Bitcoin Forum

https://medium.com/@21dotco/a-bitcoin-miner-in-every-device-and-in-every-hand-e315b40f2821 (https://medium.com/@21dotco/a-bitcoin-miner-in-every-device-and-in-every-hand-e315b40f2821)

Will it fly ?

It must! Anyone knows about the cell phones power requirements in standby mode and in full power mode? We need to figure out some numbers because I would like to figure out how much power will the bitcoin mining use.

It seems like a article just to get them publicity.  We are so far from in every hand, we need a lot more exposure.

And in every device just will never happen.  Some devices would be great other devices make no sense.  Like something you want longer battery life on... you would not put a miner in it.

as a way to get people interested - its cool. but the application of it is stupid.

Lets start at the top:
1) mining will make the phone hot. without a fan or heatsinks, its likely that even 5W worth of mining will get hot to the touch, and possibly a fire hazard if the phone is stuck in the couch under a blanket or pillow.
2) 5W is about 10GH worth of mining, maybe a bit more. Thats about 0.0001BTC/day when operating 24/7
3) That sort of power draw is completely impractical any time the phone isnt plugged in and on a non-flammable surface, so 2-4hrs of mining a day is more likely.
4) that means to earn $5 (the very cheapest price that a mining chip could be produced and integrated into a cellphone for) could take anything from 220days (at 24/7) to >6years if you mine 6hrs/day
5) The above does not factor in the power cost. which is probably 50% more costly than the bitcoins produced (for the average residential electricity cost)


short story: they would be better off issueing a $5 BTC voucher with the purchase of a phone, then to design a phone that makes pennies a day while operating at uncomfortable temperatures and having battery issues.

       the same goes for any 'IoT' concepts that involve building bitcoin miners in places/objects that would be mining for anything less than 12hrs/day using residential eletricity.

And another thing on phones and laptops is battery life.  If it mines when your not using it think of wifi, processor, ram, etc that would be running during off time.

I just don't see this for most products.   Water heater, space heater, etc. Yes very easily could do.  I just think this company keeps putting these out to get looked at.  And possibly trying to get more investors.  They can't believe all that they say even.

You dont think technology will be able to overcome short battery life on devices? i Figured we would already have overcome this small step, but the constant flow of data and the heat caused by would mean alot of these devices have short lifespan which would mean more turn around on replacements and even more money in big companies pockets...

Sure they could put bigger batteries.  But most likely having a miner in your pocket all day does not seem like ideal product.

Do you honestly believe every device makes sense being a miner?

Why on earth would you want to burden a PHONE with a computing task like Bitcoin mining? There is nothing free about it, and it will suck the life out of you batteries, if not run the device hot. People routinely post about "mining Bitcoin on my laptop with it's super duper GPU". The same rules apply. The phone is designed to sip the absolute minimal amount of power and keep up with E-mail and TXT, maybe GPS as well. Anything beyond that is just a waste of power and money.

Apple (and Samsung etc) go to great lengths to fit in the most capability and battery within in a tiny envelope. and not have it get too hot, and last at least all day on a charge. Just because it might be possible doesn't make it a good choice, just like mining on your laptop makes zero sense.

well again from this link

http://www.coindesk.com/21-inc-confirms-plans-bitcoin-distribution/ (http://www.coindesk.com/21-inc-confirms-plans-bitcoin-distribution/)


it has this cryptic remark

guote

Chief among these would be the existing operators of large-scale data centers who Srinivasan said could benefit from integration of BitShare chips into their operations. 21 Inc had previously been involved in talks with companies including Advanced Micro Devices (AMD), Comcast and Intel to embed the chips.

"This means any vendor can take a chip performing a normal function (say video decoding or networking), add 21’s BitShare technology and thereby enable the chip to continuously generate revenue simply by being connected to power and Internet," Srinivasan said.


unquote


so if it is an added value "preforming a valid function" ..it would be like mining at a CPU level...very very little in the way of mining but with so many chips using such it would add up

also ..I read when they were 'speculating' a few weeks ago that circle 21 was gonna do something like this on the notion of giving 'products away' say a toaster that mines bitcoin..cirlce 21 would get 75% of the coin and consumer would get 25% ...of this meager amount ....even if that is just press fud from 2 weeks ago...the notion that circle 21 could get even say 20% of all action as an added value in ALL....  say AMD graphic cards..even at a mining rate that would do little if any to effect the card..as imho the above quote seems to imply...same for cell phones..you take a bit before the issue of heat and the rest comes into play..you mine w/o the negative effects coming into play....the distribution would have to be huge to pull this off and again you'd have to take a bit of the action on each chip or setup or whatever .....to pull off any profit at least in the short term

now if you drank the kool aid and you feel btc is gonna go to 1k to 10k again and you believe the 'Internet of everything is coming" this seems more doable

but right now ..i can't figure out the 'fuzzy logic' on how the heck you would get enough folk to get this moving and off the ground at the current BTC price level


whatever what I got from the quote above wrong thou I may be on my 'suppositions" .that the quote above is correct and the bitcoin addition to mining above would not effect
the normal operation of the chips in question ..a big if imho

As I said in another 21 related thread, "just add on a little <blah> to your gadget" looks great on a set of Power Point slides at a very high business level. Bring in an engineer, and the hard questions come out, and the actual costs of "adding the <blah>" come out, and it all dissolves real quick. With the rare exceptions of devices that are designed to produce heat as a their primary function, nothing else will stand the marginal cost increase, nor the electrical power cost. Phones, USB hubs, toasters, Cable boxes really make a lousy environment for Bitcoin mining.

I agree ...just from the wording in my previous post on "normal" assuming it means what I think it means ..just enough pop to mine a cell phone at a really really minuscule level and not really effect the cellphone in heat etc or electric use or battery drain...man we are talking really really really puny infinitesimal returns....dust of dust of dust ..sheesh..


assuming that IS possible ...wtf..how are you ever gonna get it into everything at that small a return..even if you took a piece of the action on each chip to get it off the ground..especially at these price levels? again ..do they know something we don't like 5k btc is just around the corner? (I wish!)

I mean such a minuscule drain on a device like a thermocouple on a water heater or some such..hey i can see it ...wasted heat converted to electric for your very very puny return

but an Internet link on such? ..again you have to have the "Internet of everything" HERE BY THE END OF THE WEEK!...almost in play first to get enough economy of scale  to even think about pulling this off imho and at todays price range ..just can't see it

and as to your point.....there is always heat/electric use cell phone or whatever even if you fine tune it very very low...but again doing that again imho you almost have to have a hell of a lot inbedded devices already ..the "Internet of everything" is here already! ..to just get this off the ground!

man just can't see how it is feasable on your point and on my point (then again I'm not too bright at one time i did drink the BFL kool aid ...got a refund but still...best to keep in mind) :)

It's absolute horseshit, period.

I've said it before and will do so again - do the maths.

Just thinking about this a little more. It seems to me just about wherever they target an ASIC, it will always be more efficient and cost effective to construct a specialized mining device using that particular ASIC.

If they produce a "high power, high speed ASIC", then they can't jam it into a cell phone, or anything but a high power device (e.g. some kind of heating "appliance").  If they produce a miniscule power device (and corresponding hash rate), why not construct a miner with a ton of them inside? They can't be hard too cool or to power since they were targeted for some thing else. Wouldn't it be more economical to build circuit boards with a bunch of those ASIC's on each? I just don't see the economy of attaching it to some other unrelated device for the purposes of mining or "Transaction Verification Processing" if you wish to think of it that way.

I am just not seeing any compelling advantage to making Bitcoin mining an adjunct to an "Internet of Thing" device? Is there something besides being "cool"?

+1

Can anyone explain how they made money off IPO with information like these articles?   Do investors not care? Or did they not understand to invest with these guys?

Exactly I don't believe this will happen, just 2 days back I read a guy reporting that he almost fried his Laptop when he tried solo mining and he let it run for 4 hours and it got extremely hot.
 
And if laptops can't take the heat from mining how will phone be able to resist that, I think the phones might blast, if someone tries to do that.

How much does bitcoin have to be worth at what network difficulty for the math to work for, lets say, a .07w/ghs 16nm finfet device ?

Probably what they'll end up doing is getting chips integrated into internet-connected stationary household devices without telling the consumers - or at best, put it in the fine print that nobody reads anyway. Maybe add only a few watts to power dissipation, something most folks would never notice. Keep it passively cooled. So someone buys a new Tivo and gives away 25GH to 21e6. The smart fridge has one, and the TV and DVR both have one (in every room), and the XBox has one, and pretty soon your house is secretly giving 200GH to 21e6. Sure they only make a couple bucks from your house, and you won't really fight it because it increases your electric bill by about $3 a month, but when ten thousand people are all doing that, 21e6 now has a 2PH farm at their disposal with zero maintenance cost. Keeping 75% of the earnings you know about isn't near as profitable as keeping 100% of the earnings you don't.

Sure this sounds like a conspiracy theory, and it very much is. But I don't trust investor-driven profit-driven big businesses (with who knows how many hundreds of millions of dollars already driven in with the expectation of boundless returns) to not screw people over as much as legally possible, and then get laws changed when they run out of loophole room. And trusting that most people who like to jump on fads don't take the time to consider the actual cost.

So making one post as a hero member with a signature campaign makes you more than 10 days of full time mining on a phone?

No thanks, I'll pass.

It really is a genius idea, problem is who would actually integrate these chips into their products? Whats the benefit of a fridge maker to add this chip? "Hey buy our fridge it has a bitcoin miner integrated that will save you $1 a month off your electric bill" ....I think not lol.

Now if 21e6 does some deal where half the bitcoin profits go to the company thats a different story....now fridge company has a "free" 1PH farm and 21e6 does also.

Either way I doubt this would fly with consumers...if people find out companies are making a profit off their  electricity there would be an uproar, even at 3 bucks a month.

I don't know about refrigerators, but a device like a Tivo or an Xbox routinely undergo a "teardown" sometime after introduction. Somebody will buy it and crack it open and detail all the chips and such. I wonder what will happen when they try and explain their list of chips and one of them is 21e6? It won't remain a secret in my opinion for long inside a Tivo or Xbox.

Of course maybe Tivo will include an "economy" setting that turns off the Bitcoin mining application....  :)

In my opinion, the only way smartphone bitcoin mining chip will have any chance is if it will be activated (working) only during phone charging.
Many people charge the phone overnight, so at least 1/3 (8/24) of the day X potential number of devices=still a large number.
say, 20w=100GH for 14-16 nm chip
X1mil phonesX8/24 (charging time)=33PH
x10 mil=330PH
etc

With phones numbering in billions, it would be relatively easy to get to these numbers.
A deal with a single major carrier and manufacturer would be enough (they have Qualcomm on board already)

Unless they integrate hash cores into the processors already built into the things.

Several people will make issue, but how many of the Wal-Mart electronics consumers actually care to do market research on the crap they buy? How many folks will just buy what's cheap and meets their needs (wants, more likely) without caring about the underlying technology or why they're being exploited? Probably "almost everyone", even if it's almost nobody represented on these forums.

People still buy incandescent lighting for an example of how little the average person cares to think about electricity costs when considering their purchases. 

Interesting idea. While I wouldn't be surprised to see an Xbox specific ASIC which could have hash cores added, what about the Tivo? I would expect by now that virtually everything inside a Tivo is now a commodity item, no? What would a Tivo have that requires an ASIC? I would think that a Tivo is all about the software, and it's integration with an upstream host for schedules and stuff. Is there really any obvious place to "hide" Bitcoin hashing cores within a Tivo?

I also then wonder what it would cost 21e6 to get Tivo to integrate their "Bitcoin mining technology"? Tivo would have zero incentive otherwise I would think. This feels a bit like the hardware equivalent of the crapware/bloatware that gets included on every new Dell/HP/Acer computer you buy these days.

I think this would work on space heaters. Need to pack at least three S1 boards in a unit with a wifi. Give the space heater to people free and make it so they have to sign up to unlock the unit and get paid a monthly credit back the more they use it. If you had 3 boards in it then you could have a low, med or high heat by running 1,2 or 3 of the boards.

Then what about a whole home heating system made out of asics?

Too complicated for a result that isn't that impressive.

Edit:

https://i.imgur.com/mp6ZIml.png

Taken from http://imgur.com/a/q9cbL

Zero OpEx because it's all shifted to the consumer, who is seeing at best a fraction of the revenue and footing all of the cost. Count me out, pretty much forever, on any mining device I can't configure the pool for and any mining device which I can't turn off.

Versus receiving... zero now?

I'm suprised they picked a usb charging plug.  I really want to see some ROI math on their equipment.

I'm not expecting ROI on any of those but I could be wrong.

It's the best device after a router. The cell phone thing will be done in Phase 3 so no need to worry about that for now.

Why are you expecting ROI? This is not about ROI. It's about decentralization. Unless I get it wrong. It would cost 35$ extra to get the device? If yes then it's not worth it. But the extra 8$ for a router will be worth it. If that's their expense and nothing for the consumer then it's damn good!

If your chips are not revolutionary performers, how does this lead to decentralisation? Those chips spread across 100,000s of devices in the best case still have to compete against the rest of the network running concentrated data centres of the same chips which were deployed for less and have lower electricity costs. Those centralised data centres are going to be able to run harder, longer and more numerously to those devices. And think about it, if you manage to get this into 100,000 products with a 50GH chip, even that is just 5PH. 5. Bitfury has been building ~20PH facilities from scratch for years. So in the best case these decentralised devices (assuming 100% up time) can compete with 1/4 of a single Bitfury facility, or 1.5% of current network capacity.

While its a noble effort, I'm not sure its a shrewd business decision. That said, maybe they have totally different numbers which paint a different story.


Edit:
The consumer still has to pay for the electricity to mine, and only gets a portion of the revenue in return. IIRC it was suggested 25% to the consumer, 75% to them and locked at the chip level. So, mining would be 4x more difficult to operate at 'break even'. That would lead to non critical devices (USB chargers etc) simply being unplugged when not being used.

For any smart consumer, it would lead to devices not specifically designed to turn electricity into heat for some productive purpose being turned off, or the hashing functions disabled when additional heat is not something you specifically want. Decentralization is great, but a million people spending out of pocket monthly to help "maintain the network" while funneling the resources generated by their efforts into the coffers of a multimillion-dollar corporation is silly. Asking someone else to pay the electric bill on your money-printing press (that prints less money than it costs to run, if not now then within a year or so) and then generously offering to pay you one fourth of the money you printed for them really can't be painted as a good deal to anyone except them and the electric company. I just don't see the numbers in it, especially if the block rewards are hardware-locked to the chip maker. Sure it gets visibility for bitcoin, but all your PR is centered around tricking people into giving you more money - which, to be honest, is actually pretty standard.

Aaaand we're back at square 1 :D. I don't think we'll ever achieve decentralisation, its fundamentally incompatible with economics unless someone is philanthropically burning $10Ms for the benefit of others.

Or not burning $10M for the benefit of himself - just, not spending it at all. Decentralization is easy, but it depends on wealthy entities not buying up the entire market. Which is fundamentally incompatible with human greed. It doesn't require anyone to be particularly generous, just for rich people to not be particularly greedy - very likely negating the attitude which made them rich in the first place.

Someone actually prioritizing decentralization over maximized profits could do pretty much the same thing 21e6 is working toward without claiming all the block rewards, and being honest about educating consumers about the true costs of the things they're buying. Same argument behind selling mining hardware fresh off the line instead of self-mining during the prime months and reselling it when it's running breakeven. It's all a matter of what you think is important - support the network, or raid the network. You can't do both.

My take is this:
There seems to be two models:
1. KnC, Bitfury, Bitmain (later one, probably, although they still sell for now), Spondoolies (later one as well)-deploy large centers, don't sell miners to anyone anymore, either keep bitcoin or sell it into the market, suppressing price.
2. 21 co. You are the product (similar to facebook, google, etc).  Charging iphone 6 costs $0.5/year. Even if this doubles or even quadruples, most people would not care if they get some gimmick like a ringtone. If fact, most people already using their phone for something they did not intend, unless they go in deeper in the settings and turn off various data collecting and ads presenting options. In fact, phone typically lasts 1.5-2 times longer with these battery-draining programs switched off. Nobody really complains about it, other than battery drain.
21co can sell the chip to many manufacturers, further diversifying the network.


As long as 21 co sticks with bitcoin and not make it a blockchain on 21coin, and, hopefully, makes an option for a pool choice, i would be fine with this scenario much more than I would be with scenario #1.
Unfortunately, if there is no massively produced retail miner (Spond dropped out, etc.), I see no other choices, except for a few dedicated enthusiasts, which is also great, but won't work on a massive scale.

If the chips are not revolutionary performers then this will not happen. End of story.

But let's not focus on that. If I know that revolutionary performers will come sooner or later I think we can move on from this subject and discuss how will we manage the fact that 21 inc will suck all the newly created coins.


Not this topic again. A 10W increase in power consumption (which I find it huge for small devices) means ~1$/month. NOBODY cares about that. This is a pointless subject.


If they can get routers that will consume a maximum of 10W per household for bitcoin mining then it's over for number 1.

Unless they make open pool choices, they become number 1. If they don't make open pool choices, they then have to convince everyone to spend that extra $8 initial and $1 per month in exchange for almost exactly nothing in return.

$1 a month might not sound like much, but put another way, who would "subscribe to the bitcoin network" for $12 a year? That doesn't sound like something that can be sold en-mass.

The cell phone mining idea is total nonsense. If they had a 10 GH/s mining chip that ran at 0.25 J/GH, that would be 2.5 watts, enough to drain an iPhone 6 battery (11 Wh) by itself in 4.25 hours. During this time, it would make about 0.00002 BTC, worth about $0.005. In order to not be ludicrous, the mining chips will need to be restricted to devices that are normally plugged in and connected to the internet, like wifi routers.

In their slides they suggest using a "/dev/bitcoin" as a micropayments method. If they sold 1 million of these devices, and each owner made one micropayment per hour (i.e. visited one webpage), that would be 278 transactions per second, or enough to fill up 40 MiB blocks. Given that the current block limit is 1 MiB, I'd say there's an obstacle in their way. Using satoshis as auth tokens would make this even worse.

A 10 GH/s miner currently generates around 00010300 satoshis per day. If a person was using their "/dev/bitcoin" once a day, and if 21 Inc received 0% of their mining revenue, they would be able to make one transaction per day. At that transaction rate, the 0.1 mBTC transaction fee would end up costing 97% of their total daily revenue. Even if you received your money once a day but only spent it once a month, you would still end up spending a high proportion in transaction fees. Since your transaction would have a large number of inputs, it will end up being several kiB in size, and will have a correspondingly large required fee. Using micropayment channels helps this problem, but if you use that, then you're no longer getting freshly mined satoshis, and you might as well not be mining at all. If you use a system like Eligius, where the pool's debt to you is paid through the coinbase transaction once every few days (or maybe weeks?), it might sorta work a little.

Embedding a miner in every device would increase centralization, since there's no way those devices would be useful without mining into 21's specially configured pool. Moreover, this pool would need a large datacenter backing it in order to get acceptably low variance.

21 Inc's business plan is brilliant.

A common problem with the modern electronics economy is that most transactions are made for a product. Customers pay once, and they pay before they know how useful the product is actually going to be to them. This means that they systematically overpay for crappy products and underpay for solid, useful products with long useful lifetimes. Many companies have tried to deal with this problem by switching over to a subscription-based model instead, but consumers often resist that idea because they don't like it when someone else owns and controls the things they use and rely on. 21's pitch is a way to allow subscription-type revenue streams while still offering consumers complete ownership of their device.

VCs understand this pitch. They see how huge this could be if it works. However, this pitch is not 21's business plan.

21's business plan is to engineer a convincing pitch, which they then present to VCs in order to get a ton of funding, which in turn they then use to design and fab their own ASIC using the world's best microprocessor fabs (Intel's), and then build multi-MW datacenters which they use to self-mine. The VCs and shareholders would not have ordinarily invested in mining, but when they see revenue coming in, they won't think too much about where it's coming from.

So far, it looks like they've been succeeding.

The donors, sorry 'investors' will go for any pitch that they think will make them money as quickly as possible. This was not an Initial Public Offering but there's been plenty of those in the past 50 years where totally worthless businesses get pumped up by their merchant banker partners and go public. There's a huge anticipation (and demand) for the public offering and so the stock will launch at some absurd price, quickly peak then fall back leaving the mugs holding the baby. Some companies survive (lastminute.com in the UK a prime example of this nonsense - annual sales of £250k, market valuation at launch? £800 MILLION) purely and simply because they've been given so much money by idiots.

So don't confuse a good business idea with a ploy to extract as much money as possible from the gullible. This is just another pump and dump scheme, no matter what their publicity says.

On a closing note, if you manufactured a modem, fridge or set top box would you really chance your tech support budget going up by a factor of 100 due to all the problems those pesky little chips will cause your customers? (I'm not making any money ...etc etc)

But buying $12/year of lottery tickets ? No problem. There are ways to structure compensation to the consumer that can make this work, even in the face of marginal mining economics.

I think the only way this would work would be if implemented in cheap electronics and letting the customers in the dark about the additional power draw. I mean if they claim it will use X watt then they might not have to tell the customer that they will draw that all the time. So customers think they buy cheap while in fact they buy for way more.

Seeing that business model... i cant imagine that enough investors believed this. Maybe they were noobs and never heard of difficulty. Miners work for the first month, second a little bit and thats it. If a miner doesnt sell in the first month then its hard to get a profit at all. So i dont see an incentive for any hardware producer and i cant imagine that this will work.

Could they have faked the donation height? Did they promise world domination over bitcoin? You know, these devices have to be run through a pool 21 controls, otherwise they are useless.

This makes no sense at all. And i doubt they are magicians that found a way nobody else thought about.

I don't think they are magicians, but the idea certainly has merit.  I don't buy the "miner in a phone" argument, simply because of the detrimental effect of constant power draw on your battery.  However, for always-on devices like your cable box, your refrigerator, etc, embedding a chip or two is not a stretch.  In the IoT world, you've got virtually every device connected and talking.  Let's say a chip is produced that can mine at 10GH/s for 3W.  That's not too far a stretch from where we are now.  Throw 10 of those chips in your cable box and it's only throwing off an extra 30W of heat.  At current difficulty, that's $7.35 a month, and at $0.10 per kWh, it'll cost you an extra $2.19 a month in electricity.

Obviously my calculations are based on the BTC world as it exists today.  You suddenly throw chips into every device and the network difficulty is going to go up.  Unless the price of BTC goes up with it, which historically hasn't happened, those embedded chips are going to cost you more to run than they will make.  Add into this the upcoming reward halving next year and suddenly things are even more ugly.

So... while I do think the idea of embedded chips in the IoT world has merit, the practical application of such is a far-fetched pipe dream.

it might work on the phone if it will mine ONLY during charging, which is ~7-8hr/24 hr for many people.
Of course, router is the most obvious candidate.

As I've read things, this "Mining USB Charging Hub" is supposed to be somewhere now, or at least prototypes right? Or is the Q1 mean Q1 of 2016? I don't know how many of you have a "Charging Hub", but who's going to go to the trouble an Ethernet cable to that surprising RJ45 jack on the side, that's not present on any other "Charging Hub"? If it has a WiFi built-in, unless and until I "configure" it, it will have to hope that one of my neighbors in range has an unsecured WiFi network to sponge off of.

Don't you think even the VC guys will want to see the first "product" they are supposed to produce?

I actually think that jtoomim's analysis is right on, and that the "Internet of Things" is just a sideshow to secure funding.

it might be, considering that we were happy to use 0.5-0.7w/GH equipment from Spond and bitmain while they (21 inc) were flying on 0.22w/Gh
I now start to think that a significant portion of "other" in pools was 21 inc

In addition, accumulating and then selling a large number of bitcoins without creating a large market is meaningless by itself or even damaging as KnC and Bitfury has shown during 2014-early 2015.
The advantage of 21inc approach is that many people will have some bitcoin that they might/will spend, creating a much bigger market (enriching 21 inc investors in the meanwhile, of course, but this is fine).

I highlighted a different part of jtoomim's message, which I think is the most likely scenario.

If on the other hand, you believe the "Massive Internet of Things" plan, I still don't see how it helps Bitcoin acceptance. The amount of Bitcoins which most folks would garner from their 20GH that they paid dearly for in electricity costs, will be difficult to exchange (I need a wallet?), and will yield only a pittance in terms of fiat they can actually spend.  Does a million folks, each with .1 BTC, really move the needle on Bitcoin acceptance?

as i mentioned, what you highlighted was already done by KnC and bitfury without ANY positive influence on bitcoin acceptance or use. This is not a winning strategy, clearly. You can't use something that you don't readily have. I don't know about a million, but 10-100 million will certainly move the needle. We have ~ a billion of android phones being sold/year and ~250 mil of Apple's

I believe the fine print stated that 75% of btc mined would go back to 21 inc.  Correct me if I'm wrong.

That right there makes the whole idea pretty much a disaster for any consumer, especially ones capable of simple math.

average iphone uses $0.5/year of electricity for charging. Let's assume that, instead, it will use four times as much or $2/year.
So, you get 50c electricity use worth of mined bitcoin (could be ~$2) , some gimmick like a ringtone and 21inc gets $1.5 worth of your electricity or $6 worth of bitcoin.
You broke even, got bitcoin to play with, got a ringtone.
It will be acceptable to many, assuming that it is all spelled out properly when you sign a contract.
as far as basic math skills-those people are clearly in minority, and in addition, they also don't seem to care about supporting all those ad systems on the phone, which pretty much doubles it's power use.

The point is: centralized mining system of bitfury, KnC, Bitmain, upcoming Spondoolies did not work to increase bitcoin acceptance and cannot possibly work to achieve this in the future. The independent mining could work if there are energy efficient chips/machines for it that are/will be available to miners and are on par with the best of them.

As it stands, I was saddened to find out that we were basically losing money or barely breaking even with 0.5-0.7w/Gh miners during 2014-2015 while 21 inc were mining at 0.22w/GH

That's great, for the phone where you get a ringtone out of it. What about everything else? What gimmick do they feed you to double the power consumption on your new wireless router?

I agree there needs to be a change toward decentralization and mass adoption. That's good for everyone. But I don't see the practicality in charging people extra money to integrate miners into their devices and then pocket almost all of the returns. That's not actually decentralizing, it's just a new centralized model. I mean sure it distributes the hashpower, but one entity still controls the majority of the coins generated. Without user-configurable pools and payouts, they'd be supporting the economy more effectively by just buying that many dollars worth of existing coins instead of that many dollars worth of added mining chip and electricity cost.

I guess i am mostly agreeing anyway, but essentially, their model is similar with facebook, etc.
i don't think that they will ask you to pay extra (those $35 for USB , then $8 for router, then cents for cell phone chip-it is their cost).
Essentially, they want to entice you to use their services at essentially zero cost to you.
facebook basically entices you to look at ads. You get social interations, they get money from ads (and they should actually share some, but they don't-at least not yet)
In fact, some company superior to FB/goog/yahoo might want to share some ad $$ with consumers in the future through 21 inc bitcoin chip.

They are not advertising it as that. They are betting on the incentive to get rid of ads or buying extra mobile data for their phones and the micropayments. Pay attention please.


Do you really think that they plan to sell routers that have double power requirements? I think that you are very wrong. It will be hard to design cases for those routers. They will want to keep this simple so they will add just a few extra W to them.

You might well be correct but they really don't know how wrong things will turn out for them if they start believing that.

Do they think all the companies that pioneered mining chips are a bunch of idiots?

What's the typical power draw for a consumer-grade router? A couple watts? Probably 5-10 I'd guess, which probably means one good chip added to that could about double it. What's the power cost vs expected yield (or 25% of expected yield) for a 5W chip getting say 50GH over a three-year lifetime?

Are they advertising a service based around microtransactions? How do they propose to solve the problem, as mentioned earlier, of microtransactions overwhelming the protocol?

What service are they offering that is inherently benefited by integrating a hashing chip that pays the customer a fraction of its yield?

Novak and I both really don't see what they're doing that's actually any good, which means we both don't like it. Which, statistically, means it's going to be highly profitable for them.

My cynical response: None of the above questions were on the Power Point slides shown the Venture Capital guys. If you think about it, both ASICMiner and Bitmain could have pursued the same approach. The BE100 was no more than 2-3 watts, and even the BM1380 couldn't  have been terrible since it was the basis for the U1/U2 USB miner wasn't it?

What would you be thinking now if Linksys had decided to integrate a BE100 into every one of their routers in the last 2 years? I think what's most innovative here is that 21e6 is getting their money from guys that have deep pockets, rather than a thousand pre-orders from customers (turned creditors/investors).

Correct - and power used isn't that high if you plot it against people's yearly power use, expressed in dollars, etc.  The Block Erupter USB and AntMiner U1 / U2 do get rather toasty, though... add that to a router that's already putting out a fair bit of heat (there's a reason for the giant vent holes in the top that make it easy for conductive things to fall into), and now your router needs active cooling ;)

Either running them slower or using a more efficient chip would work.  But, as I've mentioned elsewhere (and others have said as well), they need to come up with a pretty good pitch to convince manufacturers to integrate and/or license their chip/tech... consumers aren't really the issue (short of some popular website raising a stink about Device X 'secretly' mining Bitcoins without actually digging into the numbers).

WSJ basically reiterates both pro- and con-arguments, suggesting that it just may be a paradigm shift (could also fizzle spectacularly).
amazon worked, but webvan didn't despite billions invested with star investors.

http://blogs.wsj.com/moneybeat/2015/05/20/a-startups-radical-bet-on-bitcoin-mining-hinges-on-paradigm-shift-horizons/

Taken from http://www.coindesk.com/21-intel-bitcoin-mining-strategy/

They are quoting 0.22 J/GH at the ASIC chip level, not total system draw at the wall. Competitor ASICS are fairly close, e.g. Spondoolies-Tech RockerBox at 0.35 J/GH (as featured in SP3X and SP20, see https://bitcointalk.org/index.php?topic=521520.msg6519857).

This idea won't work. With current difficulty and technology, you wouldn't make anything worth while.

Public relations ploy

Waste of space.

They're not being offered $12/year of lottery tickets, they're being offered $12/year for $3 of bitcoin and a warm fuzzy feeling.

And if Intel really did do those chips then they did a pretty shit job of it.

When you follow the chain of Wall Street Journal article stuff, you'll also find that 21 highlights the fact that Larry Summers has joined it's Board of Directors. I am pretty sure that Summers was instrumental in getting many of the previous banking regulations dismantled in the late 1990's in the USA. Those of you that have lived through 2007-2014 in the USA can decide for yourself how beneficial his choices were.

This doesn't instill confidence in me, but it may well in others.

A new slogan for a router manufacturer:

"Free of Bitcoin"  

After all, everybody know that Bitcoin is "mostly for Terrorists and Drug sales" based on various news articles that aren't too in depth in nature.  <Huge smiley here>

Unless they implement a lottery style payout strategy where a lucky customer every week/month gets a disproportionate payout.

Do y'all think Andreessen/Horowitz, Intel and Qualcomm are a bunch of idiots ?

They central question here is what do they know that we don't.

At this point, I haven't heard any arguments that dissuade me from believing that 21's plans will enable widespread adoption of bitcoin. Whether that adoption results in BTC price improvement remains an open question.

(how to get away with theft)

Funny because I came to the opposite conclusion. I haven't seen any arguments that suggest 21 inc's plans WILL enable widespread adoption of bitcoin.

In fact I can only see this causing people to hate bitcoiners more than they already do because it only reinforces the idea that everything bitcoin related is some sort of get rich quick scheme.

That seems to be the trend around here.

What's kind of interesting is that there seems to be an underlying theory, that widespread mining will enable widespread adoption of Bitcoin. I personally have no idea what will make Bitcoin attractive as a currency, but it's not obvious that another million folks with tiny fractions of a Bitcoin will make it "popular".

Most everyone on these thread, myself included, are very focused on the production of Bitcoins. As to what makes it popular or mainstream is still a complete mystery to me (and I expect many others).

My vote is utility. Ease of transactability hopefully will get noticed, and that ease would increase the number of outlets willing to exchange bitcoins for goods and services. Volatility of the market right now is impeding that willingness, but hopefully increasing the proportion of the market based around goods and services, reducing the proportion based on speculation and margin trading, will help that out.

When all costs are considered, electricity from an on-board battery is a lot more expensive than electricity from a wall outlet, and absurdly more valuable for the owner of the device.  Therefore, placing miners on mobile devices like smarthphones, tablets, or laptops makes no economic sense.

Moreover, I cannot imagine any advantage of phsically attaching a mining device to some other device with a different function, except water or space heating.   There is a thing called "internet" that allows a device to send information to another device anywhere in the world; and a system called "bitcoin" that is supposed to allow bitcoins to be sent through the internet, even if  the two parties are not connected to the internet at the same time.

So, instead of having 10 mining chips scattered around, firmly attached to my devices, I could have one mining rig with 10 chips sitting anywhere it is more convenient (for example, in my water heater, or in the attic of my summer home in Iceland), sending bitcoins to other devices if, where, and when needed.  The centralized rig would certainly be more efficient, could work at steady pace 24/7, use optimized power supply -- and would not burden the other devices with power load, extra heating, board space, etc..  Physically attaching a mining chip to a router makes as much practical and economic sense as attaching a water filter to a toaster, or a lawn mower to a car.

I cannot make sense either of the fuzzy idea that, with miner chips, devices would be able to get revenue to do micropayments for the services they use, or to generate satoshis for "Wide World Ledger" applications like colored coins, authentication, timesamping, etc.  It will be impossible to exactly match the bitcoins produced by a device to its needs: if the device does not run out of bitcoins, it will generate a surplus of them.  My water heater could generate a lot more bitcoins than my laptop, but will hardly need them; whereas my laptop wil probably will need them the most.

So, if my devices had embedded miners, they would have to pool their bitcoin streams and share them on the basis of need; and possibly topped up with purchased bitcins.   Which, again, is better done with a centralized mining rig than with independent miners.  (By the way, in most higher organisms, from corporations to computers to humans, evolution has found it better to use specialized units for the generation of "revenue" (money or energy), separate from units devoted to other functions that spend from that "revenue".)

Finally, adding a mining chip to a battery charger makes it much more complicated, functionally.  Instead of just taking AC 120 V and putting out DC 6 V, a "miner-enhanced" charger will have to communicate with 21.co servers, manage a wallet, interact with other devices, authenticate itself, etc..  Even if most of that complexity is hidden from the owner, enough of it will be exposed to require some of his attention and time.  Which are much more expensive than the electricity or the chip itself...

While a mobile device is being charged the electricity cost is equivalent to wall outlet costs. Many users of mobile devices like laptops use them while they are connected to an outlet. The mac book pro I am writing this reply on now is a good example.


I can easily imagine Qualcomm including 21 inc's proprietary IP in new chip designs.


This is obviously an adoption play. No one is likely to come up with a workable business plan to place dedicated miners each containing 10 chips in the attics of 10 million people, but it is easy to conceive of 100 million routers/USB hubs/phones/devices each containing a chip with 21 inc IP included on die at near zero incremental cost.


When there are satoshi to be spent, people will figure out how to spend them.


There is already an enormous amount of complexity hidden in the simplest of everyday devices, and orders of magnitude more in modern mobile devices. This is no challenge.

If I got it right from the picture that I've posted the plan is to directly integrate hashing cores in the chips inside the phone. Considering their partnership with Qualcomm I'm thinking that they can put some hashing cores directly inside the Qualcomm 3G chip so that everything that chip is activated and the phone has internet connection it will also do some hashes. They are not idiots and they will weight the power consumption to be suited to cell phone usage otherwise they are killing their own business. I don't know why everyone is thinking that they will put gazzilions of GH/s with huge power consumption? That would be very retard and nobody would use their devices.

exactly

That might justify embedding the chip in the charger then; not in the battery-powered device itself. (But then, why not a separate trinket that is plugged to the wall outlet too, like a charger, and can mine 24/7 while the user takes the charger to work?)


They could do it, but why?  What is the advantage of physically attaching two chips (or subsystems in a chip) that do totally unrelated functions, neither one needing the other to function?  For authentication purposes and accessing a device-specific wallet, all that the device needs would be an hardcoded private/public key pair and a protected signing curcuit, smatcard-style.


Those chips are rather large, I gather.  Increasing the area of a chip reduces the yield and increases cost.  Increasing the power drain requires heftier power sources.  It cannot possibly be "zero incremental cost".

If the mining chips will be profitable for the consumers, the mining rig would be more so -- a "money making machine".  They should sell like beer.

So we must assume that, as many are saying, the chips will be a loss for the customer; basically a way for 21.co to mine at the customers' expense.  (Somewhere they say that the convenience of on-site generation makes the mined bitcoins more valuable than market-bought ones.  I understand this note as an admission that their chip cannot mine at a profit.)

If that is the case, then bakrupcty is the least they deserve.  Someone who steals a penny each from 100 million victims is no less a thief than someone who steals a million dollars from one.


The point is that the satoshis will not be generated where they are needed: some devices will have a surplus, some will not get enough.  "Error 407 -- cannot fetch that webpage because your router ran out of satoshis.  Try asking the fridge if it can spare some of its own."  If the devices are going to pool their mined coins, then, again, why should the chips be attached and assigned to particular devices?


It is not a design challenge, but a practical disadvantage.  The user will be persented with a more complicated device.

We do not know the terms of that partnership.  21.co may use Qualcomm parts and/or expertise, rather than the other way around.  Doesn't Qualcomm have a project for self-configuring public wifi routers?  That may require some automatic micropayment system, so their interest in 21.co may be about that, rather than mining per se.

Phone chargers sell for ~$2 on Aliexpress so I'd guess they are made for ~$1. No sane company is going to add ~$20 worth of components and an $8 chip.

How can they possibly remain competitive while paying double the $/gh and double the $/kwh?

This sort of reminds me of when utorrent decided to include a hidden CPU miner in their software so they could earn dollars per day while costing their users thousands of dollars in electricity.

No, I think they (Andreesen/Horowitz) are greedy predators who don't give a shit about helping good tech companies get established.

What they do know is that the public are suckers and will fall for a hyped up tech project in a future IPO.

Anyone with a decent amount of technical knowledge and a basic grasp of maths can see right through this crap. As for Intel, they most certainly haven't pinned their colours to this mast, have they?

Your concerns seem to rest on an assessment of the economics of mining and an implicit assertion that it is only by stealing power and/or creating inconvenience for the customer that 'micro' mining could be profitable.

Until we can actually assess the adoption of micro mining, the effect of this adoption on the network and bitcoin valuation, and understand what kind of added value 21 inc can provide to the consumer I don't think this question can be settled.

After all, why would anyone pay more for a dedicated miner than it could actually mine during its useful lifetime ? ~LOL~

The claim that the intent is to steal power from the consumers is not mine; it is being made by several people in the forums.  I still haven't seen confirmed basic data about the chip: power consumption and hashes/sec.

Someone on reddit who seems familiar with chip design claims that the 21.co chip is 500 mm^2 in area (~22 x 22 mm), which means it cannot be integrated in CPUs etc.

Even the "optimism" and "entertainment" factors are negated when you have automated and probably unconfigurable hardware ("boring") that pays you only a quarter of its meager earnings ("depressing").

I've thought this for a while now. However, I focused on devices that are constantly plugged in, and connected to the internet (obv). Any sort of firewall/router/switch/AP could have a 10W chip in them, and no one would ever know. Well, some people would find out, but most consumers wouldn't know the difference.

I still think that most of us here are focusing on a less relevant thing (using your own electricity).
Right now bitcoin is mired in 100K transactions a day, which is a miniscule number.
If properly implemented, can 21 inc approach dramatically increase bitcoin market and reach many millions?
I think that it can, and the alternative of 4 hardware makers mining, then dumping coin is nothing but a disaster as we have seen in the last 15-18 mo.

In fact, if 21 inc is already in possession of a significant % of bitcoin (and they might be since they were mining the last two years), and once millions of devices are distributed, they can run a promo whereas they distribute, say, 1-5% (or even more) of their stash in one go, like a super-faucet, giving few million people $1-5 in btc, thereby endowing a large market. With a proper ad campaign it would be an impressive feat.

Any thoughts on how long it will take to see which "vision" is the closest to reality? Will it take longer than 18 months to know if the VC guys were "super brilliant" or just "suckered in"? I can't believe it will take even 24 months to know.

However, if those transactions will use freshly mined bitcoins, they will not generate any new demand on the market.  Eventually, those mined bitcoins will find the way to the markets, just as if tehy had been mined in bulk.  So those chips will not change the supply or demand.

Moreover, those additional millions of transactions will involve very small amounts and minimal fees.  One big dark cloud in the bitcoin horizon is the question of how the network will be supported once the block rewards become insufficient.  The hope was that commercial transactions would increase to the point that (a) the price would increase exponentially, thus preserving the dollar value of the block rewards, and/or (b) the transaction fees would become significant and compensate for the reduction of the block rewards.  Those millions of micropayments and tiny miner payouts from the 21.co chips will not help either (a) or (b).


They must have mined a lot of bitcoins; but have they kept them, or have they sold them already?  They must have sold some of them to pay their bills.  If they kept the rest as bitcoins, they must be in very bad financial shape, like other entities that did so (such as the Bitcoin Foundation).

Who said that Qualcomm is interested in the mining? This is not only about the mining. And yes, in order to integrate and use the micropayment system Qualcomm will put hashing cores into their chips and will try to get people used with the micropayment system so they can use it.


You are way off the track. Their plan is to use 35$ chips for USB charging hubs which are more expensive than regular phone chargers. The 8$ chip will be used in routers, gaming consoles etc. They will remain competitive by using the approach of many consumers paying the price who will not care about the double $/gh or the double $/kwh because the amounts are very small for them. We are talking about a few dollars, not about thousands.

The difference from utorrent is that the consumers will know while those idiots put it hidden.


If several people claim one thing it doesn't automatically makes it correct! I find that claim to be very stupid. They will not steal the power. The consumers will know about this and it will be done with their consent while they will receive something back. It's like saying that Facebook is stealing our privacy. Yeah right, but we tolerate it and we like it. So that's why I think that this is a stupid claim. There are far more important things to worry about than this stupid steal of power of the stupid ROI from the mining.


They will know! It's very easy to monitor the traffic and to see what is going on especially if we are talking about routers. I say it will be done with consent.


When you get investments "far north" of 116M$ I am sure that you don't need to sell bitcoins to pay for the power. Especially if your plan is to boost bitcoin. 

^^^^nicely put, and I am very much in agreement.

Qualcomm will never do this unless they want to destroy their name brand in the name of a retarded experiment where their users can earn fractions of a penny over the lifetime of their several hundred dollar devices.


That's not how I understand it. According to the slides here: http://imgur.com/a/q9cbL it looks like the $35 includes a: $10 controller, $5 wifi connector, $5 hardware wallet, $5 case, $2 charger, $8 chip. (numbers obviously made up but you get the point) It doesn't say the $35 is a single chip unlike the $8.

The $/gh is not important for the customer, but 21 inc. If 21 inc can breaks even with double the $/gh, then their competitors have doubled their money by that point. (assuming they have equivalent chips)

The w/gh is important to 21 inc but only if their plan is not to steal electricity from ignorant users. If they intend on giving their users at least enough btc to cover electricity costs then they are essentially just paying residential rates for electricity while their competitors are paying industrial rates.

I think Jtoomim is right when he said this isn't their real business plan. This is just their plan to suck in the VC money from people who can't/won't do the math so they can produce Intel 14nm chips to put in a massive 20MW datacenter.

This plan to increase btc adoption through mass advertising/giveaways sounds a lot like something Josh Garza would come up with.

Here's my idea to increase adoption: what about creating services/features for bitcoin that people actually want to use?

what people? 10K miners?
internet: create new services, but people can use "old" money(credit cards)
Bitcoin: create new services, but people can only use "new" money (bitcoin). solution: give most people a direct opportunity to get bitcoin

What's wrong with USD? Why can't we have both Bitcoin AND USD?

sorry, but it does not compute because if they accumulated all that bitcoin, but there is NO market (sellers with no buyers) and bitcoin is at $20, then they just lost all of their investment.

1. you cannot transmit actual dollar over the internet.
2. you can program bitcoin, but not a dollar

you can use USD to much of other things, of course, hence there are many tens if not hundred of trillions worth of $$ and only $3 bil worth of bitcoin.

So your goal is to have Bitcoin take over a currency that existed since the beginning of time? I don't necessarily disagree with what you said, but maybe you'd like to rethink what you said. We have a long time before our main currency is digital.

read my post below to see what Reid Hoffman, CEO of LinkedIn, a company that might have helped you to get a job, or will help to get a job in the future, said:
https://bitcointalk.org/index.php?topic=1067631.0
direct link
http://www.wired.co.uk/magazine/archive/2015/06/features/bitcoin-reid-hoffman/viewall

Qualcomm has absolutely nothing to lose. Bitcoin mining is an embarrassingly parallel job and it's very easy to add some hashing cores to any existing chip with no added cost to the manufacturer (except the design cost) or to the customer. The hundred dollar devices aren't hundred dollar devices because of the added bitcoin mining functionality. It's their normal cost. And I'm assuming you are referring to the gaming consoles because the routers or the printers aren't that expensive. The people buying those devices will not care about how much will the device earn in its lifetime. This was repeated for several times in this topic.



Well you got me here. I studied the slides again and I see no mention of a kit that has a controller, wifi connector, hardware wallet and so on. Please show me or explain me how did you got to that break-down.

Also the slides show those costs as being CapEx so these are the costs that 21inc has. We don't know yet if they plan to share that with Qualcomm or any of their partners or if it will be transferred to the customers either fully or partially.


You got it wrong again :) We both know how big is the bitcoin mining market or at least have some idea. We know the estimate of how many players are, how much money do they have and how much are the willing to invest/spend at these prices. If you take them and put them in direct conflict of interests with the masses it's clear that the masses will win. If only 10% of s1gs3gv's prediction will materialize then those that you are talking about have no chance. His prediction is ".05w/ghs. So, ten watts would be 200ghs per meter and 250 million electricity meters would be get you, umm … 50 ehs (exa-hashes/second)". Let's say we have only 25 million households for a whooping 5 EH/s. There is no direct competitor for those hashrates. Right now we are mining at 50Ph/s and we all know the hassle to get to this point. Do you think big mines can expand that much? I don't think so because it will be very hard to gather all the money and to setup the power requirements while having this decentralized mining power is very easy to setup and to maintain.

Big mines will hash only for companies that have hashing power needs for their services.

As for their plan to be a lie, well everything is possible. It can be, but judging by the names involved into this project I would like to think that they aren't that stupid to not be able to do the math. They got too far and too big by having damn good math skills, but yes everything is possible in bitcoinland.


I see this as being a different type of advertising/giveaways. And they are creating services/features for bitcoin and they plan to make the masses use them. Their plan is to allow customers to remove ads or to add mobile data to their cell phones with their mines satoshis. They haven't specified if this will be denominated in fiat or if it will be some sort of token based economy like give me 10 satoshis and you have no ads for 1 day which would be totally awesome and groundbreaking. It's not much, but it is a start and it's the most than anyone has ever tried until now.

RoadStress gets it.

Apologies in advance if this is a duplicate post, but it is worth a listen

https://soundcloud.com/elux-1/21-inc-embedded-engineer-on-whaleclub-teamspeak

Parts of this are kinda 'out there', but the idea of creating new services using bitcoin generated by micromining is central to the talk.

You're right, Qualcomm has absolutely nothing to lose.*

*Besides millions of dollars, months of wasted time, and their reputation


How could a "usb charging hub" miner work without all of those components?

What else could the $35 capex mean for the USB charger?


Pseudo-economics at it's finest.

You've completely ignored the main point which is that there will never be a scenario where it makes sense to double your capex and opex without increasing revenue.

Saying "well if they sold 10 billion toasters using chips that use 0.001 w/gh they would have 100 zetahash" doesn't make their plan any more economically viable.


5 EH/s at 0.05 w/gh is 250 MW. KNC had plans to build a 100 MW datacenter and Bitfury built a 20 MW datacenter from scratch and had running within weeks.

Do you think 21 inc could install millions of miners in electricity meters/usb hubs/xboxes within a few weeks? I don't.

Do they really have to though? If they can talk other people into paying for the chips, and other people pay for the electric, does it really matter what they spent to put the chips in there? All they have to do is get reimbursed on the chip cost (by selling the product with a slight markup, easy to do when you can capitalize on trends) and then sit back and watch while every customer sends them free bitcoins. A 50GH miner next year won't be bringing in near as much as a 50GH miner today, but if it's still running in a year (on someone else's dime) and their costs on it are breakeven just by selling it, diminishing profits from day one are still profits from day one.

I must live in the wrong state (Minnesota) or the wrong country (USA). My electric company is doing numerous things to REDUCE power consumption, not add 10W per meter. They have so many other pressing matters to deal with (e.g. pollution, regulation distribution infrastructure, future plant builds), that adding on a "Bitcoin Meter" will look silly to them. You won't be able to dazzle them with Power Point slides once they figure out the actual costs involved and the impact to their operation. This is a complete non-starter for my electric company. Maybe your electric company is different.

The current focus on the economic viability of mining and whether 21 inc's plans make sense in this context is the kind of analysis i'd expect to see from people like us who have mined thru this early period of bitcoin adoption, and is a reasonable contribution to the discussion.

However, that isn't the whole picture and we don't have all the data. We need more info from 21 inc. How will they add value to make micro mining attractive to the retail customer ? What is the likely impact on network difficulty ? What is the likely impact on bitcoin pricing ?

Personally, I'd conjecture that at some point in the not too distant future bitcoin mining in any way, shape or form is unlikely to be profitable (as measured by the fiat value of the coin produced) and maintenance of the network will become an obligation of the state for the sake of 'the public good' and will likely be subsidized by taxes or fees on our utility bills similar to those which already exist for different reasons.

Therefore I view the existence of widely distributed micro mining capability as a positive and necessary development and I'd be willing to cover the energy cost of a 10 watt 200 ghs miner in my router or other device out of pocket, as long as I could choose the pools it mined on.

If we reach that point I think I'd dump 99-100% of my bitcoin holdings because it would be clear that bitcoin is a failure. (Or in need of some drastic core changes like switching to POS)

However I don't think that will ever happen because there's never been a point in bitcoin mining history where mining wasn't profitable for the most cost efficient operations. There's just no reason to keep adding hashrate once the mining revenues are less than operating expenses.

The times they are a changing jimmothy !

As the fiat value of bitcoin converges on the cost of production profitability will trend to zero and people who might consider mining will find more profitable use for their assets. Additionally, as block rewards halve and halve, its unlikely that the transaction fees will cover mining costs. Finally, a successful mass deployment by 21 inc. of micro mining will destroy the profitability of dedicated large scale mining operations virtually overnight because difficulty will go ballistic.

What I've always heard described was that Bitcoin "Transaction Processing" (aka Mining) would subsist on the "Transaction fees" contained within blocks. I never really believed that could possibly be true, but I can't argue it effectively one way or another until we actually "get there" in time.

If your expectation is actually correct, then Bitcoin will just have to evaporate. Given Bitcoin's vaunted "decentralized no government control" then the idea of a "tax to support" the network is utterly silly.

I noticed that you described the demise of "large scale mining operations". Why the "large scale" qualifier? Is there something about "small scale" that makes Bitcoin more feasible? Or is it your expectation that it will all be supported by this small electricity charge paid by folks that buy 21Inc based gadgets? Is that the "tax"?

I don't believe it either. You are right in that it remains to be seen.

A tax or subsidy does not imply control. To control micro-mining you need to limit freedom of choice wrt which pools are used.

I use the term 'large scale' because i suspect in jimmothy's example the large scale operations are the most efficient and therefore likely to be the 'last man standing' in the mining world, pre micro mining. 21 inc or another company will find a way to add value to micro-mining such that the retail user won't mind the small increase in operational costs of the devices so yes that might be one way in which the network is subsidized.

But I think if bitcoin actually succeeds we'll see 'equal access' provisions enacted similar to those for phone, electricity etc and the subsidy will more likely, or additionally, take the form of actual small recurring charges on a utility bill, perhaps payable in satoshi :)

And the block chain and network will become effectively a public utility just like electricity, water and gas and provide equal access to the financial system for the world community.

So wrap your heads around that.

They really aren't. Mining has shifted from home miners to more cost efficient medium/large scale operations over a year ago. Most people saw this coming but it seems a few are still latching on to the dream of having a miner in every home.


I don't think you fully grasp economics or game theory.

1st of all, transaction fees are already 0.5% of the block reward. As time goes on and bitcoin grows, so will the sum of transaction fees. (I expect the value of transaction fees in 10 years to be far greater than the value of block rewards today)

2nd, there will never be a situation where EVERYONE is mining at a loss. If bitcoin is unprofitable for everyone, it will just drain money from the mining companies until one or more of them drop out, which will in turn decrease the difficulty and make it profitable once again for the most cost efficient operations.


We've already passed the home mining stage. Rebranding home mining as "micro mining" doesn't suddenly make it viable again.


Instead of asserting this as fact, how about explaining why? You haven't really provided any arguments as to why this will work other than that it's technically possible. Just because something can be done, doesn't mean it makes sense to do it.

Outside of bitcoinland, nobody cares about earning 10 cents worth of internet money which they can spend to block 5 ads. They will however care about their appliances wasting $20 worth of electricity per year.


Can I try whatever you're smoking? Must be some good shit.

I am sure that every big company like Qualcomm has various internal projects that will never bring any benefit to the company, but at least they have tried. Human evolution is based on trial and error so I don't see anything wrong with trying new stuff. They are the best ones to do it because they can afford the loss of the implied resources.


Well I don't see wi-fi as being mandatory and also a hardware wallet in every usb charging device would be a waste of money. I don't know what tthe $35 capex means. We'll have to see.


From plans to actually doing it there is a big road. Also if you can build a 20MW datacenter from scratch in weeks, it doesn't mean you can do it the same with 100MW. You also need to fill it and it must make economical sense to do it. KnC may had plans when the market was better for doing this. Building it now wouldn't make any sense, but deploying hashrate in millions of households makes much more economical sense.


Here you went too far with the thinking :) The state is unable to provide much more important services like healthcare and retirement funds. This will never happen.


Mining must be decentralized with having miners in every home, otherwise we will be in a constant fear of an attack. If one party can afford cost efficient medium/large scale operations then it means that some other malicious party can also do it and that's obviously a bad thing. If mining is so decentralized that we have a miner in every household then no malicious party can join this. If KnC (a company that exists since 2013) can afford a 100MW datacenter then I am sure that Goldman Sachs can easily deploy 10x 100MW datacenters if they really wanted to do damage.


Wrong! There can be a situation where everyone or most of them can mine at a loss. They can mine at a loss as long as they can get the money from other various services that derive from mining. It's like paying for Internet. Nobody has a direct revenue from paying their internet subscription, but they can generate money from various services that are possible with the help of the Internet.


I am sorry, but nobody cares about an added yearly cost of 20$. Maybe some people in Africa will care, but other than that nobody cares. Also $20/year seems a pretty big amount. My view is that this cost will be lower than 20$/year.

So what happens if the probably fee-free microtransactions from every device in every household flood the network with garbage data and never get processed? Or do get processed, and flood every node's storage space and probably require a protocol change to larger block sizes to keep the list of pending transactions from being weeks or months long?

We don't know yet how will the devices manage the mined satoshis. My thinking is that they will do it somehow internally meaning that they will not directly transfer the satoshis everytime a block is found. Instead the consumers will have some sort of "credit" in their accounts and they can use that credit to purchase various stuff. I am sure that 21 inc knows how bitcoin works and finding a solution that will flood the network will not be ok for anyone involved in the project.

Also if we managed to have some spam restrictions when SatoshiDice was spamming the network I am sure that we can find a solution in case of 21 inc too.

How do you plan on mining without wifi?

And I agree a hardware wallet would be a waste of money, just like this entire idea.


You and s1gs3gv keep asserting this but you never provide any evidence to back it up.

Let's see some math that suggests it makes more sense to go with the plan with double the capex and opex.

The only way I can see it making sense economically is if they rip off their customers.


The major flaw in your logic is the fact that these devices will not be controlled by the people whose electricity they are stealing. They will all be controlled by 21 inc, mining on 21 inc's pool.


You've got this completely backwards. I'm sure you know that the only way to combat a 51% attack (other than a hard fork) is to add more hashrate.

If the capex for a cost effective datacenter is half the capex of their "miner in everything connected to a wall outlet" plan, then they can deploy twice as much hashrate if they go with the cost effective datacenter.


What "various services that derive from mining" do you speak of?

I can't wait to here this one.


You really don't think people would care when they figure out their $2 phone charger actually cost them $60 over the past 3 years? Then they figure out their toaster, xbox, refrigerator, and electricity meter cost them another few hundred dollars?

I think we could be seeing some class action lawsuits if 21 inc isn't careful about how they market this scheme.

Well I assumed that a standard LAN plug would be cheaper to user and less prone to hacking than wi-fi.

The idea isn't bad at all. The implementation on the other hand can be wrong or bad.


Well let's see the math. Go ahead :)

From my point of view the opex is non-existential. The capex is very low and we still don't know who will pay for it. At this point I can easily ignore the 35$ USB charging hubs. I don't like them so much, but the routers and mining cores into regular chips seem a very good idea with minimal capex.


LOL. The devices are controlled by the people. They can power them off whenever they want or they can just stop the mining. That IS control.

Also we don't know yet how will the mining be managed, but they suggested some sort of p2pool. We don't know yet if and how that will be possible, but my fear is not about the centralized hashing power. I'm more afraid that 21 inc will handle most of the newly generated coins. But I don't see any incentive for them to screw things for everyone with their huge amounts of coins. Having a centralized hashrate seems more dangerous than just holding the most of the newly generated coins. At least for me.


Again wrong. How on earth can you compare the capex of these 2 situations? Any large player that wants to deploy much hashrate must invest into a good datacenter and into all the required infrastructure which means power and cooling. That adds up fast in terms of capex while having "miner in everything connected to a wall outlet" makes those datacenter costs obsolete.

How much do you think that a 100MW datacenter would cost to be ready for miners deployment? I think that the costs to have 500MW ready for miners are less than the costs directed towards "miners to all" program.. Step 3 from their plan indicates  0 capex :)


Well I don't have all the answers, but I'm not rejecting everything from the start just like you do. The problem here is that you are completely ignoring/rejecting this while I'm simply stating that there is always this possibility. We are not business man so it's a bit hard for us to think of such services, but I am 100% sure that there is at least one "various service that derives from mining". Back in the '80s or '90s the services derived from the Internet were very small and look at today's situation. There are tons of services that derive from the Internet which were something unimaginable in the '80s or '90s. The same can be applied to Bitcoin.


Multiplying the amount by 3 to make it look bigger will still bring the same reply from me. Nobody cares about 60$ in 3 years because the invoice would be monthly and the amount would be too small for anyone to care.

Also 21 inc will not enforce units to mine and one single miner in a household will be enough for their plan.

Friendly bet of 0.1 BTC that we will not see any class action lawsuits in the first year after these devices are being put up on the market?

Here's a list of things I really doubt:

- someone would waste the time/effort to hack a 21 inc device holding fractions of a dollar
- an ethernet port + cable would be less expensive than wifi
- people want extra cables running though their house
- people want a phone charger that has to be within X feet of their router for it to function


The opex is clearly stated to be 25% of mining earnings. If they plan to give users enough btc to cover electricity costs then it will be 50-100% by time they start mining.


I actually agree with you on this one.

I wouldn't say putting mining cores in regular chips is a great idea, but it's definitely not absurd like putting chips in a toaster/phone charger/microwave/etc.


Based on my research, I'd say ~$60/kw for a Bitfury style "hashing center". (including everything but the miners)


Which is as misleading as their "zero opex" claim. Qualcomm isn't just going to give them silicon space for free.


I'm open to the possibility that 21 inc does this in a successful/non-scammy way.

I completely reject your theory that miners will continue to mine past the point that revenue < opex and that there is some mystical service that can somehow make unprofitable mining profitable.

Your analogy doesn't really make sense because internet providers have always had massive profit margins not negative ones.


Maybe if we get any solid info on the hardware/plan, but not now as it's all conjecture based on rumors.

Jimmithy, I respect your understanding of traditional mining economics, capex, opex and all that but I think what you are missing here is that in some way or another 21 inc. needs to, and probably will, create new and novel value for the retail customers of devices with embedded micro-miners that makes the small incremental opex worthwhile.

I don't know what these are going to be but I'm sure that with $116 Million in VC and counting these guys can afford to hire a lot of smart people to figure this out, and they will.

As a software guy who was born in the first half of the last century and is still professionally active I've seen a lot of change in my lifetime and am humbled by my inability to predict much of it. Your arguments regarding the advantages of centralized large scale mining farms are reminiscent of the mainframe/mini/microcomputer arguments that played out in recent history.

Modern computing trends have embraced the importance and value of wide area networked distributed systems and mining is no exception. Of course with bitcoin distributed computational capability is at the very heart of the nature of the coin. The bitcoin network is essentially a distributed p2p computational platform waiting for a killer app and the trend is to decentralize it further.

I was excited about the potential of the new thing called the web when Andresseen was working at Netscape, and I am excited about the potential of micro mining on embedded devices now that Andreessen is at AH and involved in 21 inc.

21 Inc have the vision. Do they have the capability or will they become the Netscape of this new era only to let Google or Microsoft win the race ?

I don't think we can make much progress before we have answers (or minimally fundamented guesses) to these basic questions:

- What is the power consumption of their chip?
- What is its hash rate?
- How many of those chips do they have in stock?
- How much did those chips cost (icluding design)?

+1. Its a nice idea, but the fact is that most mining now occurs only where power is <$0.10/kwh, which rules out these devices in almost half the world (including the majority of europe). That $35 hub would be earning meager scraps while dumping ~10W of heat without proper heatsinks or cooling. imaging plugging it in in an outlet behind a couch, or if clothing is dropped on/around it while plugged in (its extremely common for most people to do that with thier chargers already). its a fire hazard unless theres temperature shutdown built in (extra cost)

re:datacenter: I think $60/kw is pretty reasonable. A 30A 208V (6kW) circuit costs about $100-150 to install, $50 for additional power bars and ethernet, $5 of rack space and networking supplies, and the remaining ~$100-150 is spent on the building space (assuming $30/kw for this in scale)

-> its important to note that a datacenter will pay at least 30% less for power than most residences where this little wallwart is going to be used. couple that with economy of scale and mining will almost certainly centralise wherever power is <$0.07usd/kwh in the next decade.


all that said, if bitcoin price jumps up, and increases faster than the difficulty (remember theres probably 100-150PH of gear currently turned off because its >0.8w/gh) then we could see mining be profitable for anyone and everyone involved (like when it jumped to $1000 and even the guys with 0.25/kwh in the UK were mining)

Just because a person's  idea was once a success, it does not mean other ideas by the same person will be successes too.

Also note that Marc did not invent the WWW or graphical browsers.  He was the leader of a team who created NCSA Mosaic, an early (but not the first) graphical browser, and later one of the founders of Netscape, a company that sold the first commercial browser.

Your question casts me back in time to the day I read that Intel had introduced the 4004 microprocessor. If I had relied on the answers to your questions to understand the impact of this new technology I would have been at a loss. Instead, I said wow. I get that.

All in the history books now for anybody to read. I recall advertising my new website on NCSA's 'Whats New' list which was, at the time, the only way to discover new resources.

I don't know the 4004 but surely it was a competitive commercial product.  The point of my questions is to know whether 21.co is building a competitive commercial product, or just looking for a way to recover some of the money that they invested in an unprofitable mining chip.

http://en.wikipedia.org/wiki/Intel_4004 (http://en.wikipedia.org/wiki/Intel_4004)

My guess is they're looking for the most profitable way to recover money they invested in a pretty good mining chip. They figure self-mining they have 100% of the expenses and 100% of the revenue, but if they ship them out with their plan, they have 0% of the expenses and 75% of the revenue. Especially if they sell "services" which get them most of that last 25% of the coins. I'm also assuming the person buying the router pays the extra $8 for the chips.

I wonder if they'll include options to turn the miner off without having to power down the entire device. If that option is not present, and they also run the software-locked pool, then the user really does have no control. Unless you put it behind another router that redirects requests from their pool to your own? But that's kinda stupid to have a mining router behind a router. Just get a miner.

1947 - the transistor
1969 - unix
1971 - the first single chip microprocessor
1973 - Cerf/Kahn TCP paper
197x ... 199x - emergence of ARPAnet, internet and WWW
1991 - linux
2008 - Nakamoto bitcoin paper
2013 - $USD 1200 bitcoin
2015 - bitcoin micro mining introduced by 21 inc.
2020 - total collapse of large scale centralized bitcoin mining

The chip surely was profitable (or was expected to be) when they designed it.  They had two big mines in the US, using oil cooling, and seem to have taken a small but significant slice of the block rewards.

However, I read that they have not mentioned those mining istallatons in the recently leaked investors slides.  If the chips are now unprofitable, and they have millions of them in stock, their new "business plan" would make a lot more sense.

Good timeline, but some are missing:

2013 - Dogecoin created
2014 - $USD 260 bitcoin

 ;D

You should buy some BTC while it is cheap Jorge.

I hope so...
Most people don't realize that centralized mining=bitcoin demise or its transformation into something worse than regular banking.

Ok you have a point, but since we have agreed to rule out the USB hubs/chargers let's move on from this subject because this will not be their main product. This is only their testing phase and yes they can afford to sink a couple hundred thousand for testing stuff. From what I know the R&D from Apple eats up to 1B$ per year. I am sure that Apple had some failed products/tests. Same thing can apply here.


You lost me here. Let's clarify things. Isn't opex an ongoing cost for 21 inc? If consumers are paying for power that's not a cost for 21 inc. Unless you see it as they give up 25% in order to gain 75%. For me the opex is nil. It's less than 1 beer per month in most decent countries.

If your view is different please explain.


I actually agree with you on this one.

I wouldn't say putting mining cores in regular chips is a great idea, but it's definitely not absurd like putting chips in a toaster/phone charger/microwave/etc.


Fine. That makes it 600k for 100MW and this also comes with a huge monthly opex that is non-existent in case of 21 inc. 21 inc will mine "on the cloud" with minimal costs  ;D


Well I think it's more than obvious that the consumers will mine at a loss. If they keep only 25% of the earning and they are still making a profit then everyone will start mining just like in 2013 and difficulty will spike again.

Why can't you accept this fact? That consumers will mine at a loss? I have days when my TV is open all day, but I don't watch it. I have days when I forget the lights open and they stay open the whole day and night. Those are money burned that will bring me no benefit, but it's just spare change. I don't care about an extra 1-2$ per month. Nobody will care. This subject is really useless. There are far more important and more dangerous things to discuss than this.

My guess is that the hubs will be built just as a pilot project. It would be absurd to work on deploying millions of routers without testing the waters first with a couple of thousand of hubs. Imagine them as mining USB sticks. Very bad $/GH, but people still bought them even when they were clearly unprofitable.

The power bill for a 100MW datacenter at 0.05$/kwh is 500k$ right? And that's only one datacenter. Why have this burden every month when you can migrate it to someone else with less headache? :)


Exactly! I hope jimmothy acknowledges your post.

They must include the option to turn of the miner because otherwise it would be stupid.

My guess is it won't just be $1-2 per month. I could see $2 per month per device, and they're going to want you to have as many devices as possible. If it's ten things per household (the router, the TV, the DVR, the other TV, both game consoles...) that's $20 per month. For some people that adds half again to the power bill, and it yields them what, $10 in coin disbursements they can use for spamming the blockchain with microtransactions for 21e6-sponsored value-added services? And that's $10 now; in a year they'd still be spending $20 but the yield would be more like $2 in coin (unless the exchange rate starts going back the other way, so maybe $3). Sure it decentralizes the network, but it decentralizes the network in such a way that everyone mining mines at a loss and 21e6 takes all the coin.

It's definitely possible that a lot of people will find the "services" favorable and will jump on the bandwagon of BTC-enabled household devices. But it's also possible that a very wealthy entity will have no qualms at all about increasing its profit margins by convincing its customers that they're getting a good deal while actually making things worse for everyone.

I won't be too surprised if they allow you to turn off the mining functions. I won't be surprised if the device with this option costs more than without it. I will be incredibly surprised if they don't charge even more for a device that also allows you to pick your own pool.

Bitfury developed a light bulb that automatically mines Bitcoin....:
from reddit
http://www.reddit.com/r/Bitcoin/comments/37hrbg/bitfury_developed_a_light_bulb_that_automatically/
https://twitter.com/chijs/status/603599293602234368

Was just about to post this. Ok. The popcorn is on you now!


What if having a router, TV, DVR, consoles and so on can make you get rid of the internet&tv subscription? I bet that many people would like to stop paying for some kind of subscription package while having these devices plugged in even if they have to pay a bit more for power? I think there are at least a couple hundred thousand households that would take this deal.

Something tells me that Comcast won't be real keen on the idea of forgoing my $60+ per month tribute to them for Internet. Of course maybe 21e6 will just send them a check for $59 a month?

As for the mining light bulb, I'll just walk on by at Home Depot and get the 8.5W LED bulb that runs cooler.....

Is there a sub-forum for "Absurd Mining Discussions"?   :)

Most successful complex systems are linked in a way that works to the benefit of both (or multiple parties).
example:
plants use energy of the sun, CO2 (carbon dioxide) and H2O (water) and produce O2 (oxygen) as waste plus carbohydrates (sugars). Plants are producers in general.
animals consume plants (and/or other animals) and produce CO2 and water as waste, which then can be used by plants again.
As such, one kingdom of life is linked to another in a relative balance (at least chemically)

Going back to bitcoin, everyone strives to produce bitcoin (mining, etc), but there is no "natural" sink for it.
Something has to be there to "consume" and recycle bitcoin into the ecosystem, as pure numerical accumulation in the vaults/wallets would not be sufficient.
A long term plan of 21 inc in basically that such "sink" would be automated or semiautomated systems trading bitcoin for services, but in order for these systems (and humans) to be engaged in such trading, they have to be endowed with a lot of bitcoin (and bitcoin eventually has to be much higher in value, obviously).
So, these fractions of bitcoin that gadgets might accumulate is in part for them to be able to exchange services in a network that is 1000Xlarger.
The equivalent of the unexpected (or expected?) benefit similar to animals use of oxygen (a plants waste product) would be LARGE VALUE accumulation (btc appreciation), which would benefit the existing owners of 2/3 of bitcoin mined so far, aka us. As per Metcalfe's law, we should expect at least 10^6 bitcoin appreciation if network expands 1000-fold (square of number of nodes)

Conclusion: In my opinion we should buy/mine while we still can and then allow companies like 21 inc create an ecosystem which might not result in more numerical bitcoins to us as they will be used by devices, but will result in a large value appreciation that would be beneficial in the final analysis.

But does that work if one entity controls the majority of the new coins generated? I'm very much in favor of the value of bitcoin increasing per its utility as a currency exchangeable for goods and services increasing, but I don't trust heavily-endowed venture-capital-backed entities to not seek more immediate profits than strive somewhat selflessly to build up the economy as a whole.

My skepticism is not that what they're doing could be beneficial. My skepticism is that, because they want to see a sizeable return on their hundred million dollar investment, they'll try and control every available revenue stream back into their own tributaries and it'll have a more embittering effect as millions of customers realize they're basically being tricked into paying someone too much for a nonessential service. Mass distribution of mining gear is a good thing. But a single entity controlling it is not actually mass distribution of mining gear, it's mass dispersion of the cost of one entity's farming operation. That's where my hangup lies. If 21e6 can prove it actually has the bitcoin economy as a whole in mind (rather than greed and/or profit), which includes educating its customers on the actual costs and benefits of the hardware and services they'll be handing out instead of duping them into burning electricity to line 21e6's pockets, I might be able to get behind the idea.

It looks like BitFury has beaten 21Inc to the "light bulb division" and that Sfards will take over the "Lava Lamp division", and all without any obvious $116 Million VC money.

21Inc better get cracking or the only thing left will be the "Toaster division"....  :)

I wonder if BitFury's lamp will have user configurable mining or not?

A more interesting question is: if Joe Plumber has to choose between an ordinary lamp and a BitFury mining lamp, which one should he pick, and why?

Profile on one of 21 inc's investors Vinod Khosla http://www.gsb.stanford.edu/insights/vinod-khosla-be-wary-stupid-advice (http://www.gsb.stanford.edu/insights/vinod-khosla-be-wary-stupid-advice)

I won't argue that the pedigree of the investors isn't impressive, way more than mine. What I am interested in though is what 21 Inc actually does.

It almost doesn't matter. The large investments in 21 inc and presence of firms like Khosla's and Andreessen's are a tell, a bit like that volume spike on a coin's OHLC chart a few days ago …

The IOT with integrated micro mining will be like any other new and promising field .. it will develop at first by fits and starts and you'll have your Netscapes and Alta Vistas and eventually a Google and a Facebook will emerge. 21 may or may not become successful but their funding signals that this is going to happen and it is going to be big.

Time to start building your killer apps for the platform :D

ya laptops arent really made for todays mining

They never were really meant for it.  You have a limited airflow it can get hot depending on laptop.  Turn processor or GPU up on high intensity bad things can happen.

And worst thing is unlike a desktop you cant RMA part's.  Most of time laptops have to be sent in whole.  So means you use access.  In day's of GPU's it was common to clock one to high or use it to long and need to get a RMA.

Asics have simplified things a lot as far as equipment.

I think its a myth that you cant exchange parts on your notebook. I already changed mainboards on two different notebook models i owned. No problems. And other parts, like exchanging GPU to a bigger one, RAM and so on arent difficult. Whats correct is that youre limited at how much you can upgrade.

21 is stilly a mystery for me. I fear it will be bad for bitcoin because people will feel scammed. But ill give them the benefit of the doubt.

Still no information about the hashpower and consumption of the 21.co chips?

Usually, when a company hides "strategic" data, it is because the data is disappointing, or worse...

Their 14nm effort is apparently targeted to 0.15 J/(Gh/sec) at chip level at rated speed. Since 14nm gives roughly 50% power reduction versus a 28nm design then they're still using a cell based approach, ie it's nothing new. It's fine if you're playing with someone else's money and they have very deep pockets, there's 40nm designs that will do much better than this.

Not that it's important - this is just another in a long line of hyped up projects where it doesn't matter if they fail as long as the initial investors get their return when the inevitable IPO hits the stock market.

Since they are not selling miners to the public why should they make public their chips tech data? Their plan is to sell appliances, not mining chips.

Besides, why worry about additional public disclosures? It seems like they already got their $116 million. What more is there to gain from additional disclosure? If we see more it may be because they are trolling for more money.

IOT market to triple to $USD 1.7 Trillion by 2020

http://finance.yahoo.com/news/internet-things-market-triple-1-140200967.html (http://finance.yahoo.com/news/internet-things-market-triple-1-140200967.html)

IOT = good idea*

Inefficient/expensive miner in everything = bad idea

*specifically non-21 inc related ideas. Everything I've heard from 21 inc seems like a poorly thought out solution to a nonexistent problem.

Thats funny jimmothy. I think IOT is a bad idea and micro-mining is a good idea.

IOT is a bad idea because there are significant security issues with existing software and hardware infrastructure that need fixed before we start putting more 'things' on the internet. As an illustration of this thesis, visit DARPA's Cyber Grand Challenge at http://www.cybergrandchallenge.com (http://www.cybergrandchallenge.com) where they begin by explaining:


Micro-mining is a good idea because it will decentralize the network, disenfranchise big players like KNC and enfranchise people who don't currently participate. As an illustration of how seriously people take this thesis, you need look no further than the amount of money 21 inc. has raised and the quality of their investors.

Leaked image of a 21.co household appliance with embedded mining chip (http://www.ic.unicamp.br/~stolfi/temp/2015-06-02-iot-clip-x700.jpg)

(This is only a low-power protopype with Wifi, NFC, Bluetooth, and USB. The production version will have also G3/G4, HDMI, and a power plug rated 30A.)

Your opinions are contradictory.

If IOT devices are insecure, so are microminers (since they are just IOT + bloatware miners).

The IOT however isn't the backbone for a multibillion dollar transaction network, so a hack, although might cause inconveniences, is not really a big deal. On the other hand a hack of 21 inc's army of microminers could be catastrophic. I think we can all agree that a hacker is infinitely more likely to attempt a 51% attack than a company who has invested tens of millions into bitcoin/mining.


Firstly, 21 inc's plan won't be decentralized. They've already said all the miners will be using their pool. Most likely all btc will be stored on their servers to avoid dust clogging up the blockchain.

Secondly, you keep pretending that micromining will somehow remain competitive.  Rebranding home mining as "micromining" and unnecessarily adding costs/inefficiencies/gimmicks doesn't magically make it more profitable.


CueCat raised $180 million from equally high profile investors/companies and the end result was "fails to solve a problem which never existed". Sounds exactly like 21 inc.

This is only true if the micro miners select a variety of pools, and not just the inevitable 21 Inc. pool. If the 1 million micro miners are all part of a single pool, then all you have done is distribute the hardware, and done nothing to decentralize the network. It's the number of reasonable sized pools that matter not the number of physical bits of mining hardware (IMHO).

I am always curious about peoples perceptions on what it means to be decentralized. To me, ten roughly equal sized pools is decentralized, even if they all ran the exact same type of hardware. Some folks seem to think that sheer number of mining hardware units does it (e.g. the micro miners). I am also curious as to the reasons behind the rabid desire for a decentralized network.

I too am not keen on "The Internet of Things" concept in general. Although, it will no doubt accelerate the push to IPv6 in my opinion.

Not at all. Your understanding is incomplete. We've both clearly expressed our views. Lets see how things play out :)

Of course.

Please share how do you imagine a decentralized network.

The network seems pretty decentralized already. No single entity is anywhere near 51%.

To further decentralization, manufacturers could offer their customers decent rates without outrageous markups. When mining returns decline to non-astronomical levels it might make more sense to focus on sales than self-mining for manufacturers. That could create a situation where access to cheap electricity is more important than access to the cheapest hardware which would allow medium/large scale operations to thrive.

I don't see how gimmicks/schemes can further decentralization in any meaningful way. Especially not a scheme that automatically gives a single entity 75% of the hashrate of each device distributed. (assuming they at least give users control over their 25%)

If there was inverse "premium" applied to VERY large purchases, it might blunt the impact of large mines. For example:

Buy 1 miner, it costs X.
Buy 5-50 miners and each one costs .95X.
Buy 1000 miners and they each cost 1.2X

I don't think this could actually work, but it would discourage massive mining farms and/or purchases.

Just a random thought.

It should theoretically already work like that.

http://upload.wikimedia.org/wikipedia/commons/3/38/Economies_of_scale.PNG

http://en.wikipedia.org/wiki/Economies_of_scale

Edit: After thinking about it further, I really doubt any manufacturer has reached the point where increasing production would decrease the price per unit. Compared to the entire electronics industry, the materials required to produce bitcoin miners are pretty much negligible. (I estimate ~10k bitcoin miners produced per week)

Another thought, wouldn't your inverse premium idea just disincentivize decentralization? After all, the manufacturers are the main threat to decentralization, not the people with 1-10MW farms.

I'd be okay with flat pricing no matter how many were purchased. That way you're neither specifically favoring nor specifically disfavoring anyone.

I also don't like the idea of pool-locked or 75/25 hardware, since as has been mentioned, it's dispersing a single-control farm rather than decentralizing the control of mining in general.

Clearly the point of owning a 21-enabled device is not to make money mining, as several others have already pointed out. The idea is that at a sufficiently low power draw people might not object to the miner being there, provided the device offers enough value for money in other departments. The trick is to find an application that is synergistic with Bitcoin mining.

How about this, a device that combines the following features:

- Full Bitcoin node like Bitnodes Hardware (https://getaddr.bitnodes.io/hardware/).
- Tor router like Portal (https://github.com/grugq/portal) to provide high anonymity with fewer possibilities for exploits than running Tor on your own computer. Mainly interesting for those who have political motivations or are doing naughty things, but also a noble-sounding pretext ("helping dissidents in Iran").
- I2P router that does something similar for bandwidth-intensive applications that do not need to leave the darknet, such as file sharing or naughty Streamium streams that could benefit from increased privacy for both sender and receiver. Potentially attractive to a much larger group of people.
- Meshnet (https://wiki.projectmeshnet.org/Hardware) router.
- Access point for selling bandwidth to strangers with phones with expensive data bundles using Bitcoin micropayments channels, as proposed by Mike Hearn.

There is synergy between several of these functions.

For example, if you want to sell bandwidth and want to avoid liability for what people are doing over your connection, Tor helps. Paid applications that rely on stealth Bitcoin micropayments would benefit from decentralisation and might be more willing to contribute financially, especially if it costs very little. People running such a node could still be seeking a profit, such as getting paid anonymously for hosting files. The mining costs could then be seen as an expense and overall the operation could still be profitable.