21 Inc (www.21.co) continues to be in stealth mode, despite its record breaking $116million in financing which makes it the best-funded Bitcoin startup we know about. The most detailed explanation of what they are working on came from 21’s co-founder Balaji Srinivasan who stated they will build the equivalent of “56-KB Internet modems, international fiber cables, and wireless Internet towers” which took the Internet mainstream.
Many people have speculated what this means, using 21 Inc’s recruitment adverts as a guide. Positions include ASIC designer, PCB designer, Datacenter operations engineer, among others.
Clearly 21 Inc will be engaged in some pretty large-scale Bitcoin mining (one job description states there will be day-to-day operation of 10,000+ server installations). However, this is doesn’t add much in terms of mainstream adoption, so why? One answer could be that they’ve found a way to be more profitable than most miners. More likely, in my opinion, is that they want to become/create ‘trusted nodes’ within the Bitcoin mining network permitting merchants & machines near-instant confidence that their transactions will be 100% confirmed. This is something of a missing piece given the 10-minute average block confirmation time, although several parties are working on different solutions. If this is the case, 21 Inc may be happy to mine at break even, profiting from adoption instead.
There has been speculation around a ‘hardware wallet’ given Qualcomm’s strategic investment in the company. Certainly a competitor to Apple’s “secure element” would tick all the right boxes. It would enable better security for the mainstream and non-Apple majority, ensuring any private keys were kept disconnected from the Internet even on smartphones or tablets. Coming to a Qualcomm mobile chipset sometime soon? I believe so. One job advert does refer to “tiny embedded devices”. Secure elements of some sort would also be necessary for machine-to-machine transactions … essentially allowing devices to carry around a signature/key without knowing what it was or being able to be hacked.
It follows, then, that 21 Inc would develop a software wallet to use their own secure hardware element and perhaps broadcast transactions to their trusted nodes first. Merchants might pay a little more or simply prefer access to 21’s trusted network? Certainly machines transacting would need instant confirmations. If I am right about the above, then merchant solutions (e.g. PoS) will be on their roadmap as well.
That is an ambitious programme of products and services, but somewhat distinct from the other well-funded Bitcoin startups which are already grabbing market share in the spheres of centralised cloud-based wallets, online merchant processing, etc.. Many Bitcoin purists may hate the idea of a network of trusted nodes within the ecosystem, however it may be a commercial necessary. A vendor is unlikely to allow someone to walk out of their shop with a $1000 laptop without (near) certainty that they’ve been paid!
Looking forward to 21’s future announcements!