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Digital BTC - Initiation Report September 2014

13 Videos - Sep 2014


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Summary - Initiation Report September 2014

  • Vertically integrated Bitcoin Company.
  • Review of Company operations (Bitcoin mining, liquidity provision and consumer applications)
  • Explanation of the emerging Bitcoin sector (definition, evolution and future).
  • Interviews with management outlining the Company’s performance and strategy.
  • TSI Analysis – Checklist and Valuation Analysis.

TSI Analysis - Valuation Analysis

  • Financial Analysis of digitalBTC to determine an intrinsic value.
  • Discuss the key reason for the difference in our valuation and the current share price.
  • Explain reasons for the assumptions used in determining our valuation, including:
    • Bitcoin mining economic drivers such as capital costs, operating costs, hashing power, network difficulty and Bitcoin price; and
    •  Consumer wallet application and growth assumptions.

TSI Analysis - The Sophisticated Checklist

  • TSI analyses digitalBTC to see if they meet the requirements we believe are essential before considering an investment.
  • The Sophisticated Checklist includes:
    • Current and future operational performance;
    • Growth options;
    • Current and future financial position;
    • Management; and
    • Upside potential in the share price.

Operations - Company Strategy

  • digitalBTC is a vertically integrated digital currency company, operating in:
    • Bitcoin mining (transaction processing);
    • liquidity provision; and
    • development of consumer focused software and applications.

Operations - Transaction Processing

  • Payment processing systems have revolutionised how we shop for things – however this has come at a cost in the form of transaction fees charged by intermediaries.
  • The Bitcoin system operates without intermediaries so it has less friction costs, which results in lower transaction fees.  The system is self-sustaining, open to all yet secure and decentralised.
  • DigitalBTC operates as part of the decentralised network which validates Bitcoin transactions globally and receives Bitcoin as a reward. This process is known as bitcoin mining.

Operations - Liquidity Provision

  • digitalBTC is able to both promote the adoption of Bitcoin and generate an income by using its long position to supply liquidity and undertake arbitrage opportunities.
  • By providing liquidity to Bitcoin ATM operators who will often have a daily imbalance between Bitcoin debits and credits and will buy Bitcoins.
  • digitalBTC is a preferred supplier as it operates under a corporate governance structure, is audited and provides full financial disclosure.
  • As a miner it is in the position of being able to earn Bitcoin and is not required to go into the market to buy them  – thereby giving customers confidence in digitalBTC’s ability to deliver Bitcoin.

Technology, Product & Market - What is Bitcoin?

  • Bitcoin is the first and largest of the new technology of digital currencies.
  • The idea was to create a currency which was independent of any central authority and was electronically transferable with very low transaction fees.
  • As money has evolved, so too have the methods and modes for exchanging it, driven by technological innovation (eg: credit card, internet banking, PayPal).
  • The supply of Bitcoins is capped and the rate of supply diminishes predictably over time, Bitcoins are inherently deflationary making them the ideal currency for the present and future.

Technology, Product & Market - Evolution of Bitcoin

  • New applications and services are being developed to reduce the level of volatility and make Bitcoin easier to use and trust.
  • Established consumer brands and merchants are beginning to adopt Bitcoin, with Dell Computers being the most recent and well known.
  • Approximately 63,000 business now accept Bitcoin, and this is forecast to grow to 100,000 by Dec 2014.
  • Wallet providers store bitcoins for users.  There were 5.3m wallets at the end of June 2014, and these are forecast to grow to 8m by Dec 2014.

Technology, Product & Market - The future of Bitcoin

  • Government agencies are worried about the implications of Bitcoin, as its pseudo anonymity creates potential uses for Bitcoin in money laundering, tax evasion or other illicit activities.
  • Bitcoin miners will continue to search for hashing capacity with the lowest power requirements.
  • The next level of technological innovation to drive Bitcoin will be in the application of consumer driven technology.

Management - Ask the Question - Chairman - Zhenya Tsvetnenko

Interviews with digitalBTC’s senior management to ask them about the operational and financial performance of the Company as well as the future direction for digitalBTC and the Bitcoin industry.

Management - Ask the Question - CEO - Alex Karis

Interviews with digitalBTC’s senior management to ask them about the operational and financial performance of the Company as well as the future direction for digitalBTC and the Bitcoin industry.

Management - Ask the Question - CFO - Mark Laybourn

Interviews with digitalBTC’s senior management to ask them about the operational and financial performance of the Company as well as the future direction for digitalBTC and the Bitcoin industry.

Management - - William Brindise - CIO

Management - The Sophisticated Conversation - Chairman - Zhenya Tsvetnenko

Interviews with digitalBTC’s senior management to discuss their relevant work experience and their interests and passions away from the office.

Management - The Sophisticated Conversation - CEO - Alex Karis

Interviews with digitalBTC’s senior management to discuss their relevant work experience and their interests and passions away from the office.

Management - The Sophisticated Conversation - CFO - Mark Laybourn

Interviews with digitalBTC’s senior management to discuss their relevant work experience and their interests and passions away from the office.

Management - - CIO - William Brindise

All Videos for Digital BTC - Initiation Report September 2014

Summary

Initiation Report September 2014

  • Vertically integrated Bitcoin Company.
  • Review of Company operations (Bitcoin mining, liquidity provision and consumer applications)
  • Explanation of the emerging Bitcoin sector (definition, evolution and future).
  • Interviews with management outlining the Company’s performance and strategy.
  • TSI Analysis – Checklist and Valuation Analysis.

TSI Analysis

Valuation Analysis

  • Financial Analysis of digitalBTC to determine an intrinsic value.
  • Discuss the key reason for the difference in our valuation and the current share price.
  • Explain reasons for the assumptions used in determining our valuation, including:
    • Bitcoin mining economic drivers such as capital costs, operating costs, hashing power, network difficulty and Bitcoin price; and
    •  Consumer wallet application and growth assumptions.

The Sophisticated Checklist

  • TSI analyses digitalBTC to see if they meet the requirements we believe are essential before considering an investment.
  • The Sophisticated Checklist includes:
    • Current and future operational performance;
    • Growth options;
    • Current and future financial position;
    • Management; and
    • Upside potential in the share price.

Operations

Company Strategy

  • digitalBTC is a vertically integrated digital currency company, operating in:
    • Bitcoin mining (transaction processing);
    • liquidity provision; and
    • development of consumer focused software and applications.

Transaction Processing

  • Payment processing systems have revolutionised how we shop for things – however this has come at a cost in the form of transaction fees charged by intermediaries.
  • The Bitcoin system operates without intermediaries so it has less friction costs, which results in lower transaction fees.  The system is self-sustaining, open to all yet secure and decentralised.
  • DigitalBTC operates as part of the decentralised network which validates Bitcoin transactions globally and receives Bitcoin as a reward. This process is known as bitcoin mining.

Liquidity Provision

  • digitalBTC is able to both promote the adoption of Bitcoin and generate an income by using its long position to supply liquidity and undertake arbitrage opportunities.
  • By providing liquidity to Bitcoin ATM operators who will often have a daily imbalance between Bitcoin debits and credits and will buy Bitcoins.
  • digitalBTC is a preferred supplier as it operates under a corporate governance structure, is audited and provides full financial disclosure.
  • As a miner it is in the position of being able to earn Bitcoin and is not required to go into the market to buy them  – thereby giving customers confidence in digitalBTC’s ability to deliver Bitcoin.

Technology, Product & Market

What is Bitcoin?

  • Bitcoin is the first and largest of the new technology of digital currencies.
  • The idea was to create a currency which was independent of any central authority and was electronically transferable with very low transaction fees.
  • As money has evolved, so too have the methods and modes for exchanging it, driven by technological innovation (eg: credit card, internet banking, PayPal).
  • The supply of Bitcoins is capped and the rate of supply diminishes predictably over time, Bitcoins are inherently deflationary making them the ideal currency for the present and future.

Evolution of Bitcoin

  • New applications and services are being developed to reduce the level of volatility and make Bitcoin easier to use and trust.
  • Established consumer brands and merchants are beginning to adopt Bitcoin, with Dell Computers being the most recent and well known.
  • Approximately 63,000 business now accept Bitcoin, and this is forecast to grow to 100,000 by Dec 2014.
  • Wallet providers store bitcoins for users.  There were 5.3m wallets at the end of June 2014, and these are forecast to grow to 8m by Dec 2014.

The future of Bitcoin

  • Government agencies are worried about the implications of Bitcoin, as its pseudo anonymity creates potential uses for Bitcoin in money laundering, tax evasion or other illicit activities.
  • Bitcoin miners will continue to search for hashing capacity with the lowest power requirements.
  • The next level of technological innovation to drive Bitcoin will be in the application of consumer driven technology.

Management

Ask the Question

Interviews with digitalBTC’s senior management to ask them about the operational and financial performance of the Company as well as the future direction for digitalBTC and the Bitcoin industry.

The Sophisticated Conversation

Interviews with digitalBTC’s senior management to discuss their relevant work experience and their interests and passions away from the office.

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