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Student starts BitCoin company

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Jon Gulley, a junior at Oklahoma Christian University, created and leads SudoMine, a startup company using the crypto-currency known as BitCoin.

“For the general person, [BitCoin] is a different currency,” Gulley said. “Instead of a government deciding how much it is worth, the people and the math behind the system decide how much it is worth. People use BitCoins for transactions; other people use computers to process the transactions. The people who process the transactions get paid for processing. SudoMine is purchasing the hardware to process the transactions.”

Gulley started the company as a Limited Liability Company and is now selling shares to those who are interested in investing.

“The company I am starting is named SudoMine, registered as an LLC in Oklahoma,” Gulley said. “SudoMine is going to expand to do multiple things, but right now we are focused on BitCoin mining and selling mining shares.”

There is a direct correlation between processing power and shares of the company.

“Buying a share is equal to a certain amount of processing power,” Gulley said. “We are starting at 100 megahash of BitCoin processing power per share, and that gives you the dividends of that share. The funds from the shares are taken by the hardware to provide the processing power for that.”

The transactions that SudoMine handles require a more in-depth explanation to help understand the BitCoin transaction process.

“The BitCoin algorithm pays you out a certain amount of BitCoin when you process a group of transactions known as a ‘block’ of transactions,” Gulley said. “Currently you get 25 BitCoins if you finish a group of transactions.”

To solve a ‘block’ of transactions, it requires more processing power then the average computer is able to provide.

“Most people do not have the processing power to complete a block of transactions by themselves, so they do it in mining pools,” Gulley said. “There are mining pools such as Eclipse Mining Consolium where a bunch of people work together to solve the block and they split the work.”

An individual using the alias Satoshi Nakamoto introduced the idea of BitCoins. BitCoin was the first crypto-currency and is maintained by a group of developers.

“BitCoin is a decentralized, distributed currency, where no one person can control BitCoin,” Gulley said. “There are a group of developers that maintain and update the software that handles everything, but the core of BitCoin algorithm doesn’t change.”

Although crypto-currency is intended as a supplement to government-controlled currency, there is more to understand before becoming involved in BitCoin.

“If you don’t understand it, don’t invest in it and that is true with BitCoins, options or corn,” Associate Professor of Business Jody Jones said. “If you don’t understand how the market works for it you are crazy to invest in it. I will tell you that some people didn’t think ATMs would last; the market has done some weird things before.”

SudoMine is going to track and solve the BitCoin transactions through specially made hardware that solves the BitCoin algorithms, and SudoMine is paid for the processing work that it completes.

The processing of transactions has always happened through computers, but has developed since 2009; using different hardware components to complete the BitCoin algorithm.

“BitCoin mining used to be done with CPUs like regular computers, then it moved to graphics cards because they found GPUs could do it a lot faster then CPUs,” Gulley said. “The most efficient way is to use ASICS or chips made specifically to do BitCoin.”

ASICS is an Application-Specific Integrated Circuit that is made specifically to handle the SHA-256 BitCoin algorithm. SudoMine is using the ASICS model Monarch built by Butterfly Labs that can process 600 gigahash per second.

“This opportunity is for those people who cannot afford the $5,000 machine to get the good hash rate to dollar value, so I meet them in the middle somewhere,” Gulley said. “They get better than what they could afford and still provides headroom for me to operate the machines. My goal is to continually increase the hash rate.”

Joining SudoMine starts with the purchase of a share. Gulley is selling shares on a face-to-face basis or through email to anyone interested.

“Shares are currently at $10 per share for .08 BitCoin,” Gulley said. “When you purchase a share, I associate them with your username. Once we are established on the website [BitFunder] I will transfer them to your BitFunder account. Then every week or two weeks the BitCoin that your hash rate made will be transferred to your account and from there you can do whatever you want with it.”

 

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