By
Bhushan Akolkar
August 29th, 2022
Bitcoin startup 21 Inc. is in plans to develop new technology that will promote the usage and mining of digital currency.
San-Francisco-based bitcoin startup 21 Inc. has raised over $116 million of venture funding, which is a record investment in the cryptocurrency sector so far. The company plans to use these funds for creating a new technology that is expected to facilitate worldwide bitcoin adoption and promote bitcoin mining.
The investors included such leading industry players as PayPal co-founders Max Levchin and Peter Thiel, RRE Ventures, Andreessen Horowitz, Zynga co-founder Mark Pincus, Expedia CEO Dara Khosrowshahi, eBay co-founder Jeff Skoll, Dropbox Inc CEO Drew Houston and others.
Under the company’s new business plan, 21 Inc. will inset ASIC chips for bitcoin mining into such daily devices as routers, gaming consoles, USB battery charges, toasters, set-top boxes and chipsets.
21 Inc. has partnered with Qualcomm and Intel to work on the development of so called “split chip” technology for the Internet of Things (IoT) enabled devices. Besides, the company is seeking for further partnerships with CISCO, Facebook and IBM.
21 Inc. plans to attract new customers by offering them these devices for free in order to demonstrate how easy it is to generate digital currency.
The users of such devices will obtain revenues of 25%, while the remaining 75% will be taken by 21 Inc. According to the firm, it expects high initial earnings if compared to zero revenue growth during first two years at Facebook and Google.
Meantime, the price of the electricity necessary for mining bitcoins is much higher than 25% of the bitcoin revenue the users of these devices will get. Still, people will continue paying electricity bills whilst 21 Inc. will receive its 75% of bitcoin profit.
Many companies have to understand that while they are quick to enter the market for smart devices, it is quite difficult to exit. While the users of personal computers and smartphones change their devices once in 2-3 years on average, they will not replace for example LED bulbs or door locks so often.
The problem is that we tend to change our toasters less often than bitcoin miners have to change their ASIC chips. So, the digital currency mining by IoT devices will then become less economic just because the installed base will not be replaced often. However, 21 Inc. doesn’t have to pay for the electricity, the cost that bitcoin miners have to reduce by constantly upgrading.
It is unlikely that people who purchase devices for their main functions will invest money to maintain their secondary functions, moreover, given the fact that they will get revenues only marginally.
