How the Bitcoin Computer is saving Bitcoin

5 min readDec 9, 2015

The inspiration for this post is from a series of uncomfortable conversations with the Bitcoin community dating back to 2013.

2015 was a relatively quiet year for Bitcoin, innovation was lackluster and so was the price. We argued and fought about the block size, watched banks sink money into “the technology behind Bitcoin” rather than adopt it, develop on it, or reimagine it. We asked for a killer app that would save Bitcoin, instead we got left with a block size debate, payment channels, and a billion dollars of funding.

Bitcoiner’s around the world tweeted in frustration:

This lack of innovation could have been attributed to our perception of Bitcoin as your run of the mill currency. A person goes online, shops for a good, and purchases it with Bitcoin just as they would with their credit card. This highly convenient rationalization of Bitcoin as a currency has limited our ability to dream of what can be done with Bitcoin to more exchanges, wallets with nuanced features, and remittance apps. Although it is important to continue to innovate and to harden the technology in these arenas, this is not the ticket to the widespread use of Bitcoin.

There has been a significant amount of effort expended into informing the general public about how to use Bitcoin (e.g. www.trybtc.com, www.bitcoin.com, etc.). The understanding of and widespread global adoption of Bitcoin will not happen overnight. To understand how Bitcoin addresses work, how a payment is made, and how Bitcoin can be purchased is non-trivial. It will never come to a human purchasing a good for Bitcoin and this is the reality we must come to terms with if we want Bitcoin to succeed.

A Glimmer of Hope

If the model where a human directly interacts with Bitcoin will not work, what alternative models can we explore that will work? Two startups that have pushed the boundaries of the way we think about Bitcoin are BitMesh and Joystream. The former is a startup which helps anyone with a wifi router to monetize their bandwidth for Bitcoin, the latter provides a model for which torrent seeders can get paid for providing high-quality, high-speed content, both Boost VC startups. Both companies have laid the foundation for a change in the way we think about and use Bitcoin, Bitcoin in exchange for a digital commodity, asset, or service.

Cue the 21 Bitcoin Computer

Bitcoin was relatively dormant in 2015, but it is far from dead. The 21 Bitcoin Computer was released on November 16th 2015; with it comes a Raspberry Pi, a set of integrated Bitcoin payments tools, and a set of tutorials on how to use the Bitcoin Computer for undertaking various tasks. These tutorials are by far what is most inspiring about the computer, they are titled as follows:

While these are not necessarily complete, production ready implementations, they provide us with several “seeds of thought” which stimulate thinking and discussion around what is possible with Bitcoin. The projects we see being built today have each started with one of these as the seed. With some imagination, collaboration, and well-spirited discussion, they have developed into some fairly interesting applications that would have not been implemented or considered otherwise.

21 is taking us Bitcoiners through a thought experiment where they are putting us in a room, telling us to forget everything we know about Bitcoin, and are in essence forcing us to be innovative and to push the boundaries of what we had previously perceived to be possible with Bitcoin.

Here are some of the innovative projects being developed on 21 Bitcoin computers:

If I’ve learned anything from being part of the 21.co Slack channel, it’s that Jeff Garzik’s brain is the world’s most fertile breeding ground for startup ideas. You can check out his work here.

We can think of the Bitcoin stack as a series of layers of abstraction. The first layer contains our core infrastructure of exchanges, wallets, miners, and payment processors that sit on top of Bitcoin core. These function as expected and developers are generally happy with them. The foundation for the second layer is what is being created by the 21 Bitcoin computer.

Layer 2 — The Distribution Layer

While the Bitcoin computer doesn’t necessarily do anything that is exponentially better than what existed before it. They have accomplished the feat of pushing Bitcoin into its next layer of abstraction, where new applications and use cases for the technology will be developed . A layer where Bitcoin is so easy to use that we no longer worry about the nitty-gritty process of building and signing a Bitcoin transaction and focus on raw innovation.

Layer 2 is the distribution layer which will consist of B2B companies and developers using Bitcoin to acquire digital goods and services, this is what the 21 Bitcoin computer will help us to create; A layer of micro-economies and services that require occasional to no human involvement to provide consumers with a powerful range of utility that has yet to be fully imagined, the machine-payable web.

Layer 3 — The Consumption Layer

The next layer of abstraction, layer 3 is still unexplored but will most likely consist of an abstraction layer which will enable individual users to be provisioned with wallets for interacting with Layer 2 businesses. This will be possible without the need of a Bitcoin computer but perhaps with the need of an integrated 21 mining chip in a users device or some form of a hardware wallet. Automated signing in a trusted execution environment or in an integrated circuit is the only way to retain user private keys safe and convenient to use.

This layer will facilitate the most user-friendly Bitcoin experience, one where Bitcoin is not even noticeable. This is the layer that can be developed on by companies not wanting to develop apps on the connection layer (layer 2) and who wish to remain relevant tomorrow.

Make a Difference

The 21 Bitcoin computer is enabling Bitcoin to enter its next phase of life, the growth phase. Bitcoin developers must come together to innovate and reimagine the utility of the cryptocurrency on the internet. Bitcoin developers and companies that fail to become a part of this conversation and to stay attuned to the evolution of the technology will be out-paced and out-innovated.

Whether you have a Bitcoin computer or not, partake in the experiment of viewing Bitcoin through a different lens and contributing to its future. Take a look at the tutorials, partake in the conversations here, and imagine Bitcoin in a different light, in a world where there are no boundaries and limitations. Let’s take Bitcoin to the next level.