21 Inc released new details today confirming that its market strategy will focus on distributing bitcoin mining chips embedded in consumer and enterprise hardware devices.
The formal announcement comes soon after a CoinDesk report that first revealed the startup's ambitions to use such products to promote the use of bitcoin for micropayments and as a means of mass consumer onboarding to the bitcoin network. When compared to a company overview created last fall, the latest release illustrates how the secretive San Francisco-based startup has since evolved its strategy even if its core mission remains largely unchanged.
For example, writing in a blog post on Medium newly-appointed CEO Balaji Srinivasan discussed how such a strategy would enable bitcoin to be used for device authentication and to subsidize the distribution of consumer smartphones to the developing world.
Still, the extent to which 21 Inc has gone to build a complete support system around its key product was confirmed when Srinivasan wrote:
As with past communications from the company, the timing of some of the more concrete developments from the company was unclear.
Srinivasan indicated that former CEO Matt Pauker would be taking over as chairman, but offered no details on why the leadership shift was undertaken. IT giant Cisco and former ARM CSO Mark Templeton were also named as investors, though it was not clear whether 21 Inc has opened a new round of fundraising.
Also revealed was that 21 would seek to begin mailing development kits featuring its embeddable 'BitShare' mining chip to developers. The company's website is now accepting sign-ups for the kits, but no dates for shipping were provided.
21 Inc did not immediately respond to requests for comment.
As with past public remarks, Srinivasan spoke out against speculative use cases for bitcoin, detailing how 21 would aim to create value for small amounts of bitcoin by increasing its utility and usefulness for users.
Chief among these would be the existing operators of large-scale data centers who Srinivasan said could benefit from integration of BitShare chips into their operations. 21 Inc had previously been involved in talks with companies including Advanced Micro Devices (AMD), Comcast and Intel to embed the chips.
"This means any vendor can take a chip performing a normal function (say video decoding or networking), add 21’s BitShare technology and thereby enable the chip to continuously generate revenue simply by being connected to power and Internet," Srinivasan said.
Srinivasan also suggested the technology could be used by larger entities to cut the costs of certain services.
"A wide variety of new Internet-connected devices require an associated SAAS subscription to work. Rather than paying a number of different subscription bills, by including the right-sized 21 BitShare with the device one can under many scenarios wholly or partially defray the expense of the cloud service," he wrote.
In addition to serving enterprise clients, 21 confirmed it will seek to use its chips to onboard consumers to the bitcoin network.
As detailed in its 2014 company overview, this would be accomplished by pairing consumers with large entities in a larger mining pool that would split the proceeds from any payouts received.
Among the potential consumer use cases for the 'BitShare' chip were micropayments on mobile devices, which Srinivasan said would resolve the pain point consumers face in the developing world when needing to "dig out their credit cards" when making online purchases.
Additional consumer applications included subsidizing the cost of bringing new consumers online and providing them with financial services.
"We believe the most significant long-term application of bitcoin may be reducing the upfront cost of internet-connected devices to make them more accessible for the developing world," Srinivasan said.
He cited the success of the iPhone, which subsidized its cost for new users, as a model that could potentially be replicated, reducing the upfront costs of phone buying in exchange for a consumer paying bitcoin over time.
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