Topic: Decentralization of mining is returning ... thoughts on 21 inc secret plans? (Read 3705 times)

21 Inc's miners only last for 21 days.  After 21 days the devices die.

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

Dunno about that but Guy (CEO@Spondoolies) mentioned in another thread that he was familiar with their plans but couldn't comment because he was under a NDA, other than to say that it wasn't a game changer.

So there are a few important questions about what they're planning to do that we should be able to figure out with our collective knowledge of how bitcoin works etc.

1) What is the likely hash power of a device embedded in a USB hub, router, desk top box or other similar device ?

2) How many are they likely to deploy and what is their likely aggregate hash power ?

3) How much will this increase difficulty and what is the likely impact on bitcoin prices ?

4) If these devices mine at a loss due to the aggregate increase in network hash power and anticipated bitcoin price trends, what other revenue streams could 21 Inc. hope to generate to make the business profitable ?

5) Do 21 Inc or any of their investors currently hold large amounts of bitcoin and could their business plan be to increase the value of these holdings by facilitating more widespread adoption of bitcoin ?

6) If 21 Inc claim that they can get the cost of mining a bitcoin to the ~ USD 7+ range, what does that imply for their cost of goods for adding mining capability to a usb hub, router or other retail device ?

7) what does it imply for the hash power of the device ?

9) what does it imply about their assumptions wrt network growth and bitcoin price trends ?

10) In general, what needs to be true for 21 Inc. plans to succeed ?

Seriously, what kind of specs would this chip need to actually be profitable as a miner in a retail environment at current bitcoin prices and when deployed in quantities of tens of millions, given the obvious effect on difficulty ?

Fair enough.

Has anyone seen anything related to their "USB Charging Hub", mentioned for the first quarter of 2015. I didn't get anywhere with their website, which seemed to require an Email address which I was unwilling to provide.

Well, I think some of you seem to be thinking about this as miners ... how much money can these devices make by mining, and does it make sense in that context whereas 21 inc. seems to be taking a larger context - a combined mining play, adoption play, social networking play and IOT play.

I don't think it helps understand this opportunity if we bring to the analysis the assumption that the 116 Million USD is stupid money or that 21 inc doesn't understand how bitcoin works. Lets give them the benefit of the doubt and try to figure out what needs to happen to actually make it work, because that will give us clues to their plans.

You may well be right. Ignoring the fact that it's Bitcoin, there are a bunch of Venture Capital firms that invest big money (e.g. millions of USD) into a startup, and get back 10 cents on the dollar (if that) when it doesn't work out. The VC firm knows that and relies on a few "home runs" to make up for their "strike outs". The Bitcoin marketplace is littered with folks that "invested" in a Bitcoin miner company (who thought they were customers), that lost big. Big money isn't always smart money.

As LordPaco points out, the automatic difficulty adjustment just destroys the theory of "mining the crap out of Bitcoin" because two weeks later (or less) the difficulty adjusts up by 30% or more, and boom your great big plans go poof.

Of course we'll be able to find out how this plays out in 18-24 months, if that long.

You know when someone says something like that about bitcoin you must take it with a grain of salt because bitcoin:


With magic fairy efficiency asic numbers we can draw that conclusion and hold it as status quo for less than two weeks. As they try to reach the fruit it will grow beyond their reach. If they have a super efficient chip they will not hold a monopoly on it for long, and it would be much more profitable for them to apply it specifically to a bitcoin mining application rather than build it into an appliance as a secondary use.

116 Million Dollars has taken the other side of this bet ~LOL~

"By the time its chips were to be embedded into Internet of Things (IoT) devices, 21 projected its cost to produce 1 BTC could be as low as $7.45."

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

I read in more detail the article you referenced. To me the target audience wasn't anybody currently involved with Bitcoin, but rather potential investors in their company. It all looks wonderful on a set of Power Point slides, until somebody starts to ask questions, and then it start to unravel.

While I guess a Router or a game console could accommodate an ASIC, I don't know if either has the built in margin to deal with another ASIC being added. The rest of the infrastructure (e.g. Internet access) is in place, but that's about it. The router is the only one that's likely on 24 hours a day.

I also noticed the $7.45 cost to produce a Bitcoin. I'd swear I read an article that suggest that the price of a Bitcoin will gravitate towards it's cost of production. Think about that for a moment.

I am completely unimpressed.

I have my doubts about what they have actually done with Intel. If they have done something, obviously they aren't actually deploying hash in any significant way at the present time. The network wide hash rate has been essentially flat for two months. I guess if they had a significant amount of hash at the end of 2014, they could be quietly replacing it with more power efficient chips, but that's it. You can't just secretly mine without being visible to the rest of the Bitcoin universe (at any significant scale). Maybe they have some really super-duper chips, but they most assuredly haven't deployed them in large numbers except possibly in replacement of something else.

There are so many other opportunities that Intel has passed on in terms of fabbing chips, this just doesn't seem like it's all that "real". I just don't see Bitcoin being big enough for Intel to care about Bitcoin ASiC production.

I agree more in the thread it will be people making their own devices.  Such a heaters, water heaters, etc.

The big companies will not spend the extra money to get an asic.   Just not enough people know BTC yet.   If someone goes to walmart and sees a cheap space heater, and then one that is a higher cost asic space heater.  I sadly think most of America will spend the less.  I don't think btc has been around long enough to get lots of market share.

Re 21 plans: it would be routers, PCs, etc.
They are seriously hooked up with Intel
While we were mocking around at 0.5-0.7w/GH, they were already for AGES (at least since 2014) on 0.22w/Gh

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

To put it succinctly: their strategy=famous/infamous AOL CDs

If you want to sell an "ASIC based" 500 Watt heater, it can't cost 3x the $39.95 non-ASIC version, or it will never sell. I also would be surprised if it ever ran more than a few hours straight. Most people don't buy a space heater in order to run 24 hours a day. I expect they will also wonder why their "heater" wants to access the WiFi in their house, if they even have WiFi.

I think a specialty niche "ASIC based" heater might appeal to a few folks, but it won't have mass adoption, nor will it pay back much if anything to the manufacturer if it only gets run 10-20 hours in a month (like many small space heaters do).

That's 6000 individuals, it's meaningless.  Unless you think, for some reason, people would give that hash away and allow 21 to have it all for themselves.  Well that's just silly, no one in their right mind would run a miner for someone else's gain, no matter what other function that miner is performing.

you just have to apply math to your suggestion.
say, 0.1GH/w-very possible with 14-16nm tech
not sure about toasters-they are used very infrequently
space heater is typically 500w, so one space heater=5Th
hence, just 6000 space heaters are your 30ph
You don't think that someone can place 6000 space heaters in the whole world or even US alone or 10X that or even 100X times that?

instead of assuming if mining is returning, Id say its staying the same.

most of us are not willing to fork a pretty penny, since we cant valuate the future value nor anyone can else.

but id be worried on the core itself, what happens after all the transactions bitcoin have been found. do we wait for 1 transactions to take 2 days or more? whats considered a fair fee for any transaction.

and theres no good way to automatically calculate whats a fair fee..

Some items make perfect sense.  Such as hot water heater, space heaters, basically appliances that use large amounts of heat and electricity. 

It will be people doing "custom" versions of things such as this.  I do agree a chip in every device makes less sense then going for the higher powered items.

None of this makes any sense.  How many toasters does it take to compete with a 30PH/s mining farm?  These ideas would have been cool a couple years ago, but they seem 100% pointless to me today.

What good could possibly come from a toaster "that communicates with the bitcoin block chain?" Why is something like that useful?