Topic: Gold collapsing. Bitcoin UP. - page 325. (Read 2032265 times)

interesting analysis.

i'm amused by the guys here presuming that the 21 guys have not made a similar analysis.  in fact, i'm sure they've made a very extensive marketing and technical analysis.  Balaji and company are no slouches.  they are in a different category from your normal, shoestring startup with minimal capital.  Balaji is an established VC as are his cohorts.  he mentions this:

"towards that end, our team of PhDs in EE from MIT, Stanford, and CMU has built not just a chip, but a full technology stack around the chip — including reference devices, datasheets, a cloud backend, and software protocols. And we have already engaged with a wide variety of early access partners across the industry, from small startups to multibillion dollar hardware companies."

similarly, the list of investors includes alot of smart, analytical, successful people and companies.  they surely didn't just throw their money at this w/o any research.

ZH comments on Cypherdoc's fav chart
"It is very rare to see Dow Industrials hitting new highs as Dow Transports prints new range lows... one of them is wrong here..."

http://www.zerohedge.com/news/2015-05-20/one-these-things-not-other

i guess that means every night then, as i would think that over night is the most common charging period. this is pretty cool i have to say. with phones collecting near half the number of bitcoins mined, thats going to cut down supply drastically - more so come the next halving.

Just guessing, but I'd imagine that the mining chip would only run at full power when the phone is fully-charged and plugged in.  At other times, and to conserve energy, the mining chip can be running at a slower clock speed or not running at all. 

Let the author know https://twitter.com/pcoletti

brilliant analysis peter. didnt realise that their plan would be that lucrative. would these chips not reduce the battery life of phones though?

Let's do an order-of-magnitude calculation…

An article from Life Hacker reports that it costs about $0.50 to keep your phone charged-up for a year:



Now, my phone gets pretty warm when it's charging so the new mining chip can't draw that much more power.  But then again, a lot of times my phone is plugged in and already fully charged, and so the mining chip might as well be running.  So let's say that 21 Inc. can boost the yearly energy consumption of the typical smart phone from $0.50 to $3.00 before people start to complain about "hot phones."  $2.50 goes to mining bitcoins…

We'll also make the assumption that the cost to mine the bitcoins is exactly equal to the market value of the mined coins.  In reality, the first coins will probably be cheaper to mine, becoming progressively more expensive to mine as the network hash rate grows.  But for our order-of-magnitude calculation, we'll assume that $1 of BTC cost $1 of electricity to produce.  

At the current market value of ~$250 / BTC, this means that each phone will produce approximately

   ->  0.01 BTC per year, or
   -> 1,000,000 satoshis per year, or
   -> 83,000 satoshis per month, or
   -> 2,700 satoshis per day

For comparison purposes, note that the current dust limit is 540 satoshis.  This means that the amount of bitcoins generated by the phones is not insignificant (when compared to the dust limit) over time periods measured in days, weeks or months.  

…Let's go further…

The same Life Hacker article claims that:


Let's be ambitious and assume that eventually 21 Inc. chips will be included with 10% of the new smart phone shipped (~57 million phones).  The total bitcoins produced by these phones would then be

          57,000,000 x 0.01 BTC / year
    =   570,000 BTC / year

Or about 1560 BTC per day.  Since there's presently ~3600 BTC mined per day, these 57 million smartphones would contribute

        ~43% of the network hash rate.    

If 75% of these mining rewards flow back to 21 Inc and its partners, that works out to

         0.75 x 57,000,000 x $2.50 / year
  ~= $107,000,000 per year

This means that the expected revenue is not insignificant.  

This is an interesting question. I've seen the counterargument that preventing pools increases the incentive for large farms (including, I suppose, the distributed sort of farms that involve devices in disparate locations but centrally controlled). That might be negative for decentralization of mining broadly, since at least with pools as they mostly exist today, the actual miners can switch pools (often cypherdoc makes this argument). I'm not sure.

You realize that any "poll" like this is itself trolling right?

If you don't like his posts, ignore him.

Personally I think sometimes he adds value and sometimes he doesn't.

The mystery here is that devices could be paid for by mining. Maybe the general bitcoin society has misunderstood.

I'm pretty sure in the white paper-ish thing they posted it says that the split can be anything, and is up to the manufacturer of the devices. I don't remember if it explicitly said that 21 will be using 75/25 for any particular devices or if that was just an example, or earlier speculation from third parties.

In fact even Zerocash has timing and other related side-channel attacks, such as vulnerability to IP monitoring. If  you know when someone sent a transaction and you are doing IP monitoring you can likely identify the transaction, even if you can't see what is in the transaction.

If you limit yourself to passive analysis of the blockchain (and ignore timing on the blockchain) then Zerocash is opaque, but the tradeoff for that is much newer and dodgier crypto than Monero (plus the still-trusted setup; their proposal is to do multiparty, but if you aren't a participant, or weren't around to witness it, you are still trusting it). There was recently a serious break in one of the crypto tools used by Zerocash. If that had happened with a live coin in operation the entire coin could well (likely would have been) destroyed.

I don't know if Zerocash will be ready for prime time soon enough to succeed. I'll certainly hedge in it if a coin launches and doesn't get too much too wrong though.

I don't know about that. First gen, yeah probably. But sooner or later ASICs will hit Moore's law or worse like everything else and their usable life will be measured in years (2-5 or more) like other chips.


Probably some of both


They said exactly that is part of what they are doing. So where's the big mystery here?

That's true. Large scale mining is here to stay. For the apparent 21's plan, people tend to view only the power as input cost. As always, it is manpower (in the form of management), natural resources and capital. Those chips cost money. Each chip added to a board cost far more than the chip itself, and that principle is also applicable to areas of a larger chip.

I think that it is not feasable. But bitcoin technology in the form of an automatic economic actor inside a device could be useful provided there is something for the devices to trade. Could be anything. A wallet and an automatic trader inside every device. They could have something like that in mind.

He is definitely NOT a troll. Highly intelligent but....

I do think you've become a bit more approachable and chill since I first saw you post under the anonymint handle, so that's good to see You still seem very dogmatic, though.

Alas, I do also think that this suggestion might prove quite valuable:



I will continue to try and digest new information which comes my way with as open a mind as I can manage without my brains oozing out of my ears. If you produce something which turns out to be all that you claim I'll be happy to let it teach me lots of new things, just like Bitcoin has. I just hope you'll make it easy to navigate. I still shudder when I remember trying to navigate your self-referential hyper cross-linked information hell you used to produce  

That's cute. I'm here to learn from individuals who provide information worth gleaning something from, not ego driven, socially inept, paranoid schizophrenics spreading disinformation. Thanks though.

http://www.zerohedge.com/news/2015-05-20/one-these-things-not-other

A sign but not a given.

I can't quite tell but I think you're serious?

The consumer is going to get 25% of jack shit, and a bigger electricity bill. You can't possibly think this is a business model.

These ASICs are going to be nearly obsolete by the time anyone plugs them into a socket. They are not going to mine anything of value, certainly not enough to pay for any real world resources. A few satoshis is below the dust limit and unspendable.

Even if that were somehow overcome, do you really think that all the power outlets that people can use today for free, will still be free, once it becomes clear freeloaders will be making real profits by stealing power? Of course not. They're only free today because no one is trying to take advantage of them.

21's plan, as stated, is pure bullshit. The only question is whether they know it or not.

Users mining in an algorithm where pools are impossible is positive for decentralization of mining. Users possessing devices that mine without user control possible and which can not be stopped from sending the mining shares to the centralized server for the device provider is centralization of mining. Decentralization is permissionless freedom. Centralization is totalitarianism.

Note since PoW enables the latter case, PoW is no longer a viable choice for the consensus algorithm. The cartels will gain more than 50% of the hashrate virtually guaranteed because the efficiency of heat appliance mining is maximum and thus drives all independent mining (that isn't also a heat appliance) bankrupt.