your customisable toolkit (ms word)

[INSERT TITLE HERE]

Prepared for

[INSERT TARGET MERCHANT’S NAME HERE]

Prepared by [Your Name or Company Name][Insert relevant postnomials and/or your business number here]

[Insert Date Here]

[INSERT TARGET MERCHANT’S LOGO HERE]

Executive Summary

[Tailor this introductory paragraph specifically to your target merchant. Some good points to

mention are:

Merchant’s revenue and profit margin (if you can easily find this data)

How fee savings can greatly amplify profit margin (e.g. If a merchant’s profit margin is 5%,

adding a saving of 1% of fees to this figure increase profit margin by 1/5, or 20%!)]

In addition to reducing costs, accepting Bitcoin as a method of payment opens the door to new

revenue streams and allows your customers to pay you online and in person without needing to have

a credit card or local currency, which expose you and your customers to high international

transaction and foreign exchange fees. You can now capture this large market segment of people

who can’t get access to credit cards, or who don’t want to use them online. Furthermore, as part of

this service offering, [insert merchant name here] will receive free publicity in local and international

Bitcoin publications, which have readership in the hundreds of thousands of people on a daily basis.

Best of all, there are zero up-front costs, monthly fees, equipment fees, or account closure fees. The

most [INSERT MERCHANT NAME HERE] will ever pay is a flat 1% fee for processing transactions. You

don’t need to know anything about Bitcoin, nor hold on to any – the payment processor will take

care of everything for you. Your money, in your local currency, is in the bank the next day.

I look forward to forming a healthy and prosperous long-term business relationship with [INSERT

MERCHANT NAME HERE], and I look forward to assisting you implement Bitcoin as an additional

method of payment for your business.

Sincerely,

[Your name][Relevant postnomials]

E: [your e-mail address]T: [your contact number]

[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014

Table of ContentsIntroduction......................................................................................................................................................1

Free Service Offering....................................................................................................................................1

About Me......................................................................................................................................................1

What is Bitcoin?................................................................................................................................................2A Brief History..............................................................................................................................................2

Bitcoin is a Payment System.........................................................................................................................3

Bitcoin is Digital Gold....................................................................................................................................3

Bitcoin is Digital Cash....................................................................................................................................3

Bitcoin vs. Gold vs. Cash...............................................................................................................................4

How and where can I accept Bitcoin?...............................................................................................................5At Point of Sale.............................................................................................................................................5

Online...........................................................................................................................................................5

Why do Merchants Love Bitcoin?.....................................................................................................................60% risk for a maximum 1% fee.....................................................................................................................6

Quick & free to set up, quick & free to shut down.......................................................................................6

Protection from Fraud and Chargebacks......................................................................................................6

Keep Up With, and Stay Ahead of, Your Peers and Competitors..................................................................7

Improve Cash Flow.......................................................................................................................................7

It’s the Most Environmentally Sustainable Payment System........................................................................7

Lower Fees....................................................................................................................................................8

Increases Local & International Marketing Exposure.................................................................................11

Offering Customers another Way to Pay is Always Good for Sales.............................................................11

Increases Your Product & Service Offerings...............................................................................................11

Why do Customers Love Bitcoin?...................................................................................................................12Banking for the Unbanked..........................................................................................................................12

Security & Fraud Protection.......................................................................................................................12

Discretion & Privacy....................................................................................................................................13

Lower Fees..................................................................................................................................................13

Convenience, Global Mobility & Social Responsibility................................................................................13

Investment Potential..................................................................................................................................14

Sample Press Release – Coindesk.com...........................................................................................................15Conclusion & Recommendations....................................................................................................................16References......................................................................................................................................................17


Introduction

Free Service Offering

The free services being offered to [INSERT MERCHANT NAME HERE] are as follows:

Provide a technical and commercial Bitcoin presentation and report to [INSERT MERCHANT NAME

HERE] management

Assist [INSERT MERCHANT NAME HERE] in implementation of Bitcoin as a method of payment at

physical locations and online

Promotion of [INSERT MERCHANT NAME HERE] on social and news media, including

o Promotion on Reddit.com’s Bitcoin site (120,000 subscribers)

o Promotion on Coindesk.com (275,000 daily visitors) (μStat, 2014)

o Listing on global Bitcoin directory, Coinmap.org

About Me

[A small paragraph here about who you are, and why a merchant should trust you to help them with this

Bitcoin implementation. This could include your professional background, academic background, extra-

curricular background, or anything relevant to your target merchant]

Academic Qualifications [Insert relevant qualifications here]

Professional Memberships, Qualifications & Licences [Insert relevant memberships, qualifications and licences here]

[your name here] 1


What is Bitcoin?

A Brief History

Bitcoin is an economic technology and digital currency that was invented in November 2008 (Nakamoto,

2008) as a response to the crisis that crippled the international financial and credit markets earlier that

year. As Bitcoin continues to grow and be accepted as a method of payment and global digital currency, the

impacts of future financial crashes can be reduced, or even eliminated altogether.

With the invention of Bitcoin, merchants now have the option of increasing their profits, reducing their

costs and risks, and reaching new local and international markets – all with the click of a few buttons.

Several Bitcoin investors and visionaries have also become very wealthy, after witnessing the value of one

Bitcoin rise from less than 5 cents in July 2010 to over $660 in June 2014 – an astronomical rise of over

13,000 times over 4 years. Its increase in value from June 2013 to June 2014 is an impressive increase of

over 8 times from about $80 per coin to over $660.

Bitcoin has sometimes been referred to as “Magic Internet Money” due to its technical complexity and

difficult-to-understand nature. The following sections of this proposal provide a more complete picture of

the breadth, power and robustness of Bitcoin as a technology and payment network.

Figure 1 - Bitcoin Price History – Bitstamp Exchange (Bitcoin Charts, 2014)

[your name here] 2


Bitcoin is a Payment System

First and foremost, Bitcoin is an open-source online international payment system that is not controlled by

any central authorities. It is powered by an international network of volunteers called “miners”, who are

rewarded with Bitcoin for processing transactions. Transactions are processed by solving highly

complicated algorithms based on military-grade security and encryption using either standard home and

office PCs, or highly specialised computer equipment with much more processing power. Due to the

distributed digital nature of the network as well as the level of security that the Bitcoin network affords to

its participants, it is impossible to counterfeit or destroy Bitcoins, and transactions to and from anywhere

on the planet are effectively instant. All you need is an internet connected device to transact on the

network.

Bitcoin is Digital Gold

As well as being a payment technology and network, each Bitcoin, which is currently divisible into 100

million smaller parts, has value based on its scarce and indestructible nature, and obvious utility to

merchants and their customers. Just like gold, Bitcoins are mined, and over time they become increasingly

difficult to mine as scarcity and competition increase, eventually running out. There have been about 13

million Bitcoins mined to date, and there will only ever be 21 million of them mined. Mining supply is

perfectly predictable thanks to Bitcoin’s protocol, with mining output halving every 4 years, eventually

reaching zero. Bitcoins will be mined until the year 2140, however, over 95% of all Bitcoins will have been

mined during the next two decades.

Bitcoin is Digital Cash

In additional to being similar to gold, Bitcoin is also very similar to cash in several ways, but electronically

superior to it. Several customers and merchants love cash because of the speed and anonymity it provides

over electronic payments. Bitcoin is identical in anonymity to cash in that, even though every single cash

note has a serial number on it, it is very difficult to trace a serial number or marked bill back to an

individual. With that said, authorities may still be able to track down bank robbers or money launderers if

bills are marked. Similarly, if a Bitcoin heist were to occur, a competent team of detectives may be able to

trace and track down a thief. For all other intents and purposes, Bitcoins are as anonymous a way to pay for

things both online and at physical points of sale as cash is, and payments are effectively instant. If “Cash is

King”, then Bitcoin is the Emperor!

[your name here] 3


Bitcoin vs. Gold vs. Cash

The below table serves as a great summary of Bitcoin’s superiority over gold and other international currencies.

Bitcoin Gold Cash

Counterfeit-Proof Yes No No

Easy to carry around Yes NoNotes – Yes (to an

extent)Coins - No

Instantly internationally transferrable &

spendableYes No No

Increases in value over time Yes Yes No

Easily divisibleYes – divisible to 100

million parts

Somewhat – can be physically split into ounces and grams

Yes – divisible into 100 cents

Accepted as payment by merchants Yes No Yes

Can be used as an investment Yes Yes No

Subject to control by centralised authorities No Yes Yes

Subject to high fees No Yes Yes

Can be created out of thin air No No Yes

Can be accepted online without an

intermediaryYes No No

Can be stolen from you if you aren’t careful

Yes – but becoming more difficult as the technology matures

Yes Yes

Can be destroyed No No Yes

Has a low environmental & social

impactYes No No

Has other non-monetary applications Yes Yes No

[your name here] 4


How and where can I accept Bitcoin?You can accept Bitcoin anywhere you have an internet connection, and on any website.

At Point of Sale

Accepting Bitcoin at a physical point of sale is a very simple two-step process. A typical Bitcoin POS system is shown below.

Step 1

Log in to your merchant account on any internet connected device (PC, Mac, Tablet or Smart Phone), enter the sale amount in Australian Dollars, and click “Pay”.

Each merchant account can have an unlimited amount of users assigned to it, so additional “POS terminals” can be rolled out free and instantly to any other internet connected device.

Step 2

Once you click “Pay”, a unique QR code is generated, which your customer then scans with their phone. Once scanned, they payment is complete, and payments are confirmed within a few seconds.

Once payment is confirmed, the Bitcoins are instantly converted to Australian Dollars for a flat fee, and put into your nominated bank account the next day.

It’s that easy!

Online

Bitcoin payments can be integrated easily and stylishly into any website or e-commerce platform, and can be customised to look however the merchant needs or desires.

Similar to the Point-of-Sales system, QR codes and invoice numbers are generated for your online sales.

[your name here] 5


Why do Merchants Love Bitcoin?There are several reasons why merchants love Bitcoin, but the main reason they love it is because it

increases their profitability and revenue, and reduces their costs and risks. Details on how Bitcoin achieves

all this are provided below.

0% risk for a maximum 1% fee

At the current stage of Bitcoin’s technological life, the day-to-day price of Bitcoin can be more volatile than

a merchant is willing to accept. Thankfully, there are several local Bitcoin payment processors who are able

to instantly exchange your Bitcoins into Australian dollars at the moment of sale for a small fee of 1%, or as

low as 0.5% depending on your monthly transaction volumes. The money is deposited in your bank account

the next day. I have strong connections with several local payment processors, and will be able to get you

set up quickly and at no cost.

If a merchant decides to settle in Bitcoin, the fee is 0%, however, a merchant will be subject to the short-

term price volatility of Bitcoin in that situation.

Quick & free to set up, quick & free to shut down

Once the decision to accept Bitcoin has been made by a merchant, set-up time is about as quick as opening

up a bank account, and all you need is an internet connected device like a PC, laptop, tablet or smartphone

to start accepting Bitcoin. There are no establishment fees, equipment fees, monthly fees, or transaction

minimums. All you need is an internet connect device, and the payment processor will take care of the rest

for a maximum of a 1% fee.

Although it costs you nothing to set up and make Bitcoin payment available to your customers, if you ever

want to stop accepting Bitcoin for some reason, all you have to do is stop accepting it – there is no need to

call anyone to cancel any plans, or pay service cancellation fees of any sort.

Protection from Fraud and Chargebacks

Credit card fraud costs the Australian economy billions of dollars annually, and the global economy a

staggering $190 billion per year (LexisNexis, 2013). A high proportion of this fraud is related to the use of

credit and debit cards. Every day, merchants are at risk of being paid with a fraudulent or stolen credit card,

and have to go through the slow, expensive and painstaking process of processing chargebacks.

Bitcoins are single use only, cannot be counterfeited, and cannot be charged back. Once the transaction is

processed, the money is in the merchant’s bank the next day. Guaranteed.

[your name here] 6


Leading international research firm LexisNexis estimates that merchants lose 0.51% of their revenue to

online fraud each year (LexisNexis, 2013). CyberSource, a unit of Visa Inc. and one of the largest

international providers of payment processing and risk management services, estimates the yearly loss to

be 0.9% (CyberSource, 2013). Although these figures appear quite small, when added to your bottom line,

they result in a significant increase to your profit margin.

Keep Up With, and Stay Ahead of, Your Peers and Competitors

Due to the obvious advantages Bitcoin brings to customers, several of your industry peers and competitors

have begun to accept Bitcoin as a method of payment. A few examples are listed below.

Example Peer/Competitor 1




Improve Cash Flow

It is frequently said that “Cash Flow is More Important than Your Mother”, and speeding up your days-

receivable ratio goes a long way to reducing your credit risk and increasing profitability. By accepting

Bitcoin, money is usually in your bank-account within 24 hours (depending on the availability of the legacy

banking system of course!). Merchants no longer have to spend time and energy chasing down payment

processors at the end of the month to get paid, nor do they have to wait 3-5 business to be paid by credit-

card processors or banks.

It’s the Most Environmentally Sustainable Payment System

Comparing Bitcoin to our other forms of physical money like gold, notes and coins, Bitcoin is the clear

winner. Over 4 billion tonnes of rock need to be soaked in 810 billion litres of water with 400,000 tonnes of

toxic cyanide in it to extract the 2700 tonnes of gold we mine every year. Not to mention the quarter-of-a-

[your name here] 7


million tonnes of metal needed for coins, and the thousands of tonnes of cotton and linen for paper money.

Bitcoin only uses electricity, and only a little bit of it at that. The energy consumption and carbon emissions

of the three types of money are shown on the table below (McCook, 2014):

The Relative Sustainability of Money

Energy Used (GJ) Tonnes CO2 Produced

Gold Mining & Recycling 500 million 58 million

Physical Currency Printing & Minting 39.6 million 6.7 million

Bitcoin Mining 3.3 million 0.55 million

Lower Fees

Bitcoin vs. EFTPOSThe below table shows a comparison of typical fees paid for EFTPOS debit and credit card services,

including one EFTPOS terminal (Commonwealth Bank of Australia, 2014) compared with Bitcoin, for

different monthly transaction volumes.

Physical Mobile EFTPOS & EFTPOS Transactions

Monthly Volume

Fixed Monthly Fee

Bank Fee Rate (%)

Avg. Chargeback/

Fraud Rate (%)

Bitcoin Comparison

Rate (%)Yearly Savings

Addition to Profit Margin

(%)

$1,000 $60 6.00% 0.90% 1.00% $708 5.90%

$2,000 $60 3.00% 0.90% 1.00% $696 2.90%

$3,000 $60 2.00% 0.90% 1.00% $684 1.90%

$6,000 $90 1.50% 0.90% 1.00% $1,008 1.40%

$9,000 $120 1.33% 0.90% 1.00% $1,332 1.23%

$12,000 $150 1.25% 0.90% 1.00% $1,656 1.15%

$15,000 $180 1.20% 0.90% 1.00% $1,980 1.10%

$30,000 $330 1.10% 0.90% 1.00% $3,600 1.00%

$60,000 $630 1.05% 0.90% 1.00% $7,200 1.00%

$100,000 $1,000 1.00% 0.90% 1.00% $12,000 1.00%

$1,000,000 $10,000 1.00% 0.90% 1.00% $168,000 0.90%

Other FeesIn addition to the above fees, merchants are liable for a monthly fee of $15 for every additional EFTPOS

terminal they require. There are no equipment fees in the world of Bitcoin.

[your name here] 8


Bitcoin vs. Online Credit Card PaymentsThe below table shows a comparison of typical fees paid to an online credit card payment processor

(Commonwealth Bank of Australia, 2014) compared with Bitcoin, for a monthly transaction volume of over

$150,000. [If your target merchant has a lower monthly transaction volume, use the fee rates found in

the accompanying spreadsheet]

Online Payments Processing - via BankMonthly Transaction

VolumeOver

$150,000

Transaction Size

Per Transactio

n % Fee

Per Transaction Fixed Fee

Monthly Fixed Fee

Avg. Chargeback/ Fraud Rate

(%)

Total Fees (%)

Bitcoin Comparison Rate (%)

Savings Per Transaction

($)


(%)

$1 1.40% $0.29 $10 0.90% 31.30% 0.50% $0.31 30.80%

$2 1.40% $0.29 $10 0.90% 16.80% 0.50% $0.33 16.30%

$5 1.40% $0.29 $10 0.90% 8.10% 0.50% $0.38 7.60%

$10 1.40% $0.29 $10 0.90% 5.20% 0.50% $0.47 4.70%

$25 1.40% $0.29 $10 0.90% 3.46% 0.50% $0.74 2.96%

$50 1.40% $0.29 $10 0.90% 2.88% 0.50% $1.19 2.38%

$100 1.40% $0.29 $10 0.90% 2.59% 0.50% $2.09 2.09%

$500 1.40% $0.29 $10 0.90% 2.36% 0.50% $9.29 1.86%

$1,000 1.40% $0.29 $10 0.90% 2.33% 0.50% $18.29 1.83%

Other FeesIn addition to the above fees, merchants are liable to a $30 fee for every chargeback, as well as a $110

service cancellation fee. These fees do not exist in the world of Bitcoin.

[your name here] 9


Bitcoin vs. PayPalThe below two tables show a comparison of typical fees paid to PayPal (PayPal, 2014) compared with

Bitcoin, for a monthly transaction volume of over $150,000. Fees are substantially higher for lower monthly

transaction volumes. As can be seen from the tables, payments from international customers are subject to

higher fees for merchants, and customers also typically have to pay a 2.5% foreign currency exchange fee if

making international purchases. There are no foreign exchange fees in the world of Bitcoin.

Local Customers

Online Payments Processing - via PayPal (Local Customers) Monthly Transaction Volume

Over $150,000

Transaction Size

Per Transaction %

Fee

Per Transaction

Fixed Fee


(%)

Total Fees (%)

Bitcoin Comparison

Rate (%)

Savings Per Transactio

n ($)


(%)

$1 1.10% $0.30 0.90% 32.00% 0.50% $0.32 31.50%

$2 1.10% $0.30 0.90% 17.00% 0.50% $0.33 16.50%

$5 1.10% $0.30 0.90% 8.00% 0.50% $0.38 7.50%

$10 1.10% $0.30 0.90% 5.00% 0.50% $0.45 4.50%

$25 1.10% $0.30 0.90% 3.20% 0.50% $0.68 2.70%

$50 1.10% $0.30 0.90% 2.60% 0.50% $1.05 2.10%

$100 1.10% $0.30 0.90% 2.30% 0.50% $1.80 1.80%

$500 1.10% $0.30 0.90% 2.06% 0.50% $7.80 1.56%

$1,000 1.10% $0.30 0.90% 2.03% 0.50% $15.30 1.53%

International Customers

Online Payments Processing - via PayPal (International Customers) Monthly Transaction Volume

Over $150,000

Transaction Size

Per Transaction %

Fee

Per Transaction

Fixed Fee


(%)

Total Fees (%)

Bitcoin Comparison

Rate (%)

Savings Per Transactio

n ($)


(%)

$1 2.10% $0.30 0.90% 33.00% 0.50% $0.33 32.50%

$2 2.10% $0.30 0.90% 18.00% 0.50% $0.35 17.50%

$5 2.10% $0.30 0.90% 9.00% 0.50% $0.43 8.50%

$10 2.10% $0.30 0.90% 6.00% 0.50% $0.55 5.50%

$25 2.10% $0.30 0.90% 4.20% 0.50% $0.93 3.70%

$50 2.10% $0.30 0.90% 3.60% 0.50% $1.55 3.10%

$100 2.10% $0.30 0.90% 3.30% 0.50% $2.80 2.80%

$500 2.10% $0.30 0.90% 3.06% 0.50% $12.80 2.56%

$1,000 2.10% $0.30 0.90% 3.03% 0.50% $25.30 2.53%

Other FeesIn addition to the above fees, merchants are liable for a $15 fee for every chargeback. There are no chargebacks in the world of Bitcoin.

[your name here] 10


Increases Local & International Marketing Exposure

The Bitcoin community is a vibrant, eclectic and rapidly growing one. To date, several million people have

opened Bitcoin accounts locally and internationally. Coinbase, the USA’s leading Bitcoin provider, witnessed

growth from 13,000 users in 2013, to 1.3 million users in June 2014 – a yearly growth rate of 10,000%!

(Coinbase, 2014). Blockchain.info has seen 1.6 million users create accounts since their founding in early

2012, with 1.3 million of those accounts coming online in the past year (Blockchain.info, 2014). Due to

Bitcoin’s popularity means that there is a thriving ecosystem underpinning it, with the most popular Bitcoin

news sites receiving monthly website hits in the tens of millions. As a merchant who accepts Bitcoin, you

will be embraced by the community, and receive free exposure through press releases, tweets, and blog

posts.

Further to the above, when you become a Bitcoin merchant, simply adding “Bitcoin” to your website’s

Search Engine Optimisation (SEO) will increase your exposure through search engines, especially if you are

one of the early movers in your industry. Try it yourself – just Google “Bitcoin [Insert business / product /

service type here]” and take a look.

Offering Customers another Way to Pay is Always Good for Sales

In the early days of credit cards, businesses who didn’t offer the customers a means of paying by card lost

lots of potential business. The benefits of accepting credit cards back then were (Burke, 2005):

Makes it more convenient for your customers to pay you

Generally increases sales

Increases credibility

Increases Impulse purchases

Increases average sales order

Accepting Bitcoin provides merchants with all of the above benefits, but without the high fees, and fraud

and chargeback risks. Also, if your customers don’t have access to a credit card or PayPal address (or,

simply don’t want to use their credit card), they’ll be able to pay you!

Increases Your Product & Service Offerings

Several businesses hesitate selling cheap physical and digital goods online due to the high fees associated

with micropayments. As shown in the Fees section above, selling a digital product for $5 attracts 8.5%

worth of fees. Considering digital content like music, e-books, gift vouchers and the like frequently sell for a

small amount, you can safeguard a much greater portion of your margin by accepting bitcoin, which has a

maximum fee of 1%, regardless of the transaction size.

[your name here] 11


Why do Customers Love Bitcoin?

Banking for the Unbanked

While credit cards are quite common in Australia and other rich countries, credit cards, or even bank

accounts, are simply not very common at all for a huge chunk of the human population. A study undertaken

by leading research institute Gallup, shown below, shows the extent of problem (Gallup, 2012).

Credit Card Ownership, by Region (Geographical regions include developing economies only)

Region % who have a credit card

High-income Economies 50%

Latin America & the Caribbean 18%

Europe & Central Asia 16%

East Asia and Pacific 7%

Sub-Saharan Africa 3%

Middle East & North Africa 2%

South Asia 2%

Many of these people would love to participate in the online economy, but until Bitcoin was invented, had

very limited options. The minimum that is required is the most primitive of 2G or GPRS internet

connections and a $10 “dumb-phone”, and Bitcoins can be transmitted from one person to another

(37coins, 2014).

Security & Fraud Protection

The internet can be a scary place, and not all consumers feel comfortable with handing over their credit

card information to merchants they don’t know. With that said, even the most trusted of sellers and the

largest of online merchants are not safe from hackers breaking into their customer databases and stealing

customer credit card information. Six of the biggest-ever credit card hacks are shown below (CNN Money,

2013):

Merchant Number of Credit Card Details Obtained by Hackers

Adobe Systems 150 Million

Heartland Payment Systems 130 Million

TJ Maxx 94 Million

Sears 90 Million

Sony 77 Million

Target 50 Million

[your name here] 12


The risk of theft of personal financial information simply doesn’t exist in the world of Bitcoin. Once you pay,

your Bitcoin is spent and no information can be reused by malicious parties.

Discretion & Privacy

Several people today are concerned with their online privacy for one reason or another. Typically, when

you purchase something with your credit card, details of your payments and who you paid money to are

permanently recorded on your bank statements. Whilst this is OK for most consumers, several consumers

do not like leaving an electronic paper trail which catalogues their movements and expenditures.

Because of Bitcoin’s cash-like nature, there is no easily identifiable electronic paper-trail left behind after a

transaction is made, giving consumers the privacy and discretion they yearn for.

Lower Fees

Not only do merchants pay high fees for accepting online and point-of-sale payments, customers also face

several local and international fees as part of the legacy banking and credit card systems. Several banks

charge monthly account keeping fees, and most credit cards charge an annual subscription fee. On top of

this, international customers are liable for expensive international transaction and foreign exchange fees

every time they make a purchase whilst outside of their home country.

All of these fees are avoided when paying in Bitcoin.

Convenience, Global Mobility & Social Responsibility

One of the least convenient things for international customers and travellers is the hassle, cost and risk of

currency conversion. Whilst most cities in the world are well regulated and safe places, several aren’t, and

travellers face the risk of dishonest foreign exchange merchants, as well as the additional risk of carrying

large amounts of cash in potentially unsafe places.

Bitcoin can be held on a mobile phone, and so long as the phone and Bitcoin wallet are locked with a PIN

and password, you are safe from theft. If your phone happens to be stolen during your travels, your

Bitcoins can be easily restored to any other device if they have been backed up.

In addition to this, citizens of several of the World’s poorest countries face exorbitant fees of over 20%

when remitting money from their country of work back home to their country of origin. Typical remittance

costs for a $200 and $500 transfer are shown in the tables below. As can be seen, in the best case, fees are

1.73% and 1.2% respectively, but in the worst case, they are 21.06% and 13.44% respectively (World Bank,

2014). The global average cost of a remittance is 8.36% of the amount sent (World Bank, 2014).

[your name here] 13


These fees do not exist in the world of Bitcoin.

Fee % for a Remittance of USD$200

5 Most Costly Corridors ($USD) Average Cost 5 Least Costly Corridors ($USD) Average Cost

South Africa > Zambia 21.06% Saudi Arabic > Pakistan 1.73%

South Africa > Botswana 20.18% Singapore > Thailand 2.05%

South Africa > Mozambique 19.81% UAE > India 2.68%

South Africa > Zimbabwe 19.55% UAE > Sri Lanka 2.87%

South Africa > Malawi 19.51% Singapore > Bangladesh 3.03%

Fee % for a Remittance of USD$500

5 Most Costly Corridors ($USD) Average Cost 5 Least Costly Corridors ($USD) Average Cost

South Africa > Malawi 13.44% Saudi Arabic > Pakistan 1.20%

South Africa > Zambia 13.36% UAE > India 1.46%

South Africa > Botswana 12.69% UAE > Sri Lanka 1.48%

South Africa > Mozambique 12.27% UAE > Philippines 1.65%

South Africa > Zimbabwe 11.23% USA > India 1.71%

Investment Potential

While Bitcoin is sometimes unfairly panned in the media for being too volatile and causing damaging losses

to investors, the statistics and numbers speak for themselves. The below two tables shows performance of

Bitcoin as an asset class for the 2014 year to date, the past month, 3 months, year, and 3 years (Bitcoin

Charts, 2014) in comparison with the ASX200 (Reuters, 2014). As can be seen in the table, Bitcoin has

consistently outperformed the Australian Stock Market significantly over the past 3 years. Volatility has

meant that Year-to-date performance has been weaker than the stock market, however, over longer

investment periods, Bitcoin has always proven to be a superior asset. Returns are based on a closing Bitcoin

Price of USD$661.22 on June 1, 2014.

Investment Period Bitcoin Return ASX200 Return

1 Month (May 1, 2014) +44.2% +2.0%

3 Months (March 1, 2014) +18.8% +3.1%

1 Year (June 1, 2013) +416.0% +12.6%

3 Years (June 1, 2011) +7079.4% +18.9%

Year-To-Date (Jan 1, 2014) -11.3% +5.0%

[your name here] 14


[your name here] 15


Sample Press Release – Coindesk.com

[INSERT MERCHANT NAME HERE] Becomes First [insert business type here] To Accept Bitcoin!

[Write a few paragraphs about the merchant – there are several great examples on Coindesk.com. A good estimate of article length is 1 page in MS Word at 1.5 spacing]

[your name here] 16


Conclusion & RecommendationsThere are no disadvantages, costs or risks involved accepting Bitcoin as a method of payment, and there

are significant upsides in the way of marketing exposure and cost and risk reduction. You can be up and

running in a matter of days in partnership with a fully licenced, regulated and trustworthy payment

processing provider. Once you are set up, marketing can commence immediately, all at a cost to you of $0.

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[your name here] 17


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Blockchain.info, 2014. Number Of Users. [Online] Available at: https://blockchain.info/charts/my-wallet-n-users?timespan=1year&showDataPoints=false&daysAverageString=1&show_header=true&scale=1&address=[Accessed 1 June 2014].

Burke, S., 2005. Accepting Credit Cards - Positives vs. Negatives. [Online] Available at: http://www.smallbusinessbrief.com/articles/merchant_accounts/003644.html[Accessed 7 June 2014].

CNN Money, 2013. 5 of the biggest-ever credit card hacks. [Online] Available at: http://money.cnn.com/gallery/technology/security/2013/12/19/biggest-credit-card-hacks/[Accessed 20 May 2014].

Coinbase, 2014. About Coinbase. [Online] Available at: https://coinbase.com/about[Accessed 1 June 2014].

Commonwealth Bank of Australia, 2014. CommWeb Online Merchant Service & Fees. [Online] Available at: https://www.commbank.com.au/business/merchant-services/help-me-choose-tool.html##slide_3[Accessed 2 May 2014].

CyberSource, 2013. 2013 Online Fraud Report, s.l.: CyberSource.

Gallup, 2012. Credit Cards and Formal Loans Rare in Developing Countries. [Online] Available at: http://www.gallup.com/poll/154340/credit-cards-formal-loans-rare-developing-countries.aspx[Accessed 2 June 2014].

LexisNexis, 2013. 2013 LexisNexis True Cost of Fraud Study, s.l.: LexisNexis.

McCook, H., 2014. An Order-of-Magnitude Estimate of the Relative Sustainability of the Bitcoin Network, Sydney: Bitscan.

Nakamoto, S., 2008. Bitcoin: A Peer-to-Peer Electronic Cash System. [Online] Available at: http://bitcoin.org/bitcoin.pdf[Accessed 15 December 2013].

PayPal, 2014. Combined Financial Services Guide and Product Disclosure Statement. [Online] Available at: https://www.paypal.com/webapps/mpp/ua/cfsgpds-full?country.x=AU#18_Fees_and_charges[Accessed 24 May 2014].

[your name here] 18


Reuters, 2014. ASX 200 Performance Data. [Online] Available at: http://www.reuters.com/finance/stocks/chart?symbol=STW.AX[Accessed 2 June 2014].

World Bank, 2014. An Analysis of Trends in the Average Total Cost of Migrant Remittance Services. [Online] Available at: https://remittanceprices.worldbank.org/sites/default/files/RPW_Report_Mar2014.pdf[Accessed 7 June 2014].

World Bank, 2014. Remittance Prices Worldwide. [Online] Available at: https://remittanceprices.worldbank.org/en[Accessed 8 June 2014].

μStat, 2014. Coindesk.com Website Analytics. [Online] Available at: http://www.mustat.com/coindesk.com[Accessed 1 June 2014].

[your name here] 19

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