ADVERTISEMENT
Advertise with BNC

21 Bitcoin Computer – the Macintosh of Bitcoin

It looks like the 21 Bitcoin Computer began shipping recently, for us$400 apiece. We also got a few extra bits of information from the 21.co website, about some features of the machine and the ecosystem in general.

Bitcoin Computer

Since guessing the business model of 21 Inc seems to have been everyone’s favourite activity over the past six months, let’s not waste any more time and dig right in.

First of all, we’ve got some photos of the actual machine. The packaging looks good, the mining component of the device looks sleek and elegant, while the actual computer is a standard Raspberry Pi 2, according to the FAQ.

The 21 Computer’s mining chip spec appears to be 0.16 Joules per Gigahash,50 Gigahashes per second. At the moment there doesn’t appear to be any upgrade / swap options for the machine.

This seems to put it in the same category as the Antminer U3 Batch 2 – currently selling for $20 and clocking in at 63GH/s. Comparing it to existing solutions, the energy efficiency seems rather odd. It appears to be roughly 6250 MHash/J, while the top performing AntMiner S7 comes in around 4000 MHash/J. This would seem to suggest the chip is underclocked to be more efficient.

The value of the whole package come in a little under US$100, with the Rapsberry Pi 2 along with all the extras selling for about $70 at the moment. But, the hardware isn’t everything, so let’s look at what else we get with the 21 Computer.

21 Comp


It seems strange it doesn’t come in a case, especially given that their setup steps seem to indicate that this might cause some problems.


It looks like 21 Inc’s software is well featured. The CLI looks exhaustive, you can run a full Bitcoin node, and you have your wallet. There are reports of people running projects like Open Bazaar on the device just fine.

All in all, it looks like the software is the meat of the package. I’ve heard a number of people are more interested in the software component than the whole package itself. Luckily, it seems that one can get the open source software without having to buy the 21 Computer:

Beyond the hardware and software, it looks like 21 Inc has some responsive customer service, at least for now during the launch week, which is great to know. If people get into Bitcoin because of this computer, it could be a very valuable service to make sure they stay interested.

The 21 website has a few interesting tutorials on what could be done with the software. There is also a $200 tutorial bounty, so we can expect to see more articles popping up over time.

We now come into some more interesting nuggets of what could either be something really insignificant in the future, or perhaps will end up as a starting point for something more insidious.

It seemed that from the very beginning, 21 Inc was aiming to sell everyone on the idea of combining Bitcoin mining with the Internet of Things. However, this appears to make no economic sense whatsoever. Mining dust wouldn’t even cover the average transaction fee on the Bitcoin network, much less amount to anything useful.

However, in their tutorial on micropayments, we can see that the encouraged method of transferring money between individuals won’t be the Bitcoin network itself, but "BitTransfers," which looks like a fancy way of saying "shared ewallet transfers." In other words, 21 Inc is building itself up to be something like CoinBase for the IoT world – settling peer-to-peer transactions using a centralized database.

21 Inc 150"The general concept behind off-chain transactions is to avoid the inefficiency of writing to the blockchain until requested by the user."
— – 21 Inc

To load the wallet, one would of course mine the coins using the 21 Computer. This area could certainly be spruced up with some marketing talk, as we go into the mining tutorial and "buffered pool mining."

We start with a lesson about the transition from CPU mining to pool mining, as one couldn’t realistically mine a block by themselves. Pooled mining reduces the reward variance – without the pool, you either get a whole block and 50BTC, or no block and no reward. Pooled mining allows you to get a fraction of the reward, but at a more regular pace.

Afterwards, we seem to get what 21 Inc wants to sell as the vision for its computers – "redecentralizing Bitcoin," by the use of "millions of mining chips worldwide,” that each generate a small stream of bitcoin. This view is based on a belief that ASIC chip development will start following Moore’s law in the near future.

However, since the default way to mine on the 21 Computer, and possibly the only way without modifying the software, is to connect to 21 Inc’s pool and receive the dust rewards in your 21 shared ewallet, it’s not really a decentralization of mining as much as it is adding another central server to the equation.

Perhaps if we would instead see P2Pool on the device, we could call it an effort in the right direction, but then you wouldn’t be able to solve the mining variance problem very well, nor would you lock people into your walled garden of an ecosystem.

In the next section we get another new buzzword, "Buffered Pool Mining". 21 Inc also believes that if you’re mining in a pool, you will have to wait:

21 Inc 150For the pool to mine a block before you get paid;
To mine enough coins to reach the minimum withdrawal threshold;
For the block to mature over 100 confirmations before you can get paid;
To earn bitcoins before you can spend them again if you run out;

Instead, 21 Inc essentially combines its shared ewallet with the circa 2011 idea of Pay-per-share. As described in the Bitcoin Wiki:

The Pay-per-Share (PPS) approach, first described by BitPenny, is to offer an instant flat payout for each share that is solved. The payout is offered from the pool’s existing balance and can therefore be withdrawn immediately, without waiting for a block to be solved or confirmed. The possibility of cheating the miners by the pool operator and by timing attacks is thus completely eliminated.

This method results in the least possible variance for miners while transferring all risk to the pool operator. The resulting possibility of loss for the server is offset by setting a payout lower than the full expected value.

This begs the question of how hardened the 21 mining pool is, and how it would fair in an attack by a state-of-the-art mining rig.

We also get one more interesting feature, which is essentially Bitcoin, lets say, nanolending:

21 Inc 150“Finally, you do not need to send N hashes to the server before getting N hashes worth of mined bitcoin. That is, by invoking 21 mine your 21 Bitcoin Computer can receive bitcoin in advance of future mining at the expense of a small asymptotic slowdown in the rate of bitcoin streamed to your device.”
— – 21 Inc

The tutorial concludes with: ”The basic idea is that buffered pool mining is a new way of getting bitcoin: not by buying huge quantities slowly for investment purposes on an exchange, but by mining tiny quantities rapidly for programming purposes at the command line, rate-limited by a mining chip.”

I guess someone forgot the middle-ground; being able to buy a small amount of BTC, for example by phone; getting small amounts of coins for free, through facets or by signing up to various wallets; or if you’re really a developer, using TestNet Bitcoins.

As someone that frequents the Bitcoin-related subreddits, I noticed a large amount of submissions about the device recently. That’s to be expected when a new, big product launches and everyone gets their hands on it. However, some of the submissions and discussion appears to be somewhat astroturfed. Submissions titled "Whoa" that aren’t some Shiba Inu memes generally don’t do very well on a crypto subreddit. Cynical quips usually stick better, you rarely see people talking in bold (1, 2), and hardware is rarely inspirationally compared to some major milestones in commercial computing. Even the self-post appear a bit defensive (1, 2). My money would be on at least some of the sentiment being not entirely as grassroots as it might appear in the first place.

Coming back to the title of my post, 21 Bitcoin Computer to me looks like a Macintosh Computer for Bitcoin, an overpriced, underpowered piece of hardware coupled with some decent software. It appears to be building the roots of a walled garden of closed-loop wallets and related ecosystems.

If you’re a developer, you can do better, both in terms of mining performance, computing speed and price for a throwaway machine for testing. Their software and related articles appear to be the main piece of value added.

For $400, even for a "dev kit" as it’s sometimes advertised, I would still rather buy some BTC – even by "buying huge quantities slowly for investment purposes on an exchange" – which would still be a smaller investment than the machine, instead of committing to mining. But perhaps one of the comments on Reddit sums it up, "the investment will get you to commit to using it."


ADVERTISE WITH BRAVE NEW COIN

BNC AdvertisingPlanning your 2024 crypto-media spend? Brave New Coin’s combined website, podcast, newsletters and YouTube channel deliver over 500,000 brand impressions a month to engaged crypto fans worldwide.
Don’t miss out – Find out more today


ADVERTISEMENT
Advertise with BNC
ADVERTISEMENT
Advertise with BNC
BNC Newsletters: A weekly digest of the most important news and analysis.
ADVERTISEMENT
Advertise with BNC
Submit an event on bravenewcoin.com
Latest Insights More
ADVERTISEMENT
Advertise with BNC