Well YES, Silicon Valley VCs do think you're a CRETIN A couple of weeks back I pointed to some rumours about what the stealth (and hugely VC backed) company 21 Inc was up to, with the idea being, seemingly, to stick a Bitcoin mining chip in your toaster. So, as well as that breakfast comestible you could lose money on your electricity bill by attempting to mine for Bitcoin, …
He often provides interesting insights into real-world finance and economic behavior but can't offer us much on the wisdom of crowd-cloud-meta-ponzimatics, trapped as he is in the old paradigm of profit-orientation.
Perhaps Steve Bong could explain how this quantum leap makes us all winners?
If you could in fact make a chip operate at "toasting element" temperatures, then you could toast with the waste computational heat.. for the 5mins every day you run your toaster.
On the other hand, hot and fast running chips replacing the heating elements in your water heater might just be a thing! Seems sensible to use that entropy to do something useful* instead of going straight to the waste heat, right?
*usefulness will vary depending on the vapidity of the work the processor is put to.
There are datacentres whose waste heat is indeed harnessed to provide heating and hot water. And watercooled server kit that lends itself to having waste heat harnessed. Alas, no standardisation that would help make it the norm for plumbers/etc to incorporate it into everyone's infrastructure.
5 minutes every day? Our toaster lies in the cupboard for over 25 days a month, it is taken out every now and then and plugged in for a couple of minutes to make some toast, before it is packed away in the cupboard again. I'm not sure how much bitcoin it will earn at less than a quarter of an hour of "on" time every month - then you'll have to deduct the boot times from those 15 minutes - I'm guessing probably less than 5 minutes of processing a month...
And a replacement cycle of around 20 years...
I think I'll stick with my dumb toaster, thanks all the same.
"Our toaster lies in the cupboard for over 25 days a month, it is taken out every now and then and plugged in for a couple of minutes to make some toast, before it is packed away in the cupboard again."
I read this several times, but I still don't comprehend. You seem to be living an almost toast-free existence.
I'm afraid I also live a barren, mostly toast-free, life. Tragic isn't it. Although my cupboard space is at more of a premium than work-top space, so my toaster lives an al fresco existence in comparison.
During the quid-a-day nosh posse thing, my toaster saw regular action - due to home made bread being so cheap - and Lidl's thoughtful provision of 46p jars of "I Can't Believe It's Not Marmalade". I've still not worked out what to do with the rest of that jar...
But normally I make small loaves, and so consume my bread in its cold sandichy state. Often with bacon in - and bacon sandwiches just aren't as nice with toast. Or with with soup.
Even the amazing M&S calvados marmalade I scored in a hamper last Christmas doesn't seem to be enough of an incentive to get me toasting. It must be some sort of disease of the brain...
Living in Germany it is difficult to get hold of Marmite. It is something I stock up on when I come back to Blighty to visit the family.
We generally eat fresh bread, which doesn't need toasting - or turns into tasteless cardboard when toasted.
We do also have "toast bread", but that is about 60% smaller than a normal slice of bread...
For the amount of return you're going to get, you'd be better off scrounging for change in your sofa. Instead of using a distributed computing network of toasters, fridges, dildos, whatever, to find meager amounts of cash for someone else, how about using them for "Fold at Home", "SETI", or whatever other research projects make sense if you're going to waste the electricity?
>However, the rest of the pitch is, as I compared it with last time, something out of the South Sea Bubble.
Well, duh.
The point of something like this isn't to make something that works, it's to part Greater Fools of all stripes - including VCs - from their cash.
Considering the number of ASIC vendors who never deliver, and the number of BitCoin exchanges which inexplicably "lose" some of the BitCoins they're supposed to be holding, this is just a variation on the same old scams with some extra lipstick to tempt the Butchers of Sandhill Road.
It might even work. My guess is not because it's on the obvious side, even for a startup.
Common, how long have Ponzi schemes and 419 scams worked for? Despite the fact that the world and its canine companions should be aware of them by now. It's virtually impossible to lose money by promising the greedy yet gullible a glittering unicorn wearing the emperor's shiny new clothes.
Common, how long have Ponzi schemes and 419 scams worked for?
Is the first phrase there a mondegreen1 for the interjection "Come on"? Serious question. I have no idea what else "Common" might mean in this context.
a glittering unicorn wearing the emperor's shiny new clothes
This, on the other hand, wins Best Mixed Metaphor of the Thread, by a mile.
(I once shot a unicorn in my imperial regalia. How it got in my imperial regalia I'll never know.)
1Or possibly an eggcorn; the distinction in this case is too subtle for me to decide.
Though I have a limited grasp of economics, I read, enjoy and, I think, understand most of Tim Worstall's articles.
But I have to confess that in this case I haven't the foggiest idea what he's on about, despite that fact that the article seems to be about something related to IT, which I'm supposed to know. Should I take the trouble to find out?
Assume that they do make a magic chip which is more efficient than anything else, and sell a few million toasters. Massive supply of bitcoin to the market, real world value collapses. What next?
What part of their proposal increases the number of buyers of bitcoin using real world cash?
A random smartphone maker embeds their chip in the phone, and gets a steady stream of bitcoin for which the user presumably gets a discount. What will the manufacturer do with these bitcoin apart from sell them for $?
People are still mining bitcoin for a profit so making more than the cost of the hardware and electricity is possible. If you have a device which needs silicon circuitry and a net connection anyway then the incremental cost of a bit more silicon for a bitcoin mining engine is low, hard to see how it can't be lower than the cost of hardware which can only mine bitcoin.
So the hardware costs beat existing profitable mines, the mining silicon needs to match or beat existing mining silicon efficiency in coins/W and then you are just left with the relative price of electricity. I don't know if bitcoin mining margins are so slim that it can only be profitable in places with cheap electricity. Even if the electricity is too expensive the losses are not going to be 99%.
Not that I think pissing away vast amounts of hardware and electricity producing special 'numbers' was ever a sensible thing to do.
Short answer is either.
You can mine individually, and if you solve it first and get added to the blockchain first then you win the full finders fee reward.
Or you can join a pool, where the pool distributes the work to search for the next valid block to all the machines in the pool and they search together in parallel in different parts of the search space and if any machine in the pool finds the next valid block (and gets added to the blockchain first by the pool) then you will gain one Nth of the reward. Where N is the number of machines in that pool searching at the time that the block was found, and the pool gets to keep a tiny amount as well, so it is slightly less than one Nth that you will get.
The first way, for example - depending on your computing power, you may find on average one valid block every 2 years. The second way, in a pool, you will gain 1/(2x365.25) of the reward for valid blocks a day on average.
It goes up in smoke, kind of, but not really.
The more machines searching the faster (on average) the solution will be found. Or the more secure the older blocks in the chain will be locked in place.
You can think of the electricity being used to search as securing the blockchain. There is a periodic evaluation of the rate at which the solutions are being found, if it is too fast then the problem is made harder, and if it is too slow then the problem is made easier. The more computing power that is being used, the harder the last (and next) block on the blockchain is to be hijacked by a malicious third party.
So even though everyone in the race does not win every race, the problem is such that the last winner, or looser, will have exactly the same chance as everyone else of winning the next race. Each new race take place (on average) every 10 minutes.
One use of the block chain is low cost licensing, as implemented in a recent hackathon (http://shape-of-code.coding-guidelines.com/2015/02/16/long-tail-licensing/).
Toasters might not want to license IP, but TVs might.
Perhaps your fridge will be able to order supplies when it detects items have been removed. But would you trust cryptocurrency based contracts to work as advertised
http://shape-of-code.coding-guidelines.com/2015/03/15/ethereum-is-it-cost-effective-to-create-reliable-contracts/
I'm no Bitcoin expert, but wouldn't using it like this start to make the blockchain unfeasibly huge, such that it needs ever greater amounts of computing power to keep registering transactions? Which is all very well while mining carries on, but eventually there's going to be an end to mining new Bitcoins, and then every transaction will have to be paid for - in order to make it worthwhile for the miners to keep on going, and keep the blockchain working.
Not-Spartacus, you are right. While storing large amounts of data in the block-chain is frowned upon, there is not a lot stopping people storing whatever they like. There are various projects using the blockchain to store a key-value pair:
https://github.com/namesystem
So, in conclusion, environmental types should be campaigning strongly against BitCoin and everything like it, because it essentially requires the wasting of energy (on a massive scale) to generate "value". There is no real tangible benefit from any of this BitCoin mining - unlike (at least hypothetically) the various other distributed computing projects we've had over the years (SETI, genome folding, etc).
It's a purely artificial waste of energy - kinda like doing a soduku, but one which takes millions of computers months to solve, just for the "prize" from being the first to do it.
On the other hand, the blockchain as an idea might turn out to be useful. Obviously designed not to be so computationally intensive, so that power use doen't have to go up to insane levels. And possibly using a fixed pool of computers to do the generating, but distributed enough that it's hard to build a cartel to control it. Apparently the Bank of England put out a paper on using this for various inter-bank transfers - I assume things like assets used as collaterol on the repo market, though I've not read it.
And this would make me want to own one.... why???? Sorry, any appliance with 'Net connection will never see the 'Net in my house. And I sure as hell am not about to spend money for something like "maybe get a small chunk of Bitcoin" while the maker of said toaster/appliance reaps most of it.
So when the last of the finite number of bitcoins have been mined by the billions of IoTs beavering away, what happens?
For 100 million plus dollars, one hopes the silicon is designed to just stop working (at which time the grid collapses from a sudden unit step change in utilization?). More likely, the beavers just keep increasing the entropy of the universe to no particularly useful effect unless you need the electric heat... but by then the 21inc'ers will be off creating a new pyramid.
If you could discount the toaster to such a point, where the "extra" leccie bill is offset then I could see this being a thing.
For example (the numbers are ex culo, but just to make my point)
Say you make and sell a toaster costing $20 (cost), but would be $40 retail normally, that generates $1 per month, on average (For 21, not the consumer, who would get say 1c.), and uses $1.5 more electricity per month (which the consumer pays)
This means that every month, for the life of the machine, 21 make profit they would have made selling at $50. However, using these numbers the toaster would have to be running for just under 2 years to bring the profit back to where it was if they'd have sold it retail.
Of the blockchain, not the devices. As the number of miners expands (exponentially?), it becomes that much harder for a well-funded opponent (one of the G7, for a less-than-random example) to put enough mining power into service to corrupt the blockchain. (See, e.g., the discussion of trends toward centralization. A sufficiently-large swarm of mosquitoes out-masses an elephant.)
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