When the mysterious Bitcoin mining company, 21 Inc., first appeared on the scene it was hard to tell what they were up to. Rumors coalesced into the famously questionable Bitcoin-mining toaster–but now it’s obvious that the company intends to change the face of markets that enable the Internet of Things by using Bitcoin as a medium of exchange.

With the recent announcement of the 21 Bitcoin Computer, soon to be available on Amazon.com, a clearer picture of intricately mixed markets that extends all across the Internet and into the Internet of Things emerges. The Bitcoin Computer is essentially a small form-factor Linux-based machine similar to the Raspberry Pi (favorite prototyping platform for developers and hardware engineers looking to try out new projects) that is connected to a small Bitcoin mining apparatus and is preinstalled with software that enables a developer to expose a software-as-a-service API to a marketplace that can exchange value with bitcoin transactions.

Upon its launch, 21 Inc. published what reads almost like an Internet of Things manifesto, outlining the paradigm shift that the Bitcoin Computer could represent for the industry. Much of the article is thoughtful examples of potential uses and it is not far off from where the IoT ecosystem is headed currently.

The 21 Bitcoin Computer — a developer prototype as a “window” into a new Internet of Things marketplace.

Monetizing the Internet of Things

The Internet of Things is a concept that arrives from the idea that everything will be connected, even the smallest device–this reality is already here with the rise of mobile devices and with the addition of smart appliances, smart TVs and smart homes all connected to the Internet 24/7. This leads to a surprising number of opportunities as all the data these devices produce is useful to someone.

To put together a current practical example: the weather.

Atmospheric researchers, urban planners, TV and radio stations, all find it useful to be able to provide useful and quick information on what’s going on across cities and across the nation. Sensors for all of these atmospheric conditions are often not very large, and some people even install them in their own houses to show barometric pressure, temperature, moisture, etc. collecting data useful to the niche number of people described above.

In Phoenix, AZ dust and dust storms are actually a huge danger. Dust detection is just another sensor, one that researchers and the government in Phoenix is working towards deploying to aid in detecting dust storms before they become dangerous in order to provide early-warning to motorists. In June, Meteorologist Ken Waters developed a cheap dust detection sensor that would fit right into the paradigm provided by the 21 Bitcoin Computer. For any one of these sensors the city could provide incentive for private individuals to install these devices on their property and the bitcoin transactions would give a transparent way to tell when the data was used.

Some sensors are already built into smartphones and other mobile devices. How about receiving a little bit of bitcoin for opening up a barometer sensor (installed in an iPhone or Android phone) and GPS data for a similar weather-oriented purpose? Weather services would be very interested in that level and type of granular information.

Any time an Internet connected device can trade in something useful the 21 marketplace will become operative. That device can offer up an API to provide its data and trade bitcoins for that data. Although it might be a very small amount, a single person could have lots of devices in their home that collects numerous types of data and could now leverage it.

Global communication for the Internet of Things

In a recently published article, 21 commented that having a Bitcoin-miner embedded in an Internet of Things device means that it has access to one of the most powerful globally distributed and openly readable ledgers: the Bitcoin blockchain. While the blockchain itself is not designed for this, sidechains have been under development to provide exactly this sort of infrastructure.

The idea that blockchains would be useful for ad hoc networking for distributed single-function machines is not a new one, IBM seeks to embrace the blockchain for smart contracts and Filament wants to use it for communication on the Industrial Internet.

With a Bitcoin miner embedded in an Internet of Things device a constant stream of satoshis (the current smallest division of a Bitcoin at one hundred millionth) means that the device can now transact on the blockchain and with that it’s possible to record small messages that could then be read by other devices in the network. Since each transaction costs a tiny amount of bitcoin, the flow of bitcoins from the mining chip would supply the device with the currency it needs to send messages.

Bitcoins represent a perfect currency for computers to pay each other. photo credit: Bitcoin IMG_1924 via photopin (license)

Fully autonomous network that can pay for its own services

Bitcoins provide a fully networked and digital exchange of value and most importantly bitcoins are described as a “programmable currency.” This is meaningful because it means that two pieces of software (and therefore the devices that that software runs on) can access, store, and transact in bitcoins without any human intervention.

Two devices can essentially contact one another, one device can offer an ask, the other could offer a price, and then via an algorithmic contract the two could make an exchange of data, access, electricity, or any manner of other things alongside a bitcoin transaction.

This opens up a vast number of opportunities. For example, an IoT device that collects that weather data (as part of an example above) does not have that much storage capacity for its own use, but the developer and/or engineer who put it together wants it to be able to store a variety of historical data. The device could presumably use part of its income from the bitcoin mining and from transactions for its data to buy space from a cloud provider (or even another IoT device with extra space) to keep that data.

Above is only one example of how an IoT device could contract and pay for its own necessities, using funds that the device itself garnered from its own operation.

The reality of this possibility is not too far off, already IBM and Samsung have provided an example of a washing machine that could order its own detergent when it runs out.

The 21 Bitcoin Computer an IoT platform prototype

With this “Bitcoin Computer” from 21 Inc. the ever-developing industry that is the Internet of Things has gained yet another potential link in the chain that will provide devices makers a way to make more autonomous and modular networks.

The 21 Bitcoin Computer does not ship until November 16, 2015 and it will cost $399.99. This is not an unheard-of price when it comes to a developer platform aimed at opening up markets and delivering a way for an entire industry segment to get on board with a new technology.

From the company’s press, 21 Inc. plans to embed Bitcoin miners in as many devices as possible, of course, this also means that many of those devices will have CPUs and programmable interfaces, which means that many of them will also be able to run 21’s marketplace service (and have access to all its APIs and network). By the time 21 makes a market out of its plans, there will be a constellation of devices not only mining Bitcoin but capable of transacting with bitcoins and engaging in that marketplace.

Come that November date, developers interested in cryptocurrency, decentralized networks, and the Internet of Things will get their first window into this new idea for an IoT market.

featured image credit: photosteve101 via photopin cc