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Bitcoin Arrives At NYSE, Startup Aims To Tackle Micropayments and Easy Mining
itwbennett writes: A startup company whose backers include Qualcomm, Cisco Systems and a former ARM executive, and which reportedly has raised "well north of $116 million" has just come out of stealth mode. The first thing to know about the company, which calls itself 21, is that it has designed an embedded chip for bitcoin mining. The details aren't entirely clear, but the plan seems to be to get its bitcoin mining chip embedded into millions of smartphones and tablets, and for those devices to work collectively to mine new currency. But the company has larger ambitions: It sees its chip as a way to solve the problem of micro payments and it could also be used to pay for the chips themselves.
This was followed by news that the New York Stock Exchange will begin tracking and showing Bitcoin's dollar value. Reader Lashdots adds a link to an article describing how Silicon Valley finally joined the rush to invest in Bitcoin-related businesses.
If you are serious about using bitcoins for transaction purposes, it seems pretty clear that there is a role for something more secure than 'wallets' running on people's shoddily-secured systems(or, god help us, 'cloud wallet' bullshit); by design, there isn't anyone in the ecosystem to soak up the fraud as a cost of doing business(which is what allows, say, absurdly pitiful CC security to survive), and the usual efficiencies associated with networked computers make stealing the things a great deal more efficient than stealing cash one wallet at a time.
If that is the idea; then sure, a 'bitcoin chip', is probably not the worst way to handle the problem(now, why any OEM would pay extra for the chip, the packaging, and the board space, rather than, say, just re-using the 'trustzone' stuff that basically all ARM cores have, or coaxing the 'secure element' that they are embedding to support some other contactless payment scheme into handling bitcoin related data, that's a much harder problem to answer). Assuming you don't fuck it up, it'll allow you to have a 'wallet' for bitcoins that isn't a total security disaster, is actually vaguely convenient in real life, and so on.
If the idea actually involves any 'mining' (beyond whatever bare-minimum might be needed for a wallet to initiate a transfer), though, this idea could scarcely be dumber. Bitcoin ICs are power hungry, achieve essentially zero gains from decentralization(modest resistance to datacenter fires, I suppose; but substantial additional bandwidth and control-node costs, plus the inability to concentrate them where electricity is cheap); and have so far become obsolete at a rate even faster than that of most cellphone components. Many of them don't even make it to customers before they burn more energy than they 'produce' in bitcoins; and the ones eating battery power, and baked into a cellphone for its entire life, sure as hell aren't going to do better.
At least the ones you keep at home are as efficient as electrical space heaters at converting electricity to heat, with some free math thrown in. In mobile devices, that isn't a virtue.
So what's the plan? Conceptually adequate, but probably doomed, smartcard-esque IC designed to implement a secure wallet; or utterly bullshit and completely crack-addled plan to distribute compute load to the worst possible places?
Wouldn't constant bitcoin mining pretty much destroy battery life on any phone or tablet?
Dunno. But suppose it were designed to mine only when the device is plugged in. If my phone could mine enough Bitcoin overnight, when plugged in anyway, to cover micropayments for some paywalled articles for me to read the next day, it might seem worth it - even if I was paying more for the electricity than the mined Bitcoin was actually worth.
Jobs available backed by 121 million in VC funding- https://21.co/#jobs
Companies investing 121 million in 21INC - https://www.crunchbase.com/org...
More details - http://www.coindesk.com/21-int...
better article - https://medium.com/@21dotco/a-...
Reason Why Qualcomm may be so interested - https://www.youtube.com/watch?...
First and foremost it is looking like 21 has developed extremely inexpensive and efficient chips to embed in smart devices which will have a very nominal power usage and only mine a few satoshi's per hour for the sake of profiting off of IoT services and not primarily off the value of the mined bitcoins themselves.
Reasons -
1) Allowing for micropayments for services, sites and products where the user doesn't even need to signup for a service or provide a credit card.
2) More secure authentication which depends upon the security of the very secure blockchain instead of any built in software. This will be completely transparent to the user as they just need to use 1 satoshi and than they can have the ability to use trustless escrow or smart contracts on the blockchain.The intention here is to make bitcoin useful without the user even knowing about it or having to purchase any.
3) Free SAAS services which depend upon the bitcoins being mined.
4) The ability to pay for and resell bandwidth, where routers and cell phones may become part of a decentralized Small Cell network - https://www.youtube.com/watch?... This is likely why Qualcomm is invested.
5) Reducing the costs of devices by subsiding a bit of the upfront costs with SaaS, mining reward, and BTC tx fees all possible with adding a mining chip.
One good consequence will be in the reversal of the trend of the centralization of mining and the further strengthening of bitcoin. I expect other companies like google, MSFT, AMD, IBM, ect... to form partnerships and start to develop their own competing chips which may use bitcoin or another alt.
If the chip was efficient enough to actually cover it's own cost, shouldn't 21 just build it's own cluster and print it's own money? Oh, it's not? Maybe we can get someone to pay for all of the electricity this thing uses and just throw them a few pennies every once in a while to keep them happy ......
21 Inc revenue model isn't solely dependent upon 75% mining reward and tx fees but on the value added services that the devices take advantage of. The end user won't care about or even know their device is using bitcoin. All they will care about is the device being less expensive initially, and all the features like trust-less escrow, smart contracts, reselling and sharing bandwidth, ect.. that their devices will now provide them.
just plain old snake oil
... that can facilitate tasks I cannot accomplish otherwise. Yes, let me have some more.
They're going to love a new currency. Look at how much they can manipulate a regulated currency to fuck over people and enrich themselves. Image what they can do with an unregulated one.
Correct, except Bitcoins primary use will become their vehicle to launder their profits which are stolen from other markets. Many of their useful techniques to steal money such as quantitative easing, inflation, bail ins and bail outs, do not work within bitcoin.
Bitcoin miners don't rely on generating secret random numbers, they don't even rely on random numbers at all. They just need to put together a block, prepend an arbitrary number to it, and determine if the hash has the required number of zeros in front. If not, change/increment the arbitrary number, repeat.
The worst thing that happens is a million little chips are running the exact same computations redundantly, wasting CPU cycles and becoming a very expensive hot water heater, but nothing more.
Wonder what the public key field is for?
As far as I've read, producing coins is the carrot on the stick to develop a worldwide blockchain processing network. As that finite chest of coins dwindles down, perhaps this is the next step toward a much more broadly distributed network.
I wouldn't expect these chips to be burning thru my portable device's battery and making some corporation miniscule trickles of coin. The processing supports the network and makes your device a participant, which could enable some really interesting new economies.
If it's possible to offer some compelling new service for 1-2 dollars per month, why not just charge that directly, instead of the Rube Goldberg method?
Excellent question. One of bitcoins main problems is its lack of user friendliness or its odd and complicated nature. What 21 Inc is trying to do is mainstream the use of bitcoin by treating it more as a protocol instead of currency. No longer will users have to learn about bitcoin, buy some, learn how to secure it, find all the services and apps that allow them take advantage of bitcoin individually. With a BTC enabled device it will just allow them to use these features built in without them having to acquire bitcoin or even know it exists. Widespread adoption and the decentralization of mining will benefit both 21 Inc and the users at the same time. If 21 Inc just created and app with preloaded bitcoins than they would have a more difficult job of getting unique new users and would not be strengthening the ecosystem by further increasing the hashrate and decentralizing it.