Needless to say that I'm not impressed by 21 Inc's machine. I don't know if there will be more after that but this machine is utterly unimpressive, and it hasn't even launched yet. Now, I know that reddit is so easily manipulated, so I wanted to come here and leave my two cents.
Note that everything posted below is leaving aside the fact that this machine is using open source technologies and costs 400$ (that you won't be able to buy with bitcoin).
First of all, a quick look at the
FAQ indicates that the machine is not meant to provide profit through mining despite the fact that there's a very efficient chip in there. To be specific:
0.16 Joules per Gigahash and can calculate 50-125 Gigahashes per second
https://www.21.co/faq/#technical-specificationsThe price however is 400$ dollars so no hope of ROI just from mining. As of the mining itself, they haven't clarified how it'll happen. Here's what we know about mining so far:
[21 Inc] are not taking a portion of your mined bitcoin. [...]
Little earlier however:
What are the payout frequencies and payout thresholds for the 21 Bitcoin Chip?
The network of 21 Bitcoin Computers does not work like a typical mining pool, so these concepts do not apply. It is set up to give you a close-to-continuous stream of a small amount of bitcoin
So it's not clarified if spending electricity to mine with the machine will pay under a PPS or PPLNS model. It's only specified that they'll be sending users a continuous stream of small amounts of bitcoin. Sounds like they purposefully give out very little information.
So now that we've cleared out why this machine was a total disappointment to those hoping 21 would help the mining scene innovate (instead of using venture capitalist funds to build their own farm) let's see what this machine is supposed to exceed at.
In the FAQ, answering if the machine can make profit:
you would do so not by directly selling bitcoin, but by selling digital goods for bitcoin.
Later on, providing examples about what can be bought and sold:
you can sell paid APIs like machine translation, rent out a 3D printer, or take BTC in exchange for microtasks like tweeting.
[...]
by doing things like running full nodes
It seems like even they don't have a clear view about what
digital goods stands for. Renting a 3D printer is a perfectly physical service. Note how they also mention running a full node as a revenue generating activity. Did they forget how easily nodes are spoofed?
But most importantly, to do all this you'd have connect to their micropayments server. Which from what we know until now seem to be centralized.
The 21 Micropayments Server is a modified web server that allows you to make any internet accessible resource payable in bitcoin.
Long story short, after a pragmatic look at
the First Bitcoin Computer it's apparent that it has no clear reason to exist. It consists of a mining ASIC on top of open source technologies, all for 400$. The creators have clearly indicated that profiting solely from mining is impossible, but mentioned that there is potential for profit through the buying and selling of digital goods. But for users to even participate in such activities, they'd have to create an account (will go into detail about that when going through the ToS and privacy) with their real info and participate in a centralized server for payments. 21 also completely fails to mention viable activities that would result into profit and resorts to mentioning begin paid to tweet and running a node for profit (wtf?).
Now for a look at the more detailed ToS and privacy agreement. To be clear, I think that it's a pretty standard set of terms of service, but the privacy agreement is a completely over the top. Maybe try to skim through it and you'll realize that using such a machine completely defies the most basic freedoms bitcoin provides such as decentralization, ability to remain anonymous, being able to use the currency for any kind of transaction without question etc.
Here are few of the gems in the ToS (quotes are word for word):
They don't warrant that
their service will be virus free:
21 DOES NOT WARRANT THAT: (1) THE OPERATION OF THE SERVICES WILL BE UNINTERRUPTED, ERROR-FREE, OR VIRUS-FREE
Only uses legal under US. law are allowed, this would include playing in unregistered gambling websites, buying kinder eggs etc.
You may only use our Services as permitted by law, including all applicable export and re-export control laws and regulations, including, without limitation, the U.S. Export Administration Regulations.
Users are agreeing to provide their real information when registering an account:
By creating an account, you agree to: (1) provide accurate, complete, and current information;
Have the right to close accounts and prevent access to their services whenever they feel like it, almost sounds like they have total control over what each machine does and doesn't
By creating an account, you agree to: (1) provide accurate, complete, and current information;
Now for the privacy, They collect information in the ways mentioned:
1.Information you give us. We may collect personal information that you provide us through a web form or when you otherwise correspond with us regarding our Services, such as when you contact our customer support team.
2.Device information. We may collect information about devices you use to access the Services and how you use the Services, such as your IP address and which websites you visited before accessing our Services.
3.Logs. Our servers automatically record information created by your use of our Services. Logs may include information such as your IP address, browser type, operating system, the referring web page, pages visited, location, your mobile carrier, device and application IDs, search terms, and cookie information.
4.Cookies. We use technologies like cookies and pixel tags to to gather statistical information about how you are interacting with your Services, which may include identifying your IP address, browser type, and referring page.
This would include almost all online activity. And what happens to this data?
1.We will share personal information with companies or individuals when we have your consent to do so;
2.We may provide personal information to our trusted services providers to process it for us to assist us in providing Services to you, and only based on our instructions and in adherence with this Privacy Policy and applicable confidentiality and security measures;
3.We will share personal information with law enforcement or other third parties if we: (1) are compelled to do so to comply with any applicable law or legal process; or (2) believe in good faith that disclosure is necessary to prevent physical harm, illegal activity, or harm to the rights, property, or safety of 21 or our users.
And on top of that user information might be used to solve disputes:
Note that we may retain your personal information as necessary in order to comply with our legal obligations, resolve disputes, or enforce our agreements to the extent permitted by law.
Or even sold as is in the event of an acquisition:
If we are involved in a merger or acquisition, your information may be transferred as part of that transaction.
I know some of you might say that this looks like a standard ToS and Privacy agreement, but keep in mind that we're talking for what's called a Bitcoin Computer. For a product focused on bitcoin, it's a shame it takes away even the most basic freedoms bitcoin has to offer. Users need to create accounts to access the services, are forced to join a centralised server and only allowed to complete transactions considered legal under US law. Users agree to provide their real info when registering and later this info might be sold for targeted advertising or given to the authorities after any suspicion. 21 even retains the right to deny access to their centralized services without any given reason.
For something that was praised so much, it's sad to say that it almost looks like a data mining botnet with a 400$ to participate in.
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