to stamp out because it exists in a global peer-to-peer network.
There is no fixed target. And there is no way to defy the laws of mathematics upon which Bitcoin
is built. What is more likely is that government, realizing they are powerless to stop the rise
of Bitcoin, will attempt to regulate the exchanges and commerce sites affiliated with Bitcoin.
Recently, in fact, New York States top regulators held hearings on Bitcoin to determine the best
way to incorporate the virtual currency in their economy. They are clearly anticipating a move
by big business (and even Wall Street) towards universal acceptance of Bitcoin as a currency
and they want to be prepared. This could actually be a positive step as proper regulations will
ultimately eliminate bad actors from the system.
As we dig deeper into the belly of Bitcoin, it should be noted that understanding the intricacies
of how Bitcoin works is not required for anyone interested in obtaining them, enjoying them, or
investing in them. Even the most qualified people including some very smart economists find
the underlying code and concept of Bitcoin difficult to wrap their head around.
Having said that, its worth knowing the basics because the system is truly a marvel of modern
technology.

THE AMAZING TECHNOLOGY BEHIND BITCOIN

It all starts with a mathematical concept called public key cryptography. This is the framework
upon which the Bitcoin system is built and the reason why the digital currency is often referred to
as a crypto-currency.
Cryptography means hidden secret and throughout history it has been considered an art
form of sorts, used as a means to protect valuable information from spying adversaries. The NSA,
which has relied on cryptography for decades, even has its own cryptography museum outside of
their headquarters in Beltsville, Maryland.
Protecting information from adversaries was certainly on Satoshi Nakomotos mind when he
created Bitcoin.

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When writing the code, his primary focus was to build a system that would allow, in his words:
Two willing parties to transact directly with each other without the need for a
trusted third party. Transactions that are computationally impractical to reverse
would protect sellers from fraud... and routine escrow mechanisms could easily be
implemented to protect buyers.
To put that into laymen terms: Nakomoto wanted to create a secret code that would encrypt
each transaction and keep hackers and online criminals from stealing your financial information...
and your money.
Just as important, he wanted the currency to self-police itself; instinctively preventing
someone from spending the same money twice or any number of times, really.
Banks handle this crucial task when it comes to centralized fiat currencies but remember the
purpose of Bitcoin was to be completely decentralized no need for a trusted third party.
So, Nakamoto employed public key cryptology as a solution.
This cryptology technology is firmly based on complicated math formulas. Every account has a
Public Key and a Private Key, indicated by long strings of numbers and letters. Youll be assigned
these keys yourself when you create your Bitcoin wallet and it will look something like this:
62cArPjumnuStKLGeiXjtqbBv9WortfTzq
Your Private Key is kept hidden on your computer and gives you the ability to send money
anonymously. Your Public Key functions as the address you would give to others so they can
send Bitcoins to you.
Heres what makes this system so ingenious:
As a payment network, Bitcoin completely replaces the function of a bank and payment processor.
Furthermore, it is virtually impossible to duplicate or impersonate a private key even if
you were to employ the most powerful supercomputer in the world.
Lets say you perform a transaction you want to transfer Bitcoins to a merchant to buy a pair
of sunglasses.
When you click SEND from your Bitcoin wallet, a mathematical operation gets performed
within the software that automatically combines your private key and the sunglass merchants
public key with the Bitcoins you want to transfer. Yet, the transaction is not only sent among the
two parties involved it is also sent throughout the entire network, inspecting and verifying that
the transaction is unique along the way.
In other words, a history of every Bitcoin created... as well as the complete movement of
that Bitcoin from one place to another... will forever be stored in a public database (called a
Blockchain) and published across the entire network.
So, while buyers and sellers remain anonymous, each and every transaction is verified and
confirmed by the network. That means its virtually impossible to create fake Bitcoins or to spend
Bitcoins you dont own.
This is a system that has been working splendidly.

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As of today, there are, on average, about 70,000 Bitcoin transactions per day. And the
worlds leading Bitcoin processor has reported exactly zero cases of payment fraud and no
documented instance of double spending. Compare that to credit cards, where one out of every
167 transactions is fraudulent.

HOW THE DECENTRALIZED GLOBAL NETWORK OPERATES

Now, all of this may seem complicated and strange to folks who dont have a degree in cryptology.

But in reality, if you strip away the inner workings of the network and the software, youll see
that Bitcoin is really quite simple.

Using Bitcoin, and thus joining the network, takes no more effort than setting up a Bitcoin
wallet online.

Once youve done that then its simply a matter of storing the actual Bitcoin in your virtual
wallet just as you would keep dollars in your bank account. Only instead of dollars, youre now
using Bitcoin. The wallet sits on your computer and once you have it there, you can send and
receive Bitcoin from anywhere in the world. Its as fast and as easy as sending an email.

Yet what makes Bitcoin so conceptually radical (and so difficult for our minds to comprehend in
todays centralized business world) is that nobody actually owns the network.

In other words, Bitcoin is not run by a government or central bank. It is completely

decentralized and governed by the people themselves.

Think about how unprecedented this is.

There is no Bitcoin office. No CEO, no president or employees of Bitcoin. Its not tied to any
corporation or country. Theres no chairman, and theres definitely no banker. There are no central
computer servers either.

Instead, Bitcoins are created and distributed purely from one person to another. In fact, the
Bitcoin network itself, comprised of tens of thousands of Bitcoin owners, is simply called a Peer-
to-Peer Network, or P2P.

Its also referred to as an Open Source Network, which means the coding behind the system
is publicly available. That ensures Bitcoin will not fall victim to the capricious whims of a closed
political system that caters to a banking elite and imposes severe costs, limitations and regulations
on a free market.

In other words, the P2P process makes it impossible for a government entity like a central bank
to manipulate the value of Bitcoin by printing or circulating more money.

Of course, there are rules governing this network... rules built into the system itself. These rules
are embedded into the software and allow Bitcoins to be made in the first place.

But the rules arent arbitrary or based on theory, subject to change with the wind. They are based
entirely on stringent mathematics and relate specifically to how Bitcoins are ultimately created.

This is a process often referred to as Bitcoin mining. Lets take a closer look.

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HOW BITCOIN ARE CREATED

Unlike government currencies which are merely rolled off a printing press, new Bitcoins have
to be mined much the same way as gold or silver is mined. Only this mining is done in a
computer, not in a pile of rock.

Admittedly, this is a fairly difficult concept for most people with limited technological
knowledge to grasp but Ill try to explain it as simply as possible.

And remember: While its possible for anyone to actually mine Bitcoins its not at all a
necessary requirement to enjoy the benefits of Bitcoin.

Unlike mining for gold, where you (if youre lucky) can just swing a pickaxe into a rock and knock
out a precious nugget, the Bitcoin mining process is based on advanced math and complex equations.

New Bitcoins are created in a geometric sequence established by the network, which has a
timer that allows the creation and release of a limited number of new coins at one time.

New Bitcoins are awarded to miners (or, more accurately, their computer processors) that
provide the solution to a difficult proof-of-work problem.

Solving one block results in an award of a fixed number of Bitcoins. But because of the great
mathematical difficulty of solving a block, most miners operate as part of a pool.

When a miner in a pool solves a block, the allotment of new Bitcoins is distributed to all actively
mining members of the pool, with the amount based on how much processing power they contributed.

The amount of energy allocated into maintaining this network on a daily basis is astounding:
Enough to supply 31,000 American homes.

Were talking about a decentralized network of millions upon millions of computers, all being
run by ordinary citizens.

The incentive, as Satoshi Nakamotos original white paper described it, encourages nodes
to support the network, and provides a way to initially distribute coins into circulation, since no
central authority issues them.

While this mining process may seem relatively difficult especially since miners are necessary
to keep the network operating smoothly by providing new coins to fuel the transactions that keep
the Bitcoin economy running it is also essential to ensure the integrity of both the network and
the Bitcoins themselves.

Nakamoto compared the expenditure of electricity and computing power required to create new
Bitcoins to the expenditure of money and physical resources gold miners must make to put new
bullion into circulation.

And, just as golds scarcity contributes to its value, the creation of new Bitcoins is limited in
order to maintain the value of the digital currency.

To this end, new coins are slowly mined into existence by following a mutually agreed-upon set
of rules.

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A user mining Bitcoins must run a software program that searches tirelessly for a solution
to a very complex math problem, the difficulty of which is precisely known. The difficulty is
automatically adjusted on a regular basis so the number of blocks solved globally, by everyone,
remains constant an average of just six per hour.
When a solution is found, the users machine announces the new block to the network, which
then must verify it before it is added to the end of the blockchain and the Bitcoins awarded to
the miner.
At present, each new block awarded contains 25 Bitcoins. This amount, known as the block
reward, is an incentive for people to perform the extensive computation work required to
generate new blocks.
Every time 210,000 new Bitcoins are mined roughly every four years, the networks software
reduces the reward for finding a block by 50% meaning the reward will drop to 12.5 sometime
in late 2015 or early 2016.
The Bitcoin software program was specifically designed to make mining more difficult as
more users and computers get involved in the process. Just as there is only so much gold in the
world, there can only be so many Bitcoins.
Because the creation of new Bitcoins occurs in a geometric progression, roughly three-quarters
of all possible Bitcoins will be in circulation by 2017.
But, because the rate of creation steadily slows, the final Bitcoins will not be created until
2140, when the total will reach 21 million the maximum number of Bitcoins that will ever exist.
How, you may ask, can a global economy continue to function and untold daily transactions be
supported by a currency with just 21 million units especially since those dedicating their electric
and computing power to the system will no longer receive block rewards?
The answer is two-fold:
First, as the block reward decreases over the long term, miners will have to begin paying for
their hardware and electricity costs by collecting transaction fees.
Second, the maximum quantity of Bitcoins will be resolved by simple division and fractional
valuation.
Currently, Bitcoins are divisible down to eight decimal points i.e., 0.00000001 (or one
satoshi) and, if needed in the future, even further division is possible. That removes the practical
limitations to price adjustment. In other words, if values stay near current levels, one Bitcoin
might buy you a nice mens suit but, if values continue to rise at recent rates, a single Bitcoin
might one day buy you an entire Savile Row clothing store.
Of course, let me be clear: All of the information I just described is purely technical, the stuff
that goes on behind the scenes to make the Bitcoin network function.
But on the other side of the network is the fun stuff: Spending, trading and possibly making a
fortune from Bitcoins incredible rise.
So, lets turn our attention to all of that now.

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HOW ARE BITCOIN USED TO PURCHASE SERVICES AND GOODS

The first thing you should know is that Bitcoins are convenient, easy to use and becoming
more widely accepted every day. More than 700,000 American businesses are turning to it,
including Wal-Mart, CVS, Lowes and Nike. As I noted earlier, Overstock.com just began
accepting them.

In addition, 36 cities across 20 states allow you to pay for everything from water bills to
parking tickets with Bitcoin.

In fact, the first Bitcoin ATM was recently launched in Vancouver to

much hoopla. What kind of response did it receive? According to ATM maker
Robocoin, the machine logged over $100,000 worth of business with 348
transactions in its first eight days.

Another Bitcoin ATM was set to open in New York this year. Soon more Bitcoin
ATMS are expected to pop up in Berlin, Hong Kong and London.

Recently, The Washington Post conducted an investigation to determine whether

Bitcoin ATM
Bitcoins, as a digital currency, had begun rivaling the real thing i.e., fiat national currencies.
Their conclusion was, Yes. A wide range of facts support that conclusion.

For example, nearly every bank will now accept Bitcoins in direct deposit to the accounts
of their customers, and many are issuing debit cards denominated in Bitcoin. Google Chromes
newest web browser has a built-in extension to allow users to make Bitcoin payments. France has
officially recognized Bitcoin as a currency.

Part of the attraction for the consumer is the sheer ease of it all. To make a payment, all you
have to do is set up a wallet in your computer, laptop, tablet or smartphone.

Then you simply enter the recipients address, the payment amount and press send. Voila. Its
pretty simple.

Bitcoin users love the fact that their transactions remain secure, protected and anonymous,
preventing identity theft.

And merchants love Bitcoin for several reasons. First, credit card networks like VISA,
MasterCard or even PayPal, charge businesses a 2.5% to 3% processing fee. But with Bitcoin
most payments are processed for no fees at all.

Theres also no need for Payment Card Industry (PCI) compliance since Bitcoin transactions
do not contain customers sensitive or private information. Bitcoin software prevents against the
freezing of funds or chargebacks.

In addition, business is perpetual. Bitcoin is open 24/7. There are no bank holidays or imposed
bank limits. There are no borders, either. Payments can be processed anywhere in the world with
no restrictions.

Of course, all this begs the question: What can you buy with Bitcoin? The better question
would be what cant you buy.

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A growing list of Bitcoin-only virtual stores is making shopping with Bitcoin easy and fun. In
fact, a Bitcoin Yellow Pages (www.bitcoinyellowpages.com) just sprung up as well. You can use it
to find the nearest Bitcoin retailers in your location.
Here are some of our favorite Bitcoin shopping sites:
The Bitcoin Store: www.bitcoinstore.com
Spend Bitcoin: www.spendbitcoins.com/places
The Bitcoin Catalog: www.thebitcoincatalog.com/order
Of course, like anything on the Internet, you want to make sure you deal only with reputable,
well-established merchants.

HOW BITCOIN ARE VIEWED AS VIRTUAL GOLD...

INFLATION PROOF... PRIVATE AND SAFE
The premise and promise of Bitcoin appeals fondly to those who view gold as a legitimate
store of value.
(At the time of this writing, Bitcoin may, in fact, be the superior form, having risen 4,600%
relative to the U.S. dollar while gold has fallen 23%.)
Nevertheless, the similarities are striking.
Take gold for instance. There is only a limited amount of gold in the world, and with every
gram of gold that is mined, the gold that still remains becomes harder and harder to extract.
As a result of this limited supply, gold has maintained its value as an international medium of
exchange and store of value for over six thousand years.
Similarly, Bitcoin, as was mentioned before, has a monetary policy that was coded into the
system that reduces the rate of Bitcoin production over time.
Remember, a block is solved every ten minutes, but the number of Bitcoin in that block will
drop sharply, cutting in half about once every four years, or more precisely, every time 210,000
Bitcoins are mined.
And it is also written in the code that Bitcoin production must stop entirely at a maximum of
21 million, scheduled to take place around the year 2140.

The last bitcoin will be created c. 2140

2000 2025 2050 2075 2100 2125 2150

Thus, Bitcoin comes with a built-in inflation buster... just like gold with its limited supply.
This is, of course, in direct contrast to standard national fiat currencies, which governments
can print more of at any time they wish.

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If they print too much, the laws of supply and demand ensure that the value of the currency
starts dropping quickly. Because the only use for money is to exchange it for something else
later, people have an incentive to spend a currency rapidly decreasing in value as fast as they can,
leading to a hyperinflationary spiral.
In such a calamity, hundred dollar bills littering the ground or being used as firewood is not
an uncommon sight witness the Weimer Republic circa 1923 and Zimbabwe in 2007.
Of course, its exactly this fear of another Weimer
Republic that has made gold such a widely sought
out commodity over the last several years. The dollar
may become worthless, but gold will always retain
its value, investors tell us.
Now they are saying the same thing about
Bitcoin. With one added bonus:
Gold is not a particularly good payment system.
Its too bulky and cannot be shipped easily. And
large quantities of gold require storage and tight
physical security. Weimer Republic Inflation

But Bitcoins sit safely in your own private computer, and can be sent anywhere around the
world with just a push of a button.
They are also as safe as safe can get.
Remember, credit card fraud and identity theft are enormous problems facing every citizen
around the globe today.
More than 11 million cases of identity fraud are reported each year in the U.S. alone. And this
theft is costing Americans a fortune more than $21 billion in losses in 2013.
As I mentioned earlier, one out of every 167 credit card transactions turns out to be fraudulent.
Part of the problem is that our bank accounts and credit card accounts are tied directly to our
identity. And that identity can be easily stolen by sophisticated hackers.
Is Bitcoin the antidote to all of this?
It may be too early to tell for sure. But know this: While the Bitcoin network is completely
transparent, users are never forced to reveal their identity. They can remain anonymous if they
choose to do so.
And while exchanges and wallet sites can never be completely impervious to hacking, the
Bitcoin network itself, with its cryptographic framework, is several times safer than that used by
banks and credit card companies.
It also provides protection against all forms of theft, including confiscatory taxation by
government authorities.
And how about taxes themselves? Does Bitcoin offer a sanctuary? Right now, the answer to
that question is in flux.

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As Bitcoin becomes more mainstream, and as governments around the world begin to take
notice, new policies regarding taxes seems to be popping up all the time.
Lets dig in and explore some of the details.

CAN BITCOIN BE LOOKED UPON AS A TAX HAVEN?

Because Bitcoin is so new you need to understand how taxes work on it.
Keep in mind the tax policy on Bitcoin can change at any time. As this digital currency
becomes more mainstream, governments around the world are taking notice... and making
adjustments to their policies.
Make no mistake: Here in the U.S., and thanks to the growing popularity of Bitcoin among
both citizens and businesses, we are most likely close to seeing the IRS issue an official policy on
Bitcoin transactions.
However, at this time, the IRS does not have any official policy regarding Bitcoin.
Here are some basic guidelines from what we know now:
Lets say you strike it rich. You invest $1,000 and it turns into $1 million in Bitcoin.
In this scenario logic dictates you would have to follow the same tax rules as you do on
dividend stocks or bonds.
It is also clear that if you are a merchant providing services or selling goods, and you receive
income in Bitcoin, you are definitely responsible for paying taxes on that income.
The situation gets muddled after that, mostly because Bitcoin hasnt been officially classified
as a commodity or a currency, leaving certain transactions, like swapping them or trading them on
the exchanges, or buying products with them, up to interpretation. Certain transactions could be
considered under Barter Laws.
And the tax law becomes even more muddled due to the fact that virtually all Bitcoin
transactions are anonymous.
Of course, you should never attempt to evade the IRS.
When it comes to taxes, we highly recommend speaking to a professional, licensed accountant
to understand the full parameters of how Bitcoin will or wont affect your tax responsibilities.

A REVIEW OF BITCOINS ADVANTAGES

The most important single central fact about a free market is that no exchange takes
place unless both parties benefit. ~ Milton Friedman
That quote from noted economist Milton Friedman succinctly sums up Bitcoins most significant
advantage over fiat currencies an advantage that almost guarantees Bitcoins ultimate success.
A free market is inherently unstable and thats a good thing. It promotes change, progress,
growth and innovation none of which happens unless two parties benefit. Inventions dont

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become products unless consumers need them; sellers dont profit unless buyers also receive a
benefit. The list of potential win-win situations goes on and on.
Sadly, though, governments dont like win-win situations. They like situations they can control
which also let them control us and money is one of the best tools they have to achieve that end.
They can print more of it, thereby lowering its value; they can manipulate its distribution,
thereby feeding or starving the national economy and ultimately controlling everything from
employment to business creation.
That monetary control gives government enormous power. But Bitcoin can seriously challenge
that power, the first thing capable of doing so in many, many years perhaps even since the days
of national revolutions.
As the first true decentralized digital currency, Bitcoin isnt supplied by any government. Its
value isnt established by any government, nor can it be manipulated by any government. The
free market dictates its value, which changes solely based on supply and demand, not because of
Quantitative Easing or any other government chicanery.
And, if enough people begin using Bitcoin conducting everything from global trade to
convenience-store purchases of chewing gum with it government-issued fiat currencies
restricted to single countries could actually become obsolete.
Obviously, that wont happen overnight, or even in a decade or two. Then again, maybe it
could. After all, 40 years ago only a few military technicians, scientists and computer geeks used
the Internet; 20 years ago, no one believed email would ever catch on. Today, both are used almost
universally around the globe, even by otherwise technically illiterate people.
And neither the Internet nor email initially offered the clear advantages Bitcoin now offers its
users advantages that include:
Bitcoin is inflation-proof: The premise of Bitcoin is that only a finite number of Bitcoins
will be created, and at a steadily slowing rate. This is in direct contrast to standard national
fiat currencies, which governments can print more of at any time they wish. If the supply
of Bitcoins remains finite, this should theoretically eliminate inflation, one of the biggest
drawbacks of paper money. Bitcoins value can only go up relative to the prices of the
products and services it will buy.
Bitcoin is more secure than paper money: Cash transactions are relatively secure, unless
a robber walks into the store just as you pull out your wallet. However, with credit cards,
one out of every 167 transactions turns out to be fraudulent. And thats just for domestic
orders, according to Cybersources 2012 Online Fraud Report; for international orders
the rate is one out of every 50 transactions. BitPay, which accepts orders denominated in
Bitcoins and automatically converts them to whatever currency the selling vender prefers,
has experienced exactly zero cases of payment fraud.
Bitcoins are private: Bitcoins are linked by unique codes to their individual owners and
transactions can be easily tracked anywhere around the globe. However, the Bitcoin owners
themselves can remain completely anonymous if they wish. This fact alone has government
officials and regulators worried, with New York Senator Charles Schumer and West Virginia
Senator Joe Manchin recently telling National Public Radio (NPR) that Bitcoins are

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untraceable. The FBI confirmed this concern, stating in a report to Congress that, with
Bitcoins, theyd be unable to identify users or specifically link them to transaction records.
The privacy factor is particularly appealing to citizens of nations with repressive regimes such
as Iran, where theres been a huge rush to Bitcoins as the rials value has crumbled.
Bitcoins are convenient, easy-to-use and becoming more widely accepted every day: In
late 2012, The Washington Post conducted an investigation to determine whether Bitcoins,
as a digital currency, had begun rivaling the real thing i.e., fiat national currencies.
Their conclusion was, Yes. A wide range of facts support that conclusion. For example,
nearly every bank will now accept Bitcoins in direct deposit to the accounts of their
customers, and many are issuing debit cards denominated in Bitcoin. At last count, more
than 750,000 U.S. retail outlets and online sites including such giants as Wal-mart and
7-Eleven had begun accepting Bitcoins. Google Chromes newest web browser has a
built-in extension to allow users to make Bitcoin payments. Finally, France has officially
recognized Bitcoin as a currency.
Bitcoins can make you rich Despite some sharp volatility and several short-term pullbacks,
the value of a Bitcoin has risen steadily since the first 50 coins were mined in January 2009, by
some estimates, increasing more than 90,000,000%! As of November 2013, Bitcoin had risen
sharply in value relative to every major currency on earth with no signs of stopping.
And, in the rest of this guide Im going to show you how you, too, can become a Bitcoin client
and share in those profits.
Welcome to the future of money!

ITS TIME TO PROFIT FROM BITCOIN: HOW TO SET UP YOUR BITCOIN WALLET
According to a report in Business Insider, Bitcoin could someday
capture between 1% and 10% of the entire global currency
market.
That implies a price of between $100,000 and $1 million
per Bitcoin!
Already as of this writing, Bitcoin has touched $1,200. Yet
this is only the beginning. The next phase begins when Bitcoin is in
front of every person in the world with an Internet connection.
Big time Wall Street Investor Jim Breyer, one of the earliest investors in Facebook, recently
told The New York Times he sees Bitcoin holding the same pay-off potential as social networks
did last decade. Im confident you will see major worldwide retailers adopting systems built on
Bitcoin, Breyer said.
Soon, all you may need to do is click a button on your browser to convert your dollars into
Bitcoin. And then you can start purchasing anywhere you want.
Remember, as a virtual currency, anything you can do with money you can do with Bitcoin.
You can buy and sell goods. You can send them to friends or families overseas. You can make
donations. You can use them to purchase commodities like silver and gold. And, of course, you
can trade them against other currencies on the exchanges.

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And you can do all this without the government placing restrictions on your transactions.
The first step is setting up your Bitcoin wallet.
Your Bitcoin wallet serves as your virtual checking account that contains and safeguards
your Bitcoin and allows you to spend or trade them. It contains all the cryptographic keys we spoke
about earlier, the ones that identify you as the owner of your Bitcoins and allow you to authorize
payments or accept transfers of coins. It also helps you keep track of them.
Let me make one very important point here about the Bitcoin Industry, and specifically
about the service companies that provide you with the technology needed to get started buying and
selling Bitcoin.
All of these companies are just getting started themselves. Remember, this digital currency has
only been in existence since 2009. And it has only really become part of the mainstream since 2013!
So, many of the companies you may end up dealing with including those we recommend
here are Start Ups that do not have hundreds of employees or a billion dollars worth of
technology behind them like say an Amazon.com does.
Having said that, we have done our best to recommend companies we have used and tested
ourselves. But ultimately, its up to you to choose the wallet provider you like best. There are plenty
of Bitcoin wallets to choose from.
The original wallet (and still the most popular for the most technical users) is called Bitcoin-
Qt. You can download and install it at www.bitcoin.org.
Bitcoin-Qt resides on your hard drive. Its not web-based. Therefore, it offers the best
protection and privacy. VERY IMPORTANT: Be prepared for a long download time. It could
take you a day (or more!) to download Bitcoin QT. Thats because it is downloading the entire
blockchain from the first day of Bitcoins existence! But once installed, it will come fully equipped
with your wallet and the complete and most up-to-date Bitcoin transaction history. Just remember,
if you use Bitcoin QT, you should back up your wallet on a thumb drive, or external hard drive. If
your computer breaks down (or worse gets the blue screen of death) you may not ever recover your
Bitcoins unless you have them safely backed up.
While I whole-heartedly endorse Bitcoin-Qt (its the purists favorite), it may not be the best
starting place for beginners.
The two more user-friendly Bitcoin wallets I recommend are Blockchain (www.blockchain.
info) and Coinbase (www.coinbase.com). Youll find more about all three wallets Bitcoin-Qt,
Blockchain and Coinbase in my video tutorial, Setting Up Your Bitcoin Wallet.
A quick note here:
In earlier versions of this report, I made Coinbase my top recommendation. I am personally a
Coinbase user and have never experienced any trouble or problems with their site or service. I am
also impressed by how much venture capital money has been flowing into Coinbase by some of the
biggest names in Silicon Valley. I expect them to be a significant player in this arena.
However, Coinbase has recently made changes to their system which, in my opinion, have
made the experience of setting up a wallet more difficult than before.

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I have also received feedback from readers who were not entirely satisfied with their Coinbase
experience, including folks from Canada and other countries outside of the U.S.A. that have had
difficulty exchanging their currencies into Bitcoins.
Therefore, while I still recommend Coinbase, I am moving Blockchain to the head of the class.
So, below you will find aquick tutorial for using Blockchain:
Go to www.blockchain.info At the top of the homepage, click on the link that says WALLET.

Once here you can get started by clicking the START A NEW WALLET button on the far left.
(They also have a very nice feature that allows you to try a DEMO ACCOUNT)
To create your new wallet just follow the prompts asking for an email and password.

WARNING: Please make sure you write down your password and keep it in a safe location.
Forgotten passwords are unrecoverable and result in the loss of your Bitcoins.
As youll see, once you create your password, a pop-up will appear with a personalized
mnemonic. You should print that and keep it in a safe place as well. This will allow you to recover
your Bitcoins in case you forget your password or have trouble with their system.

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Thats all you have to do! Its pretty simple.

Another nice thing about Blockchain is they provide ways to back up your wallet and spend
your Bitcoins with their selected partners.
They also provide support. Just click on their ABOUT US page and youll see FAQs, a
SUPPORT DESK link and a support BLOG all designed to help you with questions.

Regarding Support:
Again, just to reiterate while these Bitcoin providers are extremely professional, they are
truly online companies that rarely offer person-to-person phone support.
However, dont let that get between you and mastering Bitcoin. Most of your support
questions can be handled online. Dont be bashful to participate in every Bitcoin blog session
you can find. In general, I have found that the Bitcoin community is very tight. When you post
a question on a blog, youll typically get a fast response from an experienced user happy to
help. Take a look at some of the Bitcoin forums (the most popular is on Reddit) and you will
understand exactly what Im talking about.

UNDERSTANDING THE BITCOIN EXCHANGES

Now that weve discussed the Bitcoin wallet, lets move on to the exchanges. This is where you
can begin trading Bitcoin for profit.
An exchange is simply a business that allows folks to exchange one currency for another
currency. It also allows you to trade those currencies. You can do all this electronically.
Now, to be frank, when I first came out with my video tutorial, the exchanges were a lot more
important than they are today. Thats because the technology surrounding Bitcoin is growing at a
bewildering pace. Many of the online wallets like Coinbase allow you to trade, buy and sell

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Bitcoin all from the same location. In other words, you can set up a wallet at Coinbase and buy
and sell Bitcoin directly from your wallet without ever having to go to an exchange.
So things are always changing.
Another big change has occurred since my video tutorials were produced. And that is
concerning the exchange called Mt. Gox.
Up until this year, Mt. Gox was the most established Bitcoin exchange, accounting for nearly
80% of the volume of Bitcoin transactions.
I've used Mt. Gox as a place to buy and sell Bitcoin many times myself and even
recommended them in my videos.
But recently they stopped withdrawals, citing potential security problems within the global
market.
At the time, I indicated that Mt. Gox was making a much larger issue out of a software coding
problem we've known about for at least three years.
It now appears that Mt. Gox made such a big deal about technical issues simply because of its
own difficulties.
As of right now, Mt. Gox has effectively closed its doors.
In other words, please ignore the Mt. Gox portion of the exchange video. I am working on
updated tutorials as we speak, and well make them available online as soon as they are finished.
But there are dozens of Bitcoin exchanges you can use. You can get a terrific look at all of
them on Bitcoin charts (www.bitcoincharts.com)
Start by clicking on the "Markets" link at the top.
As you can see, this gives you a list of virtually every exchange out there where you can
trade Bitcoin.
Some are in U.S. dollars... some in euros... Canadian dollars... Japanese yen. Each tells you
the current price for one Bitcoin. The price can change at any time and updates instantly on the
screen. When an exchange is colored green, it means the price is going up... red is going down...
and blue is neutral. If an exchange hasnt had a trade in a while, it fades to black.
If you click on the individual exchanges you can dig deeper and see how well the exchange has
fared over time. You can also build charts. The site even has a calculator to show you exactly how
much you have to pay to convert your dollars to Bitcoin.
Some currency traders like to play what is known as arbitrage. A currency arbitrager looks for
price discrepancies between exchanges. They may see that one U.S. exchange is trading for higher
or lower on one exchange over another. Then theyll buy it cheap... to sell it high or vice versa.
Currency arbitrage can be very risky and difficult. It is even more complicated with Bitcoin
due to the time required to execute a trade and receive the Bitcoins in your wallet, not to mention
the difficulties with moving dollars to and from some of the exchanges. Therefore, I wouldnt
recommend arbitrage for beginners.

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Instead, the best way to trade Bitcoins with other people is to sign up for an account at one of
the exchanges and trade them directly from there.
Its up to you which exchange you prefer. I normally use Camp BX. But its your choice. You
can also trade in the currency of your choice. Multiple currency markets allow users to purchase
and resell their Bitcoins in up to 16 different currencies.

THE BITCOIN POWER PLAYS

Bitcoin Power Play 1: Bitcoin Investment Funds
When a group of heavy hitting financial advisers gathered in New York for a discussion on the
best ways to make money on emerging markets, one top hedge fund manager gave an answer that
shocked the panel.
He said to invest in Bitcoin.
It was Michael Novogratz, the co-chief investment officer of macro funds at the $55 billion
Fortress Investment Group.
Novogratz was excited about how Bitcoin offered a cheaper way of transferring money in
countries with weak banking systems.
But clearly his endorsement indicated to the Wall Street community that Bitcoin was no longer
just a niche alternative currency for libertarians and computer geeks it was a moneymaking
opportunity to be reckoned with, and one about to hit the mainstream.
Since Novogratz came out in favor of Bitcoin, a steady stream of big-time investors have
followed suit. Not only speaking up about Bitcoin, but putting up some serious money.
For example, Barry Silbert, the CEO of SecondMarket, Inc. a firm that specializes in connecting
investors with unique opportunities, said hes seeing a bevy of U.S. investors, including wealthy
families, allocating more of their investments into Bitcoins in order to diversify portfolios.
Were even seeing the principals of Wall Street firms and funds investing their own funds into
Bitcoin, Silbert told Bloomberg News.
Silbert said hes working with Pensco Trust Co., Entrust Group Inc. and Equity Trust Co. to
offer investors the ability to buy Bitcoins for individual retirement accounts. SecondMarkets
Bitcoin Investment Trust has already attracted $15 million, more than the $10 million he projected
for 2013, Silbert told Bloomberg.
Heres the point...
The Bitcoin universe is expanding dramatically as we speak. Investment funds are opening up
everywhere, raising lots of eyebrows and plenty of money.
One of the biggest Bitcoin funds is run by a group called Exante LTD. Theyre a European
fund (based in Malta) which debuted the first-ever Bitcoin hedge fund in early 2013. They
recently created a U.S. feeder fund to allow U.S. investors to participate. They also opened up an
Automatic Trading Platform (ATP) for their Bitcoin Fund that allows investors to take long or
short Bitcoin positions.

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The problem with Exante is that, at this time, they are for high rollers only, requiring start up
fees in the millions.

A better fund for the everyday Bitcoin investor is a company called Havelock Investments
(www.havelockinvestments.com). When we first released this report, Havelock was a Canadian
outfit. But it was recently purchased by a Panamanian investment group. You can find the full
announcement on their website.

Ever since the Panamanian groups purchase, Havelock has grown significantly. They now offer
more than a dozen Bitcoin funds that share the wealth with investors of all financial backgrounds
and experience. With these funds, you must invest exclusively with Bitcoins. But what I like most
about these funds are the high-dividend payments. Not just monthly or quarterly, but weekly
payments to investors.

You can go on their website and explore all the funds available and determine which is best for you.

The fund I like best is called AM100. At the time of this writing (updated from our original
release) the fund is paying a nice 5.86% yield.

This fund is tied to the Asicminer Mining Company, a well-known market leader which creates
and sells various mining equipment. They also operate a mining pool which means they produce
Bitcoin on a daily basis. (More on Bitcoin mining pools in Power Play #2 to follow).

The bottom line: Proceeds from Asicminer pool and the sale of equipment are distributed to
shareholders as weekly dividends.

In fact, each AM100 share has the right to 95% of its respected dividends; 5% will be retained
for fees.

And heres the best part: The fund offers you an easy way to reinvest your dividends back into
the fund to maximize compounded interest opportunities. It works like a DRIP account except
with Bitcoins.

That means with the magic of compounding interest you could be looking at very sizeable
dividend payments from this fund over the next several years.

How much exactly? That depends, of course, on how much you decide to invest and how much
the price of Bitcoin increases over the next several years.

But I crunched some numbers, and the average weekly growth rate of Bitcoin has been just about
8% over the last three years. Now, granted, I expect to see a lot of volatility going forward, which is
completely expected with something as new and thinly spread on the markets as Bitcoin.

But lets be very conservative and say that Bitcoin will only see a 3% weekly growth rate
over the next three years. And lets assume the average weighted dividend payment for this
ASICMINER fund is approximately 15%.

Even with such lowball figures, and taking a weekly Bitcoin price growth rate of 3, and a
weekly dividend figure of 15%, you get a weekly dividend payment of about 0.2973%.

If you reinvest this with compound interest, over three years you could be looking at 100%...
200%... even 280% weekly dividend payments.

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Again, those are very conservative numbers based on the price of Bitcoin continuing to grow
just 3% weekly over the next 3 years.
Please see Video #2 for more information regarding this fund.

Bitcoin Power Play 2: Bitcoin Mining Pools

Now, let me turn to Bitcoin Power Play #2...
A Bitcoin Mining Pool is nothing more than a decentralized global network of miners that
pool their computing power together to find Bitcoin blocks.
In other words, when you become a member of a pool, the whole group mines for Bitcoin, then
shares the benefits based on the rules of the pool you enter.
What do you offer in exchange?
Well, some pools require upfront fees. But mostly when you agree to join a pool, you are agreeing
to lend computing power and energy to the other members in exchange for a piece of the pie.
In other words, once a Bitcoin block is found, the actual Bitcoin is broken down into fractional
shares then distributed among all the miners in the pool. How much computing power and energy
you devote typically determines your payment.
Now, not all pools pay the same rate.
In fact, the Bitcoin pool community has come up with several payment systems that each pool
must reveal to its members... like PPS which means Pay Per Share or SMPPS which stands for
Shared Maximum Pay Per Share.
You can find a terrific introduction to mining pools, with a complete breakdown of payment
codes and options at Bitcoin Wiki.
Just go to this address: https://en.bitcoin.it/wiki/Comparison_of_mining_pools.
As youll see, there are quite a few pools to choose from. Again, generally speaking, you get
paid based on the amount of energy and computing power you contribute to the pool.
Remember it takes incredible amounts of computing energy just to get a single Bitcoin block of
25 Bitcoin.
As I mentioned previously, the amount of energy being used every day to mine Bitcoin could
power 31,000 American homes! So, a pool is simply asking its members to allocate a portion of
their computing power to help solve as many Bitcoin blocks as possible.
And you get paid for doing it.
In fact, the more time your computer spends mining, the more Bitcoins you get. I compare it
to something that has become popular these days where I live in the San Francisco Bay area of
California: buying solar panels for your home, installing them on your roof, and collecting energy
all day while youre going about your business.
A lot of folks I know take that stored energy and sell it back to an energy company for some
very significant profits.

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Well, when you join a Bitcoin pool as long as the pool is successful at finding Bitcoin you
can make a small fortune and do so while youre out shopping, playing with the kids, on vacation
with your family, watching TV, or really doing anything else youd like.
Your computer is doing all the work for you.
And what I also really like about pools is that it does NOT compromise your computer. Your
security and privacy are always a priority.
To find the pool that suits you best, I suggest you explore the site I just mentioned at Bitcoin
Wiki.
This is a great Bitcoin reference site all around, so I recommend you spend some time here
exploring in general.
For Bitcoin pools specifically, they have a terrific comparison page. Which pool you choose is
ultimately up to you. But I recommend you begin with the top mining pools to get a feel for how
they operate and to learn the ropes, so to speak.
Theres a great resource available to help you find the biggest Bitcoin Pools at any given time.
Its a page on Blockchain (www.blockchain.com). If you navigate to the "Other Bitcoin Links"
section on the bottom right of the Home Page, then click on the link that says Mining Pool Stats,
youll see what Im talking about.
As you can see from the pie chart on that page, the four
biggest mining pools as of this writing are:
BTC Guild: www.btcguild.com
GHASH.IO: www.ghash.io
ELIGIUS: www.eligius.st/~gateway
And BITCOIN CZ: http://mining.bitcoin.cz
Remember, the Bitcoin Mining Pool world is experiencing
incredible growth and the top players are constantly changing.
New mining pools pop up all the time. Blockchains Mining Pool Pie Chart
Thats why for beginners, I would recommend sticking with the oldest and most
reputable pools. And the two I like best are BTC GUILD (www.btcguild.com) and BITCOIN
CZ (aka Slushs Pool (http://mining.bitcoin.cz).
Go to their websites and explore each before deciding which is best for you. Youll find both
are incredibly easy to use and both provide support. You can also learn more about them in my
Video #3, Bitcoin Power Plays.
Now, heres the fact about making money with Bitcoin through these pools: While the statistics
can vary from day to day, Bitcoin mining is a very profitable business. Miners have been making
an absolute fortune.
In fact, right now theres a gold rush underway for purchasing Bitcoin mining hardware, such
as computers and super powerful chips.
The problem for the solo miner is the sheer cost involved in purchasing these items: They can
often run up to $20,000.

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 CASHING IN ON BITCOINS UNPRECEDENTED WINDFALLS

When factoring mining costs, you also have to consider the price of computing power and
electricity.

I recently did some research and learned that the average electricity cost to all the miners in the
U.S. in a single day came to about $147,000. That assumed an average energy price of 15 cents
per kilowatt-hour nationwide.

But heres the thing... Miners can make an absolute fortune.

Based on the current value of Bitcoin that particular day, which was around $114, the value of
the Bitcoin was around $681,000. Thats a cool 463% gain!

But the great thing about being part of a pool is that you share the costs along with the rewards.

Right now that network is growing at a bewildering pace. Thats means as Bitcoin hits its
critical mass, now is the time to join this network so you can realize the biggest gains before the
whole world gets on board.

Bitcoin Power Play 3: Loading Up With Bitcoin

A few years ago, anyone could have become a full-time Bitcoin miner and made a ton of
money doing it. And it wouldnt have cost you much to get started, either.

You could have plugged a powerful graphic card into your regular PC, created just enough
energy to solve the Bitcoin mathematical problem, and be rewarded with a block of Bitcoin. It
was all so simple.

But everything has rapidly changed.

Today, were smack in the middle of a Bitcoin technology arms race. Thousands of people
around the globe are becoming miners and racing to be the first to find the next Bitcoin.

At the same time, hardware manufacturers are scrambling to create more powerful chips and
machines capable of mining Bitcoins even faster.

In fact, the demand for Bitcoin mining equipment has reached unprecedented levels. Some
of the most popular Bitcoin mining equipment companies including Butterfly Labs (www.
butterflylabs.com), KnCMiner (www.kncminer.com) and CoinTerra (www.cointerra.com) are
racking up record sales.

Demand has heated up so much KnCMiner posted an announcement on their website saying
theyve completely sold out of equipment. And CoinTerra says theyve already pre-sold more than
$5 million worth of hardware.

So, if you want to become a Bitcoin miner, you have your work cut out for you. Youll be up
against a lot of competition, too.

But heres the thing...

I believe simply holding Bitcoins as an asset and trading them on the exchanges will provide
huge returns for you, maybe bigger than anything else.

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 EDISONS REVENGE

Im talking about a straight up currency play. One that can turn:

hh Every $10 you invest into $437.
hh Every $100 into $4,367.
hh And every $1,000 into $43,670.
Before I get into the details, there are two big things you need to understand right now...
First, as I told you earlier, some of the biggest Silicon Valley venture capitalists are pouring
millions into Bitcoin. But the fact is YOU dont need to spend millions to get into Bitcoin.
Its just the opposite. Bitcoin is that venture capital opportunity that CREATES millionaires. It
allows everyday folks to become venture capitalists.
What Im saying is, you shouldnt bet the farm on Bitcoin... because you dont need to. After
all, one single dollar invested in Bitcoin in 2009 became worth $44,700 in 2013.
True, it wasnt a straight line up. Because Bitcoin is so young, it is plenty volatile. For
example, in June of 2011 Bitcoin began to crash in value.
Everyone thought it was the end.

But then it surged, and you hear these numbers, and its almost unimaginable... 22,275%.

So that means $1,000 invested in Bitcoin after this plunge, transformed into over $223,752.

Now, if you just got started in Bitcoin in 2012...

That same $1,000, turned into over $115,394...

And if you waited until 2013, once again, that same $1,000 couldve become over $33,963.

Yes, this is a volatile market, but the fact is people are becoming rich on all this volatility.

The second thing you need to understand is how big this thing can really get. This is truly like
investing in the Internet back in the early 1990s.

Remember, back then, nobody was using email... Google didnt exist... there was no such thing
as Facebook, eBay, Yahoo... or dozens of other Internet companies we just couldnt imagine being
without today.

Many folks were smart enough to recognize that the Internet would change the universe and
they made a fortune. I believe Bitcoin now provides a very similar opportunity.

Im not saying it will replace paper money tomorrow. But then again, a few years ago no one
ever thought theyd see the end of sending paper letters or reading paper books.

Let me give you some perspective...

In total, from its inception in 2009 through 2012, Bitcoin returned an incredible gain of
135,800%!

And then look at what happened in November 2013.

The price skyrocketed to a little over $900.

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 CASHING IN ON BITCOINS UNPRECEDENTED WINDFALLS

Think of that...

It went from 1 cent in 2009 to $900 in 2013, a whopping 90,000% gain.

Thats why, as I mentioned earlier, Business Insider recently predicted that:

Bitcoin could someday capture between 1 and 10 percent of the entire global currency
market, which implies a price between $100,000 and $1,000,000.

So, look...

We have public $100,000 and $1,000,000 Bitcoin predictions. Predictions that are realistic when
you consider Bitcoin hasnt even remotely come close to hitting the masses... yet the price has
neared $1,000 per coin.

So, lets take a lowball approach and say the price hits $5,000 a Bitcoin in the next few years.

That would mean if you purchased even a small number of Bitcoin today, you would make a
fortune once it hits the mainstream... once Bitcoin ATMs are set up in cities around the U.S.... and
once folks can purchase them simply by clicking a button on their web browser. Thats why this
straight-up currency play is my number one target for you right now.

There is simply no other investment opportunity on the planet that offers this kind of potential.
Of course, Ill be keeping you in the loop about Bitcoin... its dramatic push into the
mainstream... and all the biggest tech opportunities every month in my Nova-X Report. You can
follow along at www.moneymappress.com. Just click on the Nova-X link and enter your Username
and Password.
Hope to see you there,

Michael Robinson

EDITORS NOTE: Dont forget: You can get more details on everything Bitcoin on the three Bitcoin
Virtual Roadmap DVDs located in your Bitcoin Virtual Portal www.bitcoinvirtualportal.com.
And remember: Bitcoin is an extremely fluid currency and things change all the time. So, for future
updates, please refer back to the online version of this report.

29
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