• I’ve long been a naysayer to Bitcoin, even at the peak.
  • Still I think 21.co (fka 21e6)‘s embedded mining chips have great disruptive potential.

  • 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.

  • Distributed computing projects like Folding@Home have long established the power of grid computing.

  • 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.
  • For example:

    • 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: