
It looks like Intel is developing Bitcoin mining chips - mrb
https://plus.google.com/+MarcBevand/posts/9waJsLiMXfZ
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ssharp
All for the "benefit" of mining Bitcoin.

The idea is to stick these chips into household applications (e.g. USB
chargers), give the appliances out for free, stick the electricity bill on
you, and give 75% of the Bitcoin revenue back to the parent company.

Yep, a free USB charger that you amortize over its entire use, at many
multiples of what it should cost. It's great for people who love playing a
guaranteed losing shell game between buying electronics and electricity.

I'm becoming more and more convinced that it's impossible to profitably mine
bitcoins without screwing someone else in the process. The trick is to screw
them as long as possible without them knowing.

~~~
shabble
The scenario you describe is malicious because people don't expect a charger
to have "features" which consume large amounts of power without benefit, but
it does make me wonder if such tech could be incorporated into electrical
items whose express intent is to turn electricity into heat.

Say, a clothes iron, or washing machine/dishwasher water heater (where not
already plumbed for hot water), etc.

Since computation ultimately dumps essentially 100% of the consumed energy as
heat, why not use it for that?

Obvious arguments against are the cost of the initial hardware, and the
engineering difficulty of making something which can actually operate whilst
generating kilowatts of heat (i.e. not cooking your cores in the process)

~~~
ISL
The idea has been around for a long while. Google "data furnace".

The crux seems to be Moore's Law. We buy heaters and use them for decades, but
any compute device has a useful lifetime of a few years before it's surpassed.
If we ever see Moore's Law come to an end, expect to see a lot of highly-
distributed computing.

~~~
TeMPOraL
Under these conditions, it could still work in irons or especially electric
kettles. Those are so crappy nowadays, you have to buy new every two-three
years anyway.

~~~
ISL
Unless the device is on almost all the time, it won't compete with
datacenters, even on price.

Using compute for heat is a dodgy proposition even where heat is needed at
least half the year. The minimal uptime of an iron or kettle really puts the
kibosh on the economics.

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zmanian
21 is best understood as an attempt by the VC community to break the Chinese
Bitcoin mining monopoly. 21 doesn't appear to be working on Lightning Network
like layer 2 technologies that would make the Bitcoin micropayments for server
bandwidth viable on the blockchain. In fact as useful financial applications
of on chain transactions start to materialize, even P2P payments may start to
struggle to be included in blocks.

21 faces one of the most profound information security problem faced by any
company. They propose to put their companies capital assets into the homes of
consumers and then extract value from those assets in a manner adversarial to
the consumers interests. End users/attackers can do everything from blackhole
the network traffic of the device to modify the firmware to target the hashing
power to a new mining pool. Virtually any weakness in the engineering has the
potential to be exploited at vast scale. This should terrify them.

~~~
TeMPOraL
> _They propose to put their companies capital assets into the homes of
> consumers and then extract value from those assets in a manner adversarial
> to the consumers interests. End users /attackers can do everything from
> blackhole the network traffic of the device to modify the firmware to target
> the hashing power to a new mining pool. Virtually any weakness in the
> engineering has the potential to be exploited at vast scale. This should
> terrify them._

Mark my words. If this or similar idea ever takes hold and begins to spread, I
am going to start an open source project to hack those devices and redirect
their hashing power where consumers want in as easy and streamlined way as
possible so that everyone could do it.

I'm tired of companies extracting value from customers in adversarial manner,
literally telling their users "fuck you" in their faces.

~~~
zapu
This hashing power is useless outside of bitcoin. Even for password cracking.

~~~
TeMPOraL
Well, sure. So let it mine for some charity or for the user instead.

~~~
benmanns
Or not at all, especially when the price of electricity is usually over the
price of mined coins.

------
awalton
Actually it's even more interesting than "Intel makes a bitcoin mining chip,"
which really shouldn't be surprising given how much application-specific
accelerators have been making noise, and how many of these chips are already
on the market. Multibillion dollar companies love to hedge their bets; it'd be
somewhat more surprising if nobody at Intel were working on one.

No, the more interesting bit is that it looks like some stealth startup has a
close enough relationship to Intel to get them to mint chips. And that's
impressive; Intel's silicon manufacturing processes have historically been a
black box to outsiders.

It'll be a lot more interesting once more details about this pour out. This
could be the start of something huge...

------
sjcsjc
Link to the original article: [http://www.coindesk.com/21-intel-bitcoin-
mining-strategy/](http://www.coindesk.com/21-intel-bitcoin-mining-strategy/)

This is presumably from the same source as the recent spate of "mining from
toasters" articles started by FT's Alphaville [1]), but with a lot more
detail.

The Vimeo clip discussed in the coindesk article shows a live demo from Oct
2014 of a bandwidth auctioning protocol, (the article links to the actual
transactions eg [2])

[1] [http://ftalphaville.ft.com/2015/04/30/2127543/meet-the-
compa...](http://ftalphaville.ft.com/2015/04/30/2127543/meet-the-company-that-
wants-to-put-a-bitcoin-miner-in-your-toaster/)

[2]
[https://blockchain.info/address/1M9ZeSUStVHCAUqrCr5XhhYqb4GB...](https://blockchain.info/address/1M9ZeSUStVHCAUqrCr5XhhYqb4GBuz9x6z)

------
vectorpush
Why would anyone agree to pay for 100% of the power consumption for an ASIC
that only offers 25% of the returns? Consumers may not know anything about
crypto-currencies but they understand basic math.

When consumers are offered 5 dollars worth of bitcoin as compensation for a 20
dollar increase on their power bill they'll simply conclude "i guess that
bitcoin thing really _is_ a scam"

~~~
mikeash
Surely the idea is that the return is more than 4x the cost of the power
consumed, so that it's still a net gain for the buyer? It seems unlikely to me
that this would actually work out in the long term, but wouldn't that be what
they're going for?

~~~
vectorpush
Then why wouldn't 21 just run the ASICs themselves and take 100% of the
returns?

~~~
mikeash
That's a good question. For normal miners there's a similar question that's
answered by a lack of unlimited capital. That wouldn't seem to apply here,
since they're paying for the hardware themselves up-front and trying to recoup
costs later. I can't figure out the answer here.

~~~
ikeboy
It doesn't make sense. There's no answer to figure out. If you have efficient
miners, you either run them or sell them.

------
ForHackernews
Bitcoin is an environmental disaster. What a horrendous waste burning
electricity and real, non-renewable natural resources to generate these
tokens. For all people complain about the legacy financial system, bitcoin is
a real zero-sum game where the more miners join, the harder the block
difficulty gets, and the more coal gets burnt.

~~~
CyberDildonics
I would like to see some real numbers. Finance is 8% of the entire GDP of the
US. The transaction volume will eventually go up unrelated to mining power. It
seems like a waste to people who don't understand systems of incentives, but
it is a small and insignificant price to pay for more ideal money.

How much electricity is really being wasted? Economics works even if some
people's reaction is an emotional one instead of data driven.

~~~
vectorpush
> _It seems like a waste to people who don 't understand systems of
> incentives,_

The implication that bitcoin critics are simply incapable of understanding
bitcoin's "system of incentives" is laughably condescending as well as totally
inaccurate.

> _but it is a small and insignificant price to pay for more ideal money._

I don't think "decentralized" necessarily translates to "more ideal".
Certainly, it's not ideal for most people given all the other drawbacks that
come with bitcoin (difficult to spend, difficult to secure, subject to price
fluctuations, subject to privacy concerns, vulnerable to critical mistakes
like sending money to the wrong address or losing a wallet in a hard-drive
crash). Bitcoin is only "more ideal" if you want to perform transactions
outside the legacy system; a real use-case, but not a very popular one.

~~~
CyberDildonics
Decentralized isn't why it has better properties of ideal money. Interestingly
the winklevoss twins have made by far the best presentation of the value of
money.

------
BostonEnginerd
Intel has been doing limited foundry work for some time -- they have
partnerships with Altera (they recently almost acquired them) and Rockchip.

Working with this company is good for Intel -- they fill fab capacity for
products that don't compete with x86.

------
zhte415
I'd wager a large amount of virtual currency that these are not specifically
aimed at virtual currencies, but virtual implementations of real-world
currencies.

------
onion2k
I can see the advantage for the user (25% of the BTC mined), and I can see the
advantage for 21 (75% of the BTC mined) and Intel (sell some chips). But
what's the incentive for the _electronics manufacturer_ in embedding these
BitSplit chips? If they're not getting a cut and they're not being paid, why
would they integrate a chip even if it's free? The downside risk of embedding
a chip that may become obsolete, break down, or negatively impact energy
efficiency surely outweighs the marketing benefit of saying '21 inside'.

~~~
meragrin
The way I read it, the 25% is not going to the user directly. It just simply
goes into an account the manufacturer controls and is earmarked for the user.
The user will only be able to spend it as the manufacturer allows. This is
more along the lines of Google Opinion Rewards rather than being part of a
mining group.

~~~
ssharp
I have to wonder how they're going to market these things to people without
breaking any consumer laws. It seems like you'd almost have to trick people
into using them for any extended period of time (like after they get their
first electric bill), which will make them a prime target for lawsuits,
Attorneys General of every state, the FTC, Congress, etc.

~~~
dragonwriter
> It seems like you'd almost have to trick people into using them for any
> extended period of time (like after they get their first electric bill),

I think you greatly overestimate the analysis most consumers put into their
electric bills.

------
nivertech
Nobody asked the most important question: "what's 21 Inc's plan in case of BTC
exchange rate going south?"

------
s73v3r
Intel will advertise these chips, and claim they have many in stock. They will
take preorders in Bitcoin. The lead times will balloon out to several months,
under the guise of "burn in testing". People will be angry at not getting
their boards, and attempt to cancel their pre-orders. As they pre-ordered in
BTC, however, they will not receive the same value back as they ordered, due
to fluctuations in the price. A handful of people will receive their devices
late, and by then the difficulty curve will have ramped up, making these
devices not cost effective.

------
hendry
Wish intel would have workable h264 hw acceleration on Linux instead.

~~~
hhw
What are you talking about? H264 acceleration with Intel graphics on Linux has
been around since 2010 with vaapi.

