The prototypes are already built and you can sign up to be put on a list to test them.

Excellent question. One of bitcoins main problems is its lack of user friendliness or its odd and complicated nature. What 21 Inc is trying to do is mainstream the use of bitcoin by treating it more as a protocol instead of currency. No longer will users have to learn about bitcoin, buy some, learn how to secure it, find all the services and apps that allow them take advantage of bitcoin individually. With a BTC enabled device it will just allow them to use these features built in without them having to acquire bitcoin or even know it exists. Widespread adoption and the decentralization of mining will benefit both 21 Inc and the users at the same time. If 21 Inc just created and app with preloaded bitcoins than they would have a more difficult job of getting unique new users and would not be strengthening the ecosystem by further increasing the hashrate and decentralizing it.

Since ASIC miners become obsolete fairly quickly it may be a good idea to install them in disposable items the public typically upgrades regularly or items that serve multiple roles where they continue to be useful even after they stop being profitable. 21 Inc may be onto something.

They are necessarily projections. The 8 dollar figure is the projected cost of a small rollout and not every net enabled device. 8 dollars is actually quite expensive for a single chip.

They already have Qualcomm on board with a large personal investment. Isn't a 48 billion dollar company with a large list of skews good enough to start?

21 Inc is planing on giving away free or heavily subsidized products, that may end up costing the user more over several years of use because of the added energy costs.*

It is well understood among psychologists that most people opt for short term deals and opportunities vs long term projected costs.

There are many business models that are built around this fact. I.E..Cell phones, media entertainment systems, rent to own , car leases , and in many developing countries every single product sold in stores is offered rent to own with low to no initial cost and larger longterm costs over the life of the product.

*It is possible that the costs will be lower for the users however, but I am assuming the worst possible outcome for consumers. Some users do not pay for electrical costs because they rent, have already invested capital in renewable power. These IoT devices will offer more services than traditional devices thus negating some or all of the higher electrical costs. The unused mined bitcoins will appreciate in value and likely grow to cover the electrical costs if unspent. Any appliance that reuses waste heat like space heaters, water heaters , ect ... will be an added bonus for consumers.

You aren't exactly clear but I assume you are asking about backdoors being introduced within these devices to compromise bitcoin. If introduced this would undermine the devices themselves and not the blockchain. The exception to this rule is if over 51% of mining occurred by 21 Inc devices and there was a backdoor which was abused. In this case we must be concerned and prevent 21 Inc from mining all of its devices on a central pool regardless if their investors are mostly libertarians who have no interest in undermining bitcoin. Trusting ones intentions isn't good enough security for us.

68% of bitcoin has already been mined. 21 Inc will be competing with traditional miners and other companies that will be forced to adopt like IBM, MSFT, AMD, Google, ect... I am quite fine with 75% of the bitcoins being used to pay for high tech engineering and programming jobs in these sectors to continue to roll out and secure blockchain based technologies.

Interesting slideshow from 21Inc I found - https://imgur.com/a/q9cbL

This shows the next stage have a total capital expenditure of 8 dollars per device and after that near 0 CapEx. No wonder they were able to attract so much VC capital so quickly and are promising free and heavily subsidized devices. Traditional miners won't be able to compete with those margins and quickly become obsolete. Consumers won't mind the 1-2 dollars in higher electrical costs a month for the ability to get a free phone that has extra features. Additionally, when they start introducing devices that recycle the waste heat as a product the consumers will benefit even more.(space heater, hot water heaters, dehydrators, ect..)

These chips will be rolled out in many devices, not just cell phones. Most people leave their phones plugged in for hours after they are fully charged. This is where the mining will occur.

Correct, except Bitcoins primary use will become their vehicle to launder their profits which are stolen from other markets. Many of their useful techniques to steal money such as quantitative easing, inflation, bail ins and bail outs, do not work within bitcoin.

Why feign incredulity when the evidence over the last 30+ years reflects most people already are willing to pay slightly more per month for the opportunity of subsidized devices?

... that can facilitate tasks I cannot accomplish otherwise. Yes, let me have some more.

21 Inc revenue model isn't solely dependent upon 75% mining reward and tx fees but on the value added services that the devices take advantage of. The end user won't care about or even know their device is using bitcoin. All they will care about is the device being less expensive initially, and all the features like trust-less escrow, smart contracts, reselling and sharing bandwidth, ect.. that their devices will now provide them.

Correct, but the end user wouldn't notice or care about the electrical cost increase of 1-2 dollars a month. What they will notice is a subsidized or free device that can do things that other devices cannot do.

First and foremost it is looking like 21 has developed extremely inexpensive and efficient chips to embed in smart devices which will have a very nominal power usage and only mine a few satoshi's per hour for the sake of profiting off of IoT services and not primarily off the value of the mined bitcoins themselves.

Reasons -

1) Allowing for micropayments for services, sites and products where the user doesn't even need to signup for a service or provide a credit card.

2) More secure authentication which depends upon the security of the very secure blockchain instead of any built in software. This will be completely transparent to the user as they just need to use 1 satoshi and than they can have the ability to use trustless escrow or smart contracts on the blockchain.The intention here is to make bitcoin useful without the user even knowing about it or having to purchase any.

3) Free SAAS services which depend upon the bitcoins being mined.

4) The ability to pay for and resell bandwidth, where routers and cell phones may become part of a decentralized Small Cell network - https://www.youtube.com/watch?... This is likely why Qualcomm is invested.

5) Reducing the costs of devices by subsiding a bit of the upfront costs with SaaS, mining reward, and BTC tx fees all possible with adding a mining chip.

One good consequence will be in the reversal of the trend of the centralization of mining and the further strengthening of bitcoin. I expect other companies like google, MSFT, AMD, IBM, ect... to form partnerships and start to develop their own competing chips which may use bitcoin or another alt.

Jobs available backed by 121 million in VC funding- https://21.co/#jobs

Companies investing 121 million in 21INC - https://www.crunchbase.com/org...

More details - http://www.coindesk.com/21-int...

better article - https://medium.com/@21dotco/a-...

Reason Why Qualcomm may be so interested - https://www.youtube.com/watch?...