A business plan that could turn bitcoin mining — and even the economics of selling chips and smartphones — on its head. A company called 21, has designed an embedded chip for bitcoin mining — the process of running complex algorithms that are required to solve an equation to generate, or mine, new coins in the digital currency.
Bitcoin mining initially was done by individuals on home PCs, but the work has gradually been taken over by mining collectives and large compute clusters that are now needed to solve the increasingly complex Bitcoin algorithms.
21 is looking it at a different angle. The plan is to get its bitcoin mining chip called Bitshare installed into millions of smart phones and tablets and get mining with the new currency.
But the startup — whose backers include Qualcomm, Cisco Systems and a former ARM executive, and which reportedly has raised “well north of $116 million” – has larger ambitions than just a new way to mine bitcoins.
For starters, it sees its chip as a way to solve the problem of micropayments, or payments that are too small to make it worth the hassle or cost of using a credit card to process them, that currency could be used to pay for services, as well as for cloud applications like online storage.
It could also be used to pay for the chips themselves, which would be a radical new model for the semiconductor industry. ” This technique can replace or augment traditional methods for silicon monetization ,it has the potential to revolutionize the way chips are built and sold ” said 21’s CEO Balaji Srinivasan.