Topic: A bitcoin miner in every hand - page 7. (Read 8171 times)

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.

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.

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.

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.

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)

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 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.

$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.

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.

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.

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.

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.

Aaaand we're back at square 1 . 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.

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.

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.

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!

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.

Versus receiving... zero now?

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.

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

Edit:



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