- I’ve long been a naysayer to Bitcoin, even at the peak.
Don’t get hung up on mining chips only making insignificant profits for end users.
- It’s not about making money for end users.
- The business model is subsidizing connected devices.
In this case, so called “mining chips” represent a larger class of “subsidy chips” that could forever change the pricing of electronics.
- But until Bitcoin, it was unclear how grid computing could make money.
- Bitcoin mining (how Bitcoin transaction get cleared) changed that enabling grid computing to turn a profit.
Apropos, this prompted rogue developers to embed mining code in trojan-like games.
So, if Bitcoin is the first and not the last example of profitable grid computing, then it doesn’t matter that 21.co’s first chips target Bitcoin.
What matters instead for these chips is only where and why:
- Where: any connected device.
- Why: to finance device cost or complementary subscription fees.
- A new connected refrigerator may come with subsidy chips.
- It’s also notably cheaper than the non-connected models.
- Of course, the subsidy chips produce income for the manufacturer, but use more power at home.
- Extra money paid to your energy provider comes to represent one leg on what effectively amounts to the financing of your refrigerator.
Finally, if and as your house becomes green energy enabled this cost may never reach your wallet.
Long term, if all this plays out, here’s what I expect: