Bitcoin market cap rose from $55 million on the

first of January 2013 to $143 million by the first

of February 2013. By March the market cap

surpassed $403 million and by mid March

bitcoins surpassed $500 million.

A few days later Laiki Bank announced it would

freeze the deposits of all account holders in

Cyprus as a way to secure assets to maintain

liquidity for the bank. Within hours every

Parliament and Congress of every major

economic power in the world said that nothing

stood in the way of other banks doing this

throughout the world, though most reassured

their people this would not be needed for them.

Banks followed suit saying they were not like

Cyprus yet reiterated that they did have the

r ight to seize deposits under certain

circumstances. No legal consultation was

made of the world!s legal establishment

throughout all this. JP Morgan had a glitch that

day as well zeroing out the balances of all its

depositors. The glitch was fixed by mid

afternoon and that became the focus of most

news reports in New York and Washington.

By the 20th of March the market cap for bitcoin

surpassed $1 billion. During the first week of

April 2013 New York!s Federal District Court

ruled that banks could not be prosecuted under

relevant laws for LIBOR rate rigging and other

wrong-doing. Top cop, Attorney General Eric

Holder re-iterated that due to the systemically

important nature of modern banks it is

impossible to prosecute them for significant

breaches of the law, including bid rigging,

money laundering or outright theft, since doing

so would have severe societal costs.

Today, on April 10, 2013 the value of all

bitcoins surpasses $2.8 billion.

As the rule of law crumbles, many people are

seeking ways to preserve their property by

removing it from the care of trusted third

parties. Modern electronic commerce relies

upon trusted third parties to take place. Thus a

need exists for a transaction system that

operates independently of trusted third parties.

The bitcoin system of exchange relies on

cryptology to remove the need for trusted third

parties to conduct business electronically.

Thus, bitcoin is an ideal alternative to

traditional legacy systems of finance, despite

the difficulties faced in making bitcoin easy to

use and adapting its unique features to meet

the needs of the electronic marketplace.

copyright (c) 2013 William H. Mook! ! ! ! ! ! 1

LIB

OR

CA

SE

CY

PR

US

2.25% per day

4.50% per day

I am concerned that the size of some of these

institutions becomes so large that it does

become difficult for us to prosecute them when

we are hit with indications that if we do

prosecute — if we do bring a criminal charge

— it will have a negative impact on the

national economy, perhaps even the world

economy. I think that is a function of the fact

that some of these institutions have become too

large.

6.75% per day

BITCOIN HISTORY 2013

Collapse of TrustEric Holder

U.S. Attorney General

BITCOIN VALUE

In cryptography we trust

Bitcoin values are growing rapidly and that

growth is accelerating. It is important to realize

that despite this rapid and accelerating growth,

most people (around 72%) are buying bitcoins

to store value, not realize trading profits. This

value is likely to rise since the number of

bitcoins is limited whilst the number of dollars

in circulation is constantly increasing.

Bitcoin numbers are limited today to 11.08

million and are limited for all time to less than

21.00 million not by convention, but by the

nature of numbers themselves.

Bitcoins are freely traded on a 87 exchanges at

present which determines their value day to

day minute by minute. Bitcoins offer secure,

reliable, fast and private transfer of value

between parties using a peer to peer

communication of encrypted digital money.

They offer intrinsic digital value.

How can digital bitcoins have intrinsic value?

Just as precious metals give coins an intrinsic

values so too do precious numbers give

bitcoins intrinsic value.

Just as precious metals are mined from a sea

of rock and dirt, so too are precious numbers

mined from a sea of lesser numbers.

Using double SHA 256 encryption we know

that there are 2.1 quadrillion numbers that are

possible to use as the base of a blockchain

that is used to build an infinite series of

transaction sequences. Today through the

effort of hundreds of thousands of miners, we

know 1.1 quadrillion of these numbers. Over

time we will know 2.1 quadrillion of these

numbers.

The numbers possessing a unit of value called

the Satoshi is the smallest unit of a bitcoin. It

takes 100 million Satoshis to make a group

that forms a bitcoin. This allows nearly infinite

divisibility.

These numbers are traded among users

securely without any possibility of counterfeit.

With these numbers we create transactions

that share all the features we associate with

gold and silver in the real world. We have in

essence the digital equivalent of gold. We

have precious numbers.

WHY VCs LOVE BTC

Surpassing $1B per month!

VC interest is never ideological, its always

mercenary. Bitcoin has the opportunity to

disrupt multi-trillion dollar markets and in doing

so create truly astronomical markets. There

are four key steps in realizing these

opportunities.

copyright (c) 2013 William H. Mook! ! ! ! ! ! 2

BITCOIN WALLET

A place to put your stuff

Just as you need a web browser to surf the

internet, you need an electronic wallet to trade

bitcoins. Wallets are free, but the technology is

difficult to use and harder to understand.

Comparing the situation with bitcoin wallets to

the development of web browsers, if Satoshi

Nakamoto is bitcoin!s Tim Berners Lee (creator

of the hyper text transfer protocol (http:)), we

have yet to see the emergence of Mark

Andreesen. Once we do, we have the basis of

a multi-trillion dollar business.

Two factors are of paramount importance, (1)

Ease of Use and (2) Security. Instawallet was

a failed effort at a client wallet that lost clients

money and has yet to recover it at the time of

this writing. Stand alone software downloaded

from MIT, compiled and synchronized, not only

takes 18 hours or more, but also is extremely

complex. The only real solution? Hardware!

EXCHANGE

Show me the money!

Bitcoin has a lot to recommend it as the perfect

digital currency. However, it is not legal tender

in any country. As a result, there is a demand

for exchanging between Bitcoin and fiat

currency.

Consumer level exchanges charge between 50

and 100 basis points for each trade. Large

trades pay 10 basis points. Assuming 35 basis

points as an average and $5 billion in trades

this year current revenues are $17.5 million per

year. Volumes are expected to rise 100 fold

this year increasing the value of this revenue

stream to $2 billion per year. If this seems

surprisingly large consider that volumes have

increased 50 fold already this year.

PAYMENTS

The Buck Stops Here!

The key dr iver of both Bi tcoin pr ice

appreciation and exchange volume has to be

payments volume. People using bitcoins to

pay merchants for transactions provides a real

economic driver for both price and exchange

volume to rise simultaneously.

How do we get there? There are two

additional drivers prior to reaching critical

mass; (1) bitcoins perceived as a store of value

and (2) bitcoin pricing driven by speculation.

These have provided the dramatic rises of

recent months and will drive us to the point of

merchant acceptance.

copyright (c) 2013 William H. Mook! ! ! ! ! ! 3

PROVEN EXPERIENCE

Working with world class talent!

Computer based payment systems were

invented by William Mook in the 1980s and the

first patent for a point of sale computer was

issued to William in 1990. William!s leadership

continues to this day and he is a sought after

speaker on the subject of payment automation.

Increasingly intrusive regulatory environment,

the result of regulatory capture by "too big to

fail! institutions have created a situation where

faith and trust in these institutions and even the

law have begun to falter across the Eurozone,

North America and parts of Asia. At risk is over

$150 trillion of deposits held by individuals who

have between $100,000 and $5,000,000 in

deposits. These individuals can benefit greatly

by transferring a portion of their wealth into

bitcoins. An innovative transfer program has

been developed in the wake of Cyprus that

transfers funds even when threatened by

adverse bank action.

copyright (c) 2013 William H. Mook! ! ! ! ! ! 4

WHERE THE MONEY IS

Offering security and privacy