Bitcoin company 21 will launch a new product this week - a Bitcoin "mining machine" ( a computer that produces Bitcoin gold coins ) , which is also one of the most anticipated products in the Bitcoin world. In order to develop this product, 21 has raised $ 120 million ( about 13.347 billion yuan ) from well-known investors including PayPal co-founder Peter Thiel and well-known investment companies such as Andreessen Horowitz . According to the company's financing records over the years, this amount of financing has set a record. So when 21 announced the news this week, many people were puzzled. For just $ 399 ( about 2,535.88 RMB ) , users can buy this small Bitcoin computer equipped with a custom chip and use it to produce Bitcoins. Of course, the number of Bitcoins that can be produced is limited. In fact, according to one calculation, the computer can only produce about 10 cents ( about 0.64 RMB ) worth of Bitcoin in a day if it runs non-stop. In addition, the ability to produce Bitcoins is related to where you live, and the cost of electricity consumed for production may be far higher than the value of the Bitcoins produced. 21 's decision makers believe that the ability to generate bitcoins will become standard for all digital devices in the future, just like today's Wi-Fi chips. In the future envisioned by Bitco, virtual currency will become the main force of electronic transactions, and traditional computers are not enough to support all of this. If 21 's technology is established, this computer will make the dreams of many Internet experts come true. It can provide a practical operating system for small online services and mobile payments. For example, this technology can support jukeboxes that automatically pay and cameras that automatically renew online storage. In order to realize this vision, 21 has developed some very refreshing technologies. But it seems that the blueprint of virtual currency it envisions itself has certain flaws, so big that I doubt whether the company's new technologies can ultimately play a role. A chip that turns electricity into money You may have heard this in an advertisement: Send a text message to a certain phone number and you can donate $ 10 to a specific charity . In this transaction, the phone operator acts as a middleman and includes the $ 10 in the donor's phone bill next month. This service brings a lot of convenience to customers. If customers want to donate, they don't need to take out their credit cards from their bags or worry about their credit cards being stolen. The technology behind the Bitcoin computer is similar, but more complex. Basically, you can think of it as an intelligent "hacker" that keeps adding charges to your electricity bill. The Bitcoin computer has a "mining" chip that performs complex mathematical operations to generate new Bitcoins. These Bitcoins have actual economic value, but the process of producing them is not free, and the chip consumes a lot of electricity. The 21 Bitcoin computer is not designed for those who want to become professional Bitcoin "miners". There are more mature products on the market suitable for professional "miners". On the contrary, the company believes that the Bitcoin computer has the ability to produce the equivalent of a few cents of Bitcoin every day, which will give the company a trump card and the opportunity to open up unknown new markets in the future. Automatic pay-per-view jukebox The device 21 is selling today isn't actually the version of the technology it plans to eventually make available to the general public. Instead, it's a demonstration of 21 's technology, hoping to convince developers to build apps using 21 's chips. Over the next few years, 21 expects these chips to get smaller and more affordable, and to be built into a wide variety of third-party devices, just like Intel chips are today. Imagine buying a small speaker that acts as an ad-free jukebox. You plug it in, click on any song, and it starts playing automatically without you having to pull out your credit card to pay for it. The jukebox automatically generates the required fees for each song played and sends the bill to the copyright owner. The average consumer doesn't have to think about paying, or even understand how the payment mechanism works. Other products using this technology will be able to operate in a similar way. There may be a camera that automatically buys online storage space to continue taking photos and videos when the internal storage is low. There may also be a tablet that can automatically detect Wi-Fi networks available for rent and buy Wi-Fi access rights with a few pennies worth of Bitcoin . In addition, perhaps businesses will come up with some other clever ways to use virtual currencies to make consumers' lives more convenient. At the same time, as the number of digital devices in people's homes and workplaces continues to increase, 21 's technology can also help solve the problem of "orphaned devices." In this case, the original developer company stops supporting and maintaining certain digital devices, leaving them in a damaged or worse, unsafe state. If users pay a small amount of Bitcoin as a repair fee for each such "orphaned device", no matter how old the device is, 21 will provide a fund for the original manufacturer to continue to support and repair the device. Plan to actually implement online small amount payment So, you may still wonder why people would buy such a strange "printing money" chip to replace the actual financial system to pay for daily transactions? Here are two major reasons: One reason is that for some applications, it is dangerous for users to enter their credit card information into a certain digital device. In response to this, the bit jukebox mentioned above will not have a keyboard or screen. It will be much more convenient if users can just plug in the power supply and let the jukebox start playing music. A more fundamental problem is that the rules on handling fees in the traditional financial system make small transactions very uneconomical. In the credit card spending mechanism, the smaller the transaction amount, the greater the proportion of the handling fee in the transaction amount. This is why we rarely see anything cheaper than the 99 cents ( about 6.29 yuan ) song in the iTunes store in the online store. In the economic dimension of less than $ 1 , the credit card payment function is almost unable to play its role. Microtransactions are where 21st Century can work its magic: the standard Bitcoin network may not be a good platform for micropayments, but it is an extremely open software platform, and the company has developed new technology that makes micropayments within the Bitcoin network more efficient than any other online payment technology. Reasons users might not like using Bitcoin for micropayments Technologists have long dreamed of making micropayments more convenient and practical. Many people have tried to build some micropayment systems, but so far no system has really explored the feasibility of micropayments. The investors behind 21st Century Business Herald are actually making a bet that Bitcoin will become the key technology that will eventually make this concept possible. Many people have studied this area for a long time. Internet theorist Clay Shirky wrote an article in 2000 to explain why online micro-transactions have never been able to develop further in the tide of Internet development. Since then, many people have explained this topic, and Shirky has written many subsequent articles on this topic. In short, Shirky says that the reason previous microtransaction systems failed was that they didn’t please users. “There are many factors that determine whether a user will buy a product, and the decisive factors may be just a few small details. Sometimes the decision is not based on the appearance of the application interface or the time it takes to download it, but more on the user’s decision in the moment of purchase,” Shirky wrote. “Micropayments, like all other payment methods, need to allow users to compare prices. Is this thing worth X value? Is that thing worth YY value? Based on this fact, although the product is constantly being optimized, the minimum transaction cost in the user’s mind remains the same. On the surface, 21 's micropayment technology may change the way users think about transaction costs. After all, when they want to buy a new home appliance, they are unlikely to spend much time thinking about how much energy it uses. So it seems that users will not have to worry about the new generation of digital devices that can convert electricity into money? However, if you think about how this digital device works in real life, it is clear that there are still great difficulties in promoting this technology. Imagine that in the future your home is filled with household devices with 21 companies' bitcoin "mining" chips built in, and at the end of the month you suddenly find that your monthly electricity bill is $ 20 ( about 127.11 yuan ) higher than you expected . Maybe it was a hot month and your air conditioner was running overtime. Maybe your Bitcoin device was hacked and bad guys stole your electricity to produce Bitcoin for themselves. Or maybe your teenage son recently bought a new device from a brand that is not on the Bitcoin company list, so it produced a lot of Bitcoins while consuming more electricity than promised, and the additional costs were paid back to the original manufacturer. The problem is, you never get the answer, and there's no easy way to find out. It's not like your electric bill, which breaks down how much energy each appliance uses. If you use a Bitcoin device, you're forced to start measuring the energy consumption of each appliance in your house, a computational hassle that 21st Century should consider eliminating. In practice, few people worry about this. It only takes a few stories about Bitcoin devices being hacked or overcharged by unscrupulous manufacturers to make users decide not to use devices with Bitcoin "mining" chips. Bitcoin chips will become less and less effective There is also a big problem with 21 's technology: Bitcoin mining hardware will quickly become obsolete. And the Bitcoin world is also highly competitive, with all Bitcoin mining chips around the world competing for the same fixed customer base. When a newer, more efficient chip comes out, the old Bitcoins produced by the original slower chips will quickly begin to depreciate. When you buy a brand new 21 company device, it can consume 70 cents ( about 4.45 yuan ) worth of Bitcoin electricity to produce 1 dollar worth of Bitcoin. But a year later, as the old Bitcoin depreciates, the same production of 1 dollar worth of Bitcoin ( about 6.36 yuan ) may consume 1.2 dollars ( about 7.63 yuan ) worth of electricity. Similarly, two years later, the electricity consumed by 1 dollar of Bitcoin may be worth 2 dollars ( about 12.71 yuan ) . Therefore, devices with built-in Bitcoin "mining" chips may need to be updated every few years, otherwise the old devices will waste more and more electricity in users' homes. Of course, equipment that can be used for several years may still be useful. But in this case, it may be more effective to put pre-generated bitcoins directly into the device or take a more effective approach, so that the manufacturer provides free bitcoin generation services, and users only need to pay an additional $ 10 or $ 20 to buy the equipment . In fact, almost all users prefer transparent pricing methods, and the method of charging the cost of fees to the electricity bill runs counter to the word "transparency".
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