Topic: A bitcoin miner in every hand - page 3. (Read 8153 times)

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

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.

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.

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.

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.

+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)

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)?

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 ?

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.

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?

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.

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.

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?

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.


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.

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 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.

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"?

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.

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 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.