BUSINESS AND STRATEGY PLAN
For
Tichenor Crypto Solutions, LLC
A Member Managed Illinois Limited Liability Company
Executive Summary
Mission Statement:
Tichenor Crypto Solutions, LLC (TCS hereafter) will be a profitable leader in the
emerging bitcoin mining and digital currency industry by acquiring the the best
mining hardware technology, sourcing the lowest hosting costs, and providing
the greatest value and investment opportunities possible for its members. TCS
will operate in accordance with all federal and state laws and regulations and will
be fully transparent in its operations to all members. TCS will be a champion of
bitcoin, the blockchain, and other digital currencies. TCS will donate a
percentage of profits to charitable organizations accepting bitcoin.
Company Information:
TCS was formed on December 9, 2014 by John R. Tichenor, Jr. (Rob) and his
father, John R. Tichenor, Sr. (Bob) as a Illinois Limited Liability Company. Rob
and Bob currently each own 50% of the business. Prior to 2016, TCS will file to
be taxed as an S Corporation to reduce the tax burden of its members.
Management Bios:
Rob Tichenor, CEO, is leading daily operations, sourcing, business development,
and accounting. Rob has 15 years experience in many aspects of business and
has been a supply management professional for 12 years. Currently, Rob is
Corporate Senior Buyer at Continental Carbonic Products, Inc. (CCPI) where he is
responsible for sourcing of all services and materials for CCPI’s eight production
plants. Rob graduated from DePauw University in 2000 with a liberal arts degree
in Business & Management. Rob is a Certified Purchasing Manager (C.P.M.) and
has extensive experience in sourcing, vendor management, quality, contract
negotiations, pricing, domestic and international logistics, and is a bitcoin and
digital currency expert and enthusiast.
Bob Tichenor, President, is leading marketing, member relations, and advisory
services. Bob, retired after a successful business career, is a tenured business
professional and entrepreneur. Bob has been involved in all aspects of business
from running his own gas station, to being an award winning automotive sales
manager, and most recently bringing his talents to the family business,
Tichenor’s Institutional Services (T.I.S.), operator of T.I.S Bookstores and other
business units. Bob was instrumental in the strong growth of the college
bookstore business by opening stores at Ball State University (Muncie, IN) and at
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the University of Illinois (Champaign, IL). Bob is and was an outstanding leader
and manager that has excelled in every position he has had from car sales to
managing college bookstores. Bob attended Indiana University.
Product/Service:
TCS is a bitcoin mining company. TCS provides its transaction processing power
to the bitcoin network in return for compensation. TCS does not require
employees to operate and does not carry any inventories. TCS invests in high
power computers and hosts them in contracted data centers. These computers
process transactions on the bitcoin network and generate revenue for the
company.
Initial Funding Information:
The founding Members of TCS, Rob and Bob Tichenor, initially contributed
$65,000 in order to start the company. Costs included, LLC setup, finding
equipment partners, finding hosting services, purchasing bitcoin mining
equipment, travel to North American Bitcoin Conference in Miami to network with
industry experts and investors, and general expenses. The LLC currently has
issued 100,000 membership units.
Future Plans:
The members of TCS plan on using equity financing to expand the mining
business significantly and enhance the Company’s profitability. The focus of the
company will remain on providing computing power to the rapidly growing
bitcoin ecosystem and to investigate other opportunities for investments in the
space. Reinvestment of a portion of the profits will be critical to maintaining a
competitive advantage in the mining business as mining technology improves.
Growth Highlights:
Rob Tichenor started mining bitcoin in November of 2014 in order to test the
feasibility and profitability of the idea. At that time, he was mining less than $20
in bitcoin per day in gross revenue. Since the formation of the company, the
daily revenue has increased to over $220 per day currently, with a daily profit
averaging $100. The business has reached a point where additional capital is
needed to build economies of scale and increase profitability and growth.
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What is a Bitcoin?
A bitcoin is open source digital form of currency, value, and/or information.
Bitcoin is also a network protocol for moving this value instantly, at no or
extremely low cost, across borders. Bitcoin is a revolution the likes of which we
have only seen in the development of the Internet. Bitcoin is doing for finance
what the Internet did for information and has tremendous potential to disrupt the
traditional financial systems. In the opinion of the TCS founding members,
bitcoin is the most important innovation since the development of Internet.
Bitcoin is the Internet of money.
Video What is Bitcoin https://youtu.be/Gc2en3nHxA4
Video Mauldin Economics https://www.youtube.com/watch?v=hrrF6Wz61HE
Video Andreas Antonopoulos https://youtu.be/x8FCRZ0BUCw
Paper Satoshi Nakamoto https://bitcoin.org/bitcoin.pdf
What is a Bitcoin Mining?
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Bitcoin mining is the term used to describe the processing and verification of
bitcoin transactions on the bitcoin network. A bitcoin miner is a powerful
computer that provides processing power to the bitcoin network. Bitcoin miners
require large amounts of electricity and produce significant amounts of heat.
These devices require hosting at specialized data center to operate at maximum
efficiency.
Bitcoin mining is the backbone of the bitcoin ecosystem. Mining is required to
secure and support the network. In short, the bitcoin network will not function
without mining, and mining, therefore, presents a significant value proposition for
members of the company.
Video What is Bitcoin Mining
https://youtu.be/GmOzih6I1zs
Website www.bitcoinmining.com
Is Bitcoin Real Money?
Bitcoin is real money. In fact, thousands of merchants accept it directly or
indirectly including Overstock.com, Newegg.com, Starbucks, Amazon, Microsoft,
Paypal, Ebay, even city governments. Consumers benefit from considerable
savings, for example, buy purchasing Amazon items through www.purse.io and
www.foldapp.com . Bitcoin is reducing the costs to transact globally.
Companies like www.bitwage.io and
www.bitpesa.co are providing low cost
remittance services to that are disrupting a $500 billion foriegn remittance
market. Other use cases include micro tipping ( www.changetip.com ), records
management ( www.factom.org ), and digital assets (
www.bitreserve.org ).
Actual Purse.io Order
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Why Invest?
Bitcoin has grown from a presumed joke by many in 2008 to an industry that got
venture capital investment of over $600 million dollars to date. Some predict that
total investments will reach $1 Billion dollars in 2015. Bitcoin has recently
received large investments from the likes of the New York Stock Exchange,
NASDAQ, and Goldman Sachs. Investors like Richard Branson (Virgin Atlantic,
Reid Hoffman (LinkedIn), Andreessen Horowitz (21, airbnb, Circle, Coinbase,
Facebook, Skype, Twitter), Tim Draper (Draper Fisher Jurvetson), Halsey Minor
(CNET), Blythe Masters (JP Morgan Chase), Pantera Capital, and Tally Capital are
investing and/or starting companies.
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Notable names in bitcoin space:
Articles:
State of Bitcoin Q1 2015
http://www.coindesk.com/stateofbitcoinq12015recordinvestmentbuoysecosystem/
Coinbase
http://www.wsj.com/articles/coinbaseraises75millioninfundinground1421762403
Circle
http://www.bloomberg.com/news/articles/20150430/goldmanjoinsbitcoinstartupcircles50millio
nfundraising
NASDAQ
http://money.cnn.com/2015/05/11/technology/nasdaqbitcointechnology/
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Current TCS Mining Statistics and Profitability
TCS Current Mining Statistics/Profitability (Per Month)
Total Hash Power 90 Terahash
Total Kilowatts 60 KW
Mined Bitcoin $6,600 $220/Day
Electricity/Hosting Cost $3,700 $123/Day
Revenue $6,600
Expenses $3,700
Gross Profit $2,900 (44% profit margin)
TCS Projected Financial Performance (Per Month) w/Investment
Total Hash Power 1,000 Terahash
Total Kilowatts 660 KW
Revenue $75,500 $2,516/Day
Expenses $38,000 $1,266/Day
Gross Profit $37,500 (50% profit margin)
Time Frame BTC Coins USD Power Cost
(in USD) Profit
(in USD)
Hourly 0.43982501 $104.91 $52.80 $52.11
Daily 10.55580020 $2,517.77 $1,267.20 $1,250.57
Weekly 73.89060140 $17,624.39 $8,870.40 $8,753.99
Monthly 316.67400598 $75,533.08 $38,016.00 $37,517.08
**The figures on this page are based on several variable factors including the bitcoin price and bitcoin mining
difficulty. Increases and/or decreases in these variables will affect the mining profitability**
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Competition
Bitcoin mining is a extremely competitive industry and that has grown more
competitive with the increase in speed of the mining machines and market
entrants. There are 3 main players in the space being home miners, mid sized
businesses, and large operators. Home miners are finding it hard to compete as
electricity costs are the main factor in profitability and significant barriers to entry
of high capital costs.
Large, enterprise size operations are a threat, however, the use of mining pools
has largely leveled the playing field for mid size businesses with access to low
cost power and funding for equipment. TCS is currently part of Slush Pool
mining.bitcoin.cz. Pools allow miners to pool their system resources together
and therefore mine with combined hashing power.
In addition to large mining operations, some companies are offering cloud based
mining services to investors. Cloud mining is not an ideal option for an investor
as the profit margins are less than owning equipment.
TCS seeks to offer investors an alternative to home and cloud based mining by
allowing members to invest in owned equipment with pool resources and share in
the combined mining and investment profits.
Investment Risks
As with any investment is an emerging technology, there are risks to investing in
this bitcoin space. Below are risks associated with an investment in the bitcoin
space:
❖ Bitcoin price is market based, can be very volatile, and investors can lose
money.
❖ Bitcoin mining difficulty goes up with as more miners enter the market.
❖ More difficulty makes it harder and more costly to mine bitcoin.
❖ Mining profitability depends several variables including the bitcoin price,
mining difficulty, and machine efficiency.
❖ Governments are still working through how they will treat and interact with
bitcoin and digital currencies.
❖ Newer mining technology could emerge that would be more energy
efficient than owned machines.
❖ Bitcoin, the currency, could fail to reach consumer mass adoption.
❖ Bitcoin, the protocol, could fail to be utilized as a protocol for future
financial systems.
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TCS Funding Request
TCS is seeking member investment of $250,000. The company can then acquire
mining equipment necessary to reach approximately 1,000 terahash or 1
petahash in mining power. This amount processing power could provide the
company a gross profit of over $450,000 in the next 12 months providing the
members significant value on their investment. In addition, the company will be
in a position to reinvest a portion of these funds to make further increases in
hashing power and to maintain its competitive advantage in the mining market
place.
Conclusion
In the opinion of the TCS founding members and many in the financial services
space, media, and academia, bitcoin is the most promising technology to emerge
since the development of the Internet. The foundation of bitcoin the network
protocol and bitcoin the network is bitcoin mining. Given the amount of venture
capital entering the space in 2014 and so far in 2015, it is clear that major players
on Wall Street and Main Street see the potential value of bitcoin and the
blockchain.
The prospective members of TCS have an opportunity to participate in this
revolution by purchasing units and potentially adding a high growth investment
to their portfolios.
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