Coastal Trails Inc.
352-420 Pinelawn Ave
New York, NY 11865 MEMORANDOM
TO: Paul Pascal, President
FROM: Melanie Soto, Chief Technology Officer
DATE: April 21, 2014
RE: Bitcoin Research Introduction:
What is Bitcoin? First to answer that question, Bitcoin is another way the average consumer can sell and buy products. The way bitcoin is used is through any computer with Internet connection. As long as you have a computer you can purchase and sell items. A benefit that this has is that the accounts aren’t managed through third parties or banks therefore you can send and receive transactions with a click of a button. There are two ways that you can obtain bitcoins.
One way is through mining. You have an electronic wallet on your desktop, laptop, iPad, etc. . This wallet keeps track of how many bitcoins you have and you can than start mining. Mining is when you allow you join a pool that links with other people who are mining to generate bitcoin money with the help of each other’s servers. The second way is to actually purchase a bitcoin. Problem: There are numerous ways that you can purchase Bitcoins but it all depends on which exchange process you use to purchase them. Overall bitcoin is very easy to maneuver but the actual value is not so stable. Since there is a certain amount of bitcoins that were made the value of the currency fluctuates. Meaning if the coins are in popular demands than they are going to be worth more because more people are trying to collect them and when the coins are being neglected they can easily have a drop in value. Discussion: Two transactions that I would like to bring to your attention will be one made by the hybrid car company Tesla made in 2013. “The buyer, who wishes to remain anonymous, bought the top-of-the-line Tesla (TSLA) for $103,000, which was equivalent to 91.4 bitcoins.” This transaction stuck out to me because the value of the bitcoins that were used to purchase the expensive Tesla hybrid dropped. But lucky for Tesla the bitcoins were processed and transferred to them before that drop happened so they were no conflicts. The other transaction was one that was made just recently this year. “A brand-new villa on the southern coast of Bali has just changed hands — for somewhere above 800 bitcoins. In what appears to be the largest real-world-money purchase in bitcoin's history, an anonymous buyer has picked up a new house for the crypto currency equivalent of about $500,000.” That’s right a house was actually purchased through bitcoins.
Conclusion:
Just to point out the change in how much bitcoins values changed between 2013-2014. In the first transaction presented 91.4 bitcoins were equal to the amount of 103,000 in U.S. dollars that means that each bitcoin had to have been worth about 1,126.91. Than in the second transaction in the article it states “The exact bitcoin amount is unknown as well — the buyer and seller would have had to come to an agreement on the exchange rate, which at the time of sale was about $610 per coin.”
Which leads me to my conclusion on how bitcoin can fluctuate with its value. Between the time span of one year the value in bitcoins dropped to about $516.91 in U.S. dollars. Yes it is a good way to reach out to consumers who are tech savvy and are into trying new things and open to an internet world of online transactions but it’s just the actual currency and the value that might set the company back if you sell a product at the wrong time.

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[ 1 ]. A Florida Man Bought a Tesla Model S from a Lamborghini Dealership in Newport Beach, Melanie. "Someone Bought a $100,000 Tesla with bitcoins."CNNMoney. December 06, 2013. Accessed April 29, 2014. http://money.cnn.com/2013/12/06/autos/tesla-bitcoin/.
[ 2 ]. COLDEWEY, Devin. "$500,000 in Bitcoin Just Bought Someone a Villa in Bali - NBC News." NBC News. March 19, 2014. Accessed April 29, 2014. http://www.nbcnews.com/tech/internet/500-000-bitcoin-just-bought-someone-villa-bali-n57211.
[ 3 ]. . "$500,000 in Bitcoin Just Bought Someone a Villa in Bali - NBC News."