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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 l
by paulbaumgart 11y 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 11y agoI 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-reveals-industry-record-funding-of-116-million-dollars http://cointelegraph.com/news/113668/bitcoin-startup-21-inc-...
- jboggan 11y agoI'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.
- geomark 11y agoI 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.