A Bitcoin miner in every hand

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

by zmanian • 11 years ago

167 118 11 years ago

wlesieutre2• 11 years ago

Instead of spending $1 on something, you can burn $5 of electricity! Suppliers figure you're more likely to waste some energy than you are to type in a credit card number, so they say go for it.

And as the big ASIC miners get more efficient, your device will generate even less revenue. In two years, you'll be running at a small fraction of the chip's original mining rate, but still wasting just as much energy!

http://media.coindesk.com/2013/09/bitcoin-difficulty-graph.p...

I'll pass, thanks.

nosuchthing• 11 years ago

Imagine if someone made the opposite of this device, an energy generating device which could supply you with revenue [after the subsidy is paid off] and was not restricted to any particular currency ecosystem.

bduerst5• 11 years ago

You mean something like solar panels?

pavel_lishin• 11 years ago

"Hang on, I just rode my bike to the office, let me plug it into my parking spot so I can discharge the capacitor and get paid for the ride up here and I'll come up to your office."

IkmoIkmo8• 11 years ago

It'd be like putting a tiny solar panel on your retail consumer grade router, one that degrades very rapidly over time, and generates electricity at a higher cost than to simply buy it (from industrial grade dedicated solar parks), in a world where you can send energy as easily as sending email, or for that matter, bitcoin.

It's ridiculous. I'm curious about the bigger picture because they have a stellar team, backing, board and bank account right now.

zapdrive• 11 years ago

The graph you linked is very old. The hashrate is plateauing[0].

0 https://blockchain.info/charts/hash-rate?showDataPoints=fals...

wlesieutre2• 11 years ago

Oh good. The one I linked was just what showed up first on Google. Still, I doubt hashrate will level off entirely.

And if 21 is successful (I hope not...), they'll continue to drive it up further than it would have gone otherwise.

notsony• 11 years ago

The perpetual SHA256 hashing machine...

Did anybody tell 21 that pure proof-of-work hashing was just an experiment and could go the way of the dinosaur?

Ethereum, Nxt and other cryptocurrencies are already using proof-of-stake or some other hybrid process...

DennisP2• 11 years ago

Ethereum isn't using proof-of-stake quite yet, that's planned for a later version in a year or so. They're starting out with a proof-of-work algorithm that's designed to be ASIC-resistant. (It's heavy on memory bandwidth, which is already optimized in GPUs.)

Not that this makes any difference to your point, of course.

oska• 11 years ago

More like spend 5 millionths of a cent's worth of electricity to receive a transaction token that trades for 1 millionth of a cent. But that token (1 satoshi) has much more utility than as just a store of value and has been loaded onto your personal device without you having to do anything. And can be used by software on your personal device to give you extra functionality without again you having to do anything. Or even really understanding how it works or what is going on at the technical level.

People walk around with extra apps on their phones consuming battery life all the time. If a user was presented with an option to turn on some hardware in their phone that gave them all sorts of interesting additional functionality and at the same time were warned that it would decrease the battery life of their phone by 1 or 2 percent then I think you have a viable proposition.

monochromatic• 11 years ago

Why not have a background app that periodically purchases a satoshi now and then?

bri3d• 11 years ago

But provided a Satoshi has a magical value beyond as a way to make transactions, why not spend 2 millionths of a cent where electricity is less valuable (i.e., before it's been converted in a lossy fashion many times and stored in my pocket where it's worth a lot more) and just transfer that Satoshi to a wallet on the phone?

This play only makes sense if someone is extracting the actual currency value of a Bitcoin somewhere along the line.

If that value is going to me as the consumer, it's a terrible trade because it's taking the electricity that's gone through the most conversion losses from me in the place where it's most valuable. I might as well buy Bitcoin elsewhere. If some of that value is going to the chipset manufacturer or a middleman like 21, it's a straight up scam where somebody is stealing the electricity I put into my phone.

An HSM for Bitcoin wallets in a phone makes a small degree of sense to me, a mining ASIC makes none whatsoever.

optimiz3• 11 years ago

Worthless, unless you want to be beholden to 21's mining pool. The minimum block-chain transaction size is 546 Satoshis.

Nursie• 11 years ago

> all sorts of interesting additional functionality

I'm not sure I see the value proposition in paying 5 times over the odds for the smallest possible amount of bitcoin....

SnootyMonkey• 11 years ago

"And can be used by software on your personal device to give you extra functionality without again you having to do anything."

Without you having to do anything but pay for and power a dedicated chip. If the utility of having a tiny amount of BTC on device is so high, and the cost so low, why not just have the device manufacturer pre-load a lifetime supply on the device (purchased or mined in a giant wind powered data center)? Seems the cost of this buying this chip is much higher than just buying the BTC outright for the user.

joeyspn• 11 years ago

And as the big ASIC miners get more efficient, your device will generate even less revenue.

I think that the period where plain bitcoin was seen as a mere store of value is about to end. We are entering a more exciting period which is the "bitcoin as protocol" stage, where sub-currencies (like Colored Coins, BitShares, etc) will be more valuable than bitcoin itself. And for this, tiny amounts of btc suffice.

This is why I think that Balaji and his team are taking the right direction. The goal is trying to make the system as much autonomous and frictionless as possible.

The first key here is autonomy: IBM has already forked Ethereum for its IoT with SmartContracts (ADEPT) [0], where for instance fridges could detect when you're running low of X and place an order for you. Generating your own tokens gives you greater autonomy and makes you relatively independent of the big mining operations/pools.

The second key here is friction: the current state of UX in bitcoin-world (and crypto in general) is extremely horrible and preventing the big adoption everybody in the space is aiming for. So building and integrating a chip that generates tokens w/o the user intervention is one way of bypassing this huge UX flaw. Maybe is not the most efficient way but it's the first serious take we've seen.

Extrapolating:

Why should a user have to configure an account so your browser can generate/read http requests/responses? The same way, it makes sense being able to generate/read crypto tokens. The value of those tokens are not in the current (or future) stock valuation of bitcoin, but in the valuation of the objects that the tokens will be associated with: financial tools, real estate, legal contracts, etc

[0] https://www.theprotocol.tv/adept-demo-ibm-samsung/

PS: btw I think Ethereum and distributed PoW/PoS is a more efficient use of the blockchain tech.

ForHackernews2• 11 years ago

Bitcoin-subsidized devices for the developing world.

Let's take advantage of vulnerable people by ripping them off with hidden energy charges! Viva Bitcoin!

URSpider942• 11 years ago

... and energy in the developing world is much more expensive and dirty than it is in developed nations, making it doubly dicey.

ForHackernews2• 11 years ago

The Internet of Things-That-Are-Secretly-Robbing-You

URSpider942• 11 years ago

I would love to see an analysis of how much BTC a user could generate in a day on his/her cell phone with only a 10% impact to battery life. I'm imagining that it's pitifully small today, and it will only be 10% of that number a year from now. Any more than that, and I don't see users accepting the trade-off.

steckerbrett• 11 years ago

An iPhone 5 battery is about 5 watt hours, ten percent of this is 0.5 watt hour. [0]

The most efficient mining chip I could find information about is the BM1384, which consumes 2.058W at the lowest power bracket. [1]

We would exhaust our 10% allotment in 15 minutes.

In those fifteen minutes our speed would be 8.25 gigahash per second, which would produce 0.000003542 BTC per day [2].

Our total income for 15 minutes of mining would be 0.00000003689583 BTC. [3][4]

At $237.7/BTC our 10% iPhone 5 battery life has been exchanged for $0.000008770 USD.

Assuming 0.17 USD power cost in the United States, the power cost would be 0.000085 USD. [5]

[0] https://en.wikipedia.org/wiki/IPhone_5

[1] https://www.bitmaintech.com/files/download/BM1384_Datasheet_...

[2] https://bitcoinwisdom.com/bitcoin/difficulty

[3]: This number isn't even representable in Bitcoin, which maxes out at 8 decimal places of precision.

[4]: The reward halves in 62 weeks though.

[5] https://en.wikipedia.org/wiki/Electricity_pricing#Price_comp...

bduerst5• 11 years ago

Following your example of using the most efficient miner available and ignoring heat, size, etc. restrictions:

Average cost of electricity for U.S. households is $0.12/kWh [0]

0.05 Wh = $0.000006 average cost

Net Profit = $0.0000008801 - $0.000006 = -$0.000005120

Net profit margin = -581.7%

[0] http://www.npr.org/sections/money/2011/10/27/141766341/the-p...

WayneS2• 11 years ago

That makes is pretty clear to me. They are not generating actual Bitcoins. Read the article again.

"we are less concerned with bitcoin as a financial instrument and more interested in bitcoin as a protocol"

johntb86• 11 years ago

And in 2 years of continuous mining it could generate $0.62 of bitcoin. Seems simpler to just ship it with the bitcoin preinstalled.

WayneS2• 11 years ago

Reading this I really didn't get the impression the chips would be generating actual bitcoins. Just currency-like tokens for doing resource management and proving that something occurred.

wmf4• 11 years ago

If you're going to create custom hardware but not going to mine actual BTC it seems like it would be much easier and more energy-efficient to use something like trusted-computing-based proof of existence.

ssharp2• 11 years ago

Related discussion from last week:

https://news.ycombinator.com/item?id=9537691

Maybe we can have "smart" electrical outlets that steals back any Bitcoins you mine off of someone else's electricity.

stephengillie• 11 years ago

My comment for a similar thread about Intel manufacturing Bitcoin mining chips (https://news.ycombinator.com/item?id=9537691):

I think you just landed on the "Free" version of future electronic devices. Imagine a terrible reality, not unlike today's videogame market, where every device, charger, lamp, TV, and box fan comes in "Free" and "Pay" versions - most manufacturers will have a mail back program, so you can return a broken "Free" item for a brand-new "Free" item. The "Free" items will mine Bitcoins and return all profit to the manufacturer.

Meanwhile "Pay" items will still be widely available from numerous online vendors. These devices will require you to enter your personal Bitcoin address, so they can credit you with their mining.

And thus the world will continue to be dominated by Whales, so named for the size of their bank accounts. The rich will be able to keep the entirety of their revenue, while the poor must subsist not only on the charity of the State, but also the charity of the Corporation.

zck• 11 years ago

This means any vendor can take a chip performing a normal function (say video decoding or networking), add 21’s BitShare technology, and thereby enable the chip to continuously generate revenue simply by being connected to power and internet.

I'd be interested in any estimates they have for how much this would generate if, say, included in a wireless router, or nest thermostat.

Also, the deal is either: you pay extra for a router that also mines you bitcoin, or you pay less for a router that mines bitcoin for someone else. In the first case, you have to then sell the bitcoin -- causing a lot of friction for a not-so-technical person to get a few bucks. In the second case, your device isn't your own -- you have a section you're not allowed to access.

cmdrfred• 11 years ago

make it like a mail in rebate, I bet something like half of those never get sent in so people who got the 'paid' version but don't claim the coins after X days have them sent off to the company anyway.

rdudek• 11 years ago

This sounds like a really evil item. Are the devices going to be labled as "subsidized by Bitcoin" or is Qualcom going to secretly include it with every SoC? Are we going to be able to turn that thing off?

I really don't like the direction technology is going. It all looks scary and downright depressing.

wmf4• 11 years ago

None of their bullet points seem to make sense. I guess their "secret" is "Crucial to this is the idea that bitcoin generated by embedded mining is more convenient — and hence more valuable — than bitcoin bought at market price and manually moved over to the site of utility." I don't know whether that will turn out to be true.

lechuga• 11 years ago

A somewhat more thorough asking of the same good question: http://www.reddit.com/r/Bitcoin/comments/36e8by/21dotco_a_bi...

I'd like to see this answered in some forum. It's very hard to get a more concrete sense of the vision without it being answered.

wmf4• 11 years ago

I don't know if it's even possible to answer such questions concretely. Everything hinges on transaction fees, and future fees depend on both the rate of transactions (which they propose to increase greatly) and the block size (which is being hotly debated right now). The case where their chip doesn't even mine enough satoshis to pay its own transaction fees isn't out of the question.

kens• 11 years ago

I can't see how this make sense. Even if you assume that it's useful for a device to have some bitcoins available, it seems much more efficient to either supply them when the device is created or download them on demand. The cost of building a mining chip into the device plus the expensive power consumption plus the difficulty of maintaining a network connection to access the mining pool seems way more than the cost of just providing the device with bitcoins.

A key point from the article is: "Crucial to this is the idea that bitcoin generated by embedded mining is more convenient — and hence more valuable — than bitcoin bought at market price and manually moved over to the site of utility." I just don't see that, especially if you assume bitcoins mined on the device are going to be much more expensive (because of less efficient mining and because of 21's overhead.)

RaphiePS• 11 years ago

I don't want to be overly dismissive -- I'm sure this is a huge engineering achievement -- but I just don't get it. A mobile phone, where battery life is precious and a big differentiating factor between devices, seems like the absolute last place you'd want to mine bitcoin. Manufacturers have spent years optimizing for battery life - why would they want to shoot themselves in the foot? What consumer in their right mind would buy a phone advertised as, "your battery will die much sooner, but hey, you don't have to use your credit card as much"?

Perhaps I'm wrong, and I'd love to be corrected. But I don't see the point.

hatu• 11 years ago

This is absolutely insane. You're basically getting $0.00000001 USD for cutting your phone battery life significantly.

larzang• 11 years ago

And the end-users's motivation for ever purchasing anything with is... off-setting short term costs with long term costs that make payday loans look like a fair deal?

paulbaumgart• 11 years ago

From what I gather, the Bitcoin mining is really just a way to incentivize device and chip makers to include 21's tech, in the short term.

I can think of two longer term benefits that only kick in once they actually get their tech widely distributed:

1) A low-power hardware wallet in your smartphone, smartwatch, etc, allowing people to make Bitcoin transactions from anywhere to anyone without needing to go through a middleman. Finally, true digital cash.

2) A Bitcoin private key on every Internet of Things device, which means that you'll be able to use some sort of fancy multisig side-chain algorithm (I'm no expert here) to verify ownership of all of your "stuff." This will disincentivize theft in a big way.

It's worth noting that, to make mining a viable way to bootstrap this whole thing, they need to be at the cutting edge of Bitcoin ASIC tech for multiple iterations of Moore's Law. Which is probably why they raised so much money.

zwtaylor• 11 years ago

I hope you're right, there _must_ be other components to their business model to warrant $116m in investment capital. At face value this all appears beyond foolish, though I'm rooting for them to make me eat my words down the road.

"21 Inc., formerly 21e6, announced it had raised US$116m in venture capital, the largest investment yet accumulated by a startup in the digital currency industry. 21 Inc.'s lead backers include American Andreessen Horowitz and RRE Venture, Chinese Yuan Capital, as well as strategic investor and chipmaker Qualcomm Inc."

http://cointelegraph.com/news/113668/bitcoin-startup-21-inc-...

jboggan• 11 years ago

I'd wager a decent fraction of their $116m is being held in Bitcoin. If Bitcoin could magically go to mass adoption that would stimulate a price in the range of $10-50k/BTC. Holding a few million $ of Bitcoin now and "doing stuff" that makes the Bitcoin more valuable has a higher expectation than trying to build sustainable business model around the Bitcoin ecosystem.

geomark2• 11 years ago

I think your second point is getting closer to where 21 is actually going. If you look at some of Balaji's tweets from a few weeks ago he was talking about 4-factor authorization. Financial fraud is hugely expensive, a huge market opp for a solution. Maybe 21 is working toward a bullet proof system/gadget that will eliminate fraud. Maybe BTC chips in every device is part of that solution.

pistle• 11 years ago

After the gold rushes were long gone, people still offered to let people rent a shovel, a pan, and buy a map to go try to find their treasure by panning in a river where most everybody knew there was absolutely no balance to the time+effort:value ratio. But, come they did.

jacquesm• 11 years ago

This would require a significant overlap between 'smartphone' owners and 'people not so good at math'. They may be on to something.

Animats• 11 years ago

This makes no sense. This is what a current Bitcoin mining operation looks like.[1] It looks like a low end data center. Few cables, because the miners only need to communicate when they find a block or are getting new starting points. Power and cooling costs are a huge issue in Bitcoin mining. Most profitable Bitcoin mines are in cold places. This one is in Sweden. There are bigger ones in China. There's no way a small, low-powered Bitcoin miner can make money today. That era ended years ago.

The way Bitcoin mining works, you don't get anything unless you win an entire block. That happens about once every 10 minutes over the whole Bitcoin ecosystem. If they're talking about "a constant stream of satoshis", they mean you're a slave of their mining farm, working for them and maybe getting paid some pittance by them.

Is this thing a hoax? They're on Reddit, Twitter, and Medium. They have a web site with no useful information. (https://21.co/) They claim to have a development kit, but have no pictures or specifications. There are no numbers about this, just PR blithering. It looks like another Bitcoin-related scam. It's been only few months since the last big one, Paycoin.[2]

[1] http://www.datacenterknowledge.com/archives/2014/07/10/massi... [2] https://bitcoinmagazine.com/20050/death-paycoin-employee-vid...

silverpikezero2• 11 years ago

Yes, they are a legitimate company. They showed up on the Bitcoin radar back in Nov 2013 [1]. They started as a private mining consortium with their own chip design, and now presumably they want to pivot into a consumer-facing business.

[1] https://bitcointalk.org/index.php?topic=334759.0

dublinben• 11 years ago

In other words, their own mining is no longer profitable, so they'd rather sell snake oil to the easily-duped Bitcoin community.

IkmoIkmo8• 11 years ago

It's not a Hoax, they're the real deal with very solid co founders, top ranking VC backing and a top of the line board. All mainstream stuff. For example their CEO, or one of their backers in Andreessen Horowitz.

The whole mining idea is complete rubbish. I have no clue how these two facts are compatible but they are.

It's very very strange. I can see how a hardware wallet on a dedicated chip is important, and how blockchain authenticated devices with unique private keys has use cases. But you don't need mining for that. It's still a mystery to me what the idea is.

marincounty2• 11 years ago

The founders should be here explaining their company? I'm not sure what they are trying to accomplish; even after looking at the Job posting qualifications. I have a vague idea, but still confused.

I know it's difficult to explain new technology, but just give it a shot? Maybe they don't know they don't know they are on HN, or I just got conned out of an email address?

javert2• 11 years ago

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.

This is pure marketing fluff. They should be embarassed by this.

Plus, there are tons and tons of capable PhDs and non-PhDs from lots of other schools.

Moreover, as others are saying, it doesn't make sense to waste electricity to mine bitcoins in small quantities.

edit: Given that it doesn't make sense, does anybody know what they are really doing?

mikekchar• 11 years ago

Looking at their admittedly bad website, I am thinking the following:

Let's assume that the next big thing is not centralized services, but distributed ones. We've already gone through periodic waves of P2P mania. Even Bittorrent got a fair amount of VC. I think it is not unreasonable to gamble that in the next 10 years distributed systems and protocols will dominate and client/server will fall into disuse.

Of course it might not happen, but if it did, where would you need to position yourself in order to be able to profit massively from it? There are several major problems with P2P applications. For example, you need coordination, authentication and resistance to bad players.

Bitcoin has a reputation for having solved many of these problems for its domain. Although it might not be the best way to solve all of these problems (specifically proof of work may not be optimal for many problems), imagine that you are trying to sell your idea to a VC company. Can you come up with a convincing story about how this technology can be used to solve most of these problems? Even on HN there are a large number of people who think that the Bitcoin implementation of a block chain is the solution to practically every distributed authentication/coordination problem.

Now imagine building a chip that would enable the use of this technology in every day equipment. You could look at it as the modern day equivalent to the FPU or GPU. It is distributed authentication/coordination hardware acceleration. As such, if the world does go to a distributed model of communication/computation, it will practically be required. As the defacto standard, every single device on the planet will need to include your chip.

Are they really thinking to mine bitcoins? There are some potential applications, perhaps. For example back in the day Microsoft proposed that there be a "postage fee" for email. This would make it expensive for people to spam freely. Imagine a "postage fee" for distributed services, like authentication, whatever. The fee needn't be large and the idea is that the device could mine enough BTC to pay for average usage. Anybody who wanted more would have to pay for it. But Bitcoin does provide a convenient method for doing these kinds of really micro payments.

Note: I think it's an absolutely stupid idea that can't work due to the nature of service fees once new BTC runs out, but I can well imagine a VC company completely overlooking this detail.

In any case, I can totally see the potential for $100 million or so investment. I think the web page may intentionally have a lot of fluff -- things that are really improbably or impossible but are there because some key stakeholders expect to see it there. I think the challenge for them is that they are walking into an arena very early where there is a total vacuum of applications that are currently being used. What they will need to do is not only build the hardware infrastructure but also convince a lot of people to write applications of the infrastructure so that everybody wants it. Probably this is one of those instances where you are better off being second or third to the market (like, for example, the Apple Newton).

poslathian3• 11 years ago

It's funny to me that I had to scroll to the actual last comment to find what I suspect is the right answer.

javert2• 11 years ago

Thanks for your thoughts.

If there is some advantage to devices having a few satoshis, it would be easy to just send them a few satoshis. (Or install a private key that lets them draw a few satoshis from an account you set up for that purpose.)

In other words, you don't need the device itself to do the mining.

And it's always going to be cheaper to produce satoshis in massive mining farms than to do it in tiny chips in embedded devices---so you would always economically prefer to give satoshis to devices, not make them mine the satoshis themselves.

brasky2• 11 years ago

The company is named after the max amount of bitcoins so I think the VCS would get that bitcoins are limited.

drcode2• 11 years ago

edit: Given that it doesn't make sense, does anybody know what they are really doing?

I'm guessing they're chasing after the vague idea that money, energy, and computation are all somewhat interchangable and building chips that offer low-level features to trade between these, so that a device can exchange any of these three for the others, i.e. "I'll do this computation for you for 0.0001 bitcoins" or "I'll give you 5 watts of power if you calculate this for me" etc etc.

Still not a very convincing idea.

silverpikezero2• 11 years ago

I am extremely glad that most comments here see the inherent craziness of this idea. I am a hardware designer who participated heavily in mining since Jan 2011, and gave up completely on Bitcoin in summer of 2014.

The big problem that Balaji is completely ignoring is that SHA256 cores implemented in silicon have extraordinarily high power consumption relative to their size (mm2). This is due to the incredibly high signal switch rate inherent to implementing avalanche-style ciphers [1] in hardware. Perversely, most modern semiconductor processes optimize for static (leakage) power, since modern silicon designs are more vulnerable to this than to dynamic power. No rational semiconductor maker will want to include this IP on chip, because it will drastically complicate the power distribution metal layers. Additionally, it will require more expensive packaging, since you will need many more power and ground pins to source/sink the required current. I know this first hand after building a mining ASIC myself. I would venture a guess that most SoC chips would cost significantly more due to the extra engineering time and packaging cost needed to include this IP.

This entire concept is a non-starter for me.

[1] http://research.neustar.biz/2012/02/02/choosing-a-good-hash-...

bryanbuckley• 11 years ago

I know it's not an actual mining asic/HW module, but didn't some SoCs support sha256 hw acceleration at least 3.75 years ago?

https://android.googlesource.com/kernel/omap/+/android-omap-...

lukifer• 11 years ago

Out of curiosity: what made you give up on Bitcoin? (I'm still bullish on crypto-economies in general, but am concerned that the electricity costs of PoW creates a downward price pressure that's unsustainable.)

IkmoIkmo8• 11 years ago

Why would that be? The maximum PoW can depress the price is the inflation rate. Nobody will pay $1 for electricity to generate <$1 of bitcoin. And the inflation rate of bitcoin is set to drop below that of any large currency like dollars, euros, yen.

In other words, the money supply that causes inflation (downward price pressure of currencies) is by design lower than fiat currencies. It's one of the key things supposedly we're not ought to be concerned about with bitcoin, so far I see no reason to think otherwise.

wmf4• 11 years ago

Perhaps power density could be "fixed" by padding out the circuit to take more area. This would obviously increase cost, but probably less than changing the overall chip design.

nilnullzip• 11 years ago

There are many degrees of freedom in chip design: speed, power, real estate, slew rate, clock rate, etc. The core can have more moderate power density (trading off real estate and speed) if that's what is needed in the application. Probably the figure of merit that is most important is energy/hash, not circuit density or speed.

listic• 11 years ago

I can't believe they actually believe in the 'device that pays for itself' type of scenarios. Are they that stupid or outright lying?

drcode2• 11 years ago

I by no means would call myself an expert on Bitcoin, but I did coauthor a book about Bitcoin.

All I do when reading stories about 21 Inc is parse every sentence very slowly saying to myself "What is it I'm missing that turns this from a terrible idea into a good one?"

I have yet to discover such a sentence... I hope I'm wrong and will still read it at some point.

waterlesscloud2• 11 years ago

That's what I was thinking. I've been pretty into cryptocurrency for a good while now, out on some pretty distant frontiers at times. And the mining aspect of this makes no sense at all to me. I don't get it.

davidgerard• 11 years ago

I think that's the bit where they're selling snake oil to the lower quartile of VCs. You and I know it's completely ridiculous, but they don't.

slapresta• 11 years ago

I guess their plan is to convince third parties that this is a great idea? Lazy businesses wanting to get into Bitcoin can be immensely more profitable than Bitcoin itself.

geomark2• 11 years ago

Look at tweets by Balaji https://twitter.com/balajis I think there may be some hints in there.

juliangregorian• 11 years ago

I really find the phrase "embarrassingly parallel" obnoxious; nice to find out (on the Wiki link) that I'm not alone.

danbruc• 11 years ago

How do you get people to invest in such an idea and write such excited statements? Almost nothing they say makes sense. Mining on battery powered devices. Abusing the block chain as a database. Making other people pay for you.

tomasien• 11 years ago

These comments remind me of the crapping-on uBeam took on HN after a few people decided, upon a cursory glance, that it was theoretically impossible and ridiculous.

https://news.ycombinator.com/item?id=8542091

We still can't be 100% sure if it's ridiculous or not, but all signs are pointing to not. So assuming Balaji et al are acting in good faith and aren't scamming their investors (one of whom Balaji is a partner in so that would be weird) this is cool and I can't wait to see what it does and where it goes.

waterlesscloud2• 11 years ago

It's not so much a matter of deciding it's ridiculous. It's that the numbers for the mining part are off by several orders of magnitude.

For that to work at all, they'd have to have some technology that revolutionized bitcoin mining at the most fundamental of levels, and they haven't indicated that they do.

That's what's so weird about this.

notahacker• 11 years ago

These comments reminded me of the crapping-on Colour took on HN, not even on the grounds of theoretical impossibility of the product but simply the buzzword-laden me-too nature of their pitch. Turns out the naysayers were right: whilst the team weren't intentionally scamming the VCs that backed their remarkably large pre-product fundraising efforts, the world's first stealth social network might as well have been a scam for all the traction it achieved.

I'm having to hedge my scepticism on the basis that I know I know barely any more about bitcoin mining technology than the average layman, and VCs can bring in highly skilled specialists for their due diligence, especially for investments of this magnitude. But when a press release fails to acknowledge the level of technical breakthrough they'd need to have achieved for their product to be viable, and instead launches straight into a series of theoretical monetisation strategies of varying degrees of plausibility, I think the cynicism is entirely warranted.

If they actually have a team of engineers that could develop chips with far more computational power in relation to their size and energy requirements than anything else on the market, you'd have to wonder why they'd think persuading consumers to put Bitcoin miners in their pocket was the most promising avenue to monetise.

NeutronBoy• 11 years ago

If they actually have a team of engineers that could develop chips with far more computational power in relation to their size and energy requirements than anything else on the market, you'd have to wonder why they'd think persuading consumers to put Bitcoin miners in their pocket was the most promising avenue to monetise.

Basically, if they've got the tech to do this, they could get rich just by selling that tech, and not screwing around with Bitcoin

comrade1• 11 years ago

I would like to remind everyone of hn's policy against negativity and by extension of negative posts. Or does that only apply to YC related posts?

lotharbot• 11 years ago

HN's policy is against "gratuitous negativity".

It's OK to be critical of an inefficient idea.

LandoCalrissian• 11 years ago

Basically what I'm reading is it probably would have been more prudent just to light the 116 million dollar investment on fire and not waste everyone's time.

These are terrible ideas.

super-serial• 11 years ago

No don't burn it, we should piss it away...

You see my idea is to install hydro turbines inside men's urinals at major corporations. Then everyone will piss on them generating free electricity... that electricity powers work computers during non-office hours to mine bitcoin.

It's sort of like the enterprise version of this idea. Maybe I should start talking to VCs to raise $200 million? B2B startups are hotter than consumer-facing ones right now - so I should ask for more.

jackgavigan• 11 years ago

It's be interesting if, instead of Bitcoin, 21 planned for these chips to be used to create a new cryptocurrency.

poslathian3• 11 years ago

Perhaps to provide an authentication a security layer for IoT...this sounds like a story you could raise 100M with. See also Vernor Vinge and the SHE

brasky2• 11 years ago

That is the only part that makes sense. The mining makes zero sense but having a secure wallet in everything sounds like a good idea.

andrewstuart• 11 years ago

Is bitcoin relevant any more? The hype level seems to have crashed from former heights.

yifuguo• 11 years ago

It's rather annoying that the mining conversation always gear towards profits.

mining centralization/decentralization is the importance here.

What I rather worry about is will you be able to control which pools these chips will be allowed to be pointed to, do the users have control over these matters?

personally I rather have 1b+ small chips all over the place in devices than a few $10m mining farms spread around the world.

drazvan• 11 years ago

What if they actually planned this and fine tuned their ASICs so that they would never be able to actually generate enough satoshis to go above the dust limit? They could tell their users: you've generated 1 satoshi this month, just 5459 more to go ... that's only 454 years :). "Honestly, we want to pay you your share, but the Bitcoin network won't allow it because it's below the dust limit ... trust us, you'll get paid in 454 years".

So they can make them mine fast enough to make a difference in terms of hash rate but slow enough to never actually reach the payout limit - so they could constantly owe their users very small (unpayable) amounts.

If the idea is to mine slowly, it can be done on a CPU. Most smartphones also have a GPU on board, so they could mine faster than a CPU. And the chips are already in there, you wouldn't have to buy a new phone/chip for this.

Finally, people seem to misunderstand how mining works ... you can't mine a single satoshi, you either find a block or you don't, so you either get the 25 BTC (currently) reward + transaction fees or you don't. The pool distributes the load and the reward, so there would still be a "funding" transaction from the pool to the user - it's not like their ASIC can generate 1 satoshi on board, it can lend its hashing power to the pool and receive 1 satoshi (actually 5460+ satoshis, see above) for their effort from the pool.

A Bitcoin miner in every hand

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