Yeah it's a bit of a mystery to me.

The blog post goes a long way in hinting here and there, but leaves lots of unanswered questions. I'll give it a shot for you if you'd like.

The underlying idea is interesting. At its core mining bitcoin represents an opportunity to earn money for proof of work, and work is done by electricity going into hardware. If everyone has hardware, then that means you can run a payment system on electricity. And that's hugely powerful and exciting. Want to your fridge to stock some Chicken? Well it's plugged into the socket, just turn electricity into money, and let your IoT fridge order chicken, an Amazon drone will deliver it, all paid for with bitcoin, automatically, without humans involved.

It's a slightly crude example but it hints at interesting opportunities. Have a lightweight computer at home and want to render a 3d model? Simply turn electricity into digital money, and pay a cloud computer to do it.

Electricity as a payment channel. Anyone you have power, you have access to internet and financial networks.

But that's kind of where it all breaks down. The economics make very little sense. You can't have local consumer grade mining hardware mine bitcoin to pay for cloud computing, without at the same time living in a market in which these cloud computers can mine the bitcoin themselves, much cheaper, with industry grade hardware and access to cheap electricity rates and cheap cooling in places like Iceland.

Mining is a zero sum game. Every 10 minutes 1 person wins the lottery, and the amount of lottery tickets depends on how big your hardware is, and how efficient it is in turning electricity dollars into tickets. Because industry grade hardware is more efficient and electricity is cheaper for industrial purposes, the professional miners mine at below average costs, the consumers at above average costs.

It follows then that it's cheaper for a consumer to simply source or license mining power in the cloud, or indeed, simply purchase bitcoins from professional miners, for less than it'd cost them to mine them themselves.

And it's no surprise this has been exactly the way of bitcoin for the past few years since professional mining took over in full.

And if bitcoin is ever to become truly mainstream - if not, this entire venture of putting chips in millions of devices is irrelevant to discuss - then purchasing and using bitcoin should be as easier or easier than sending an email. Making it trivial to finance your IoT devices with bitcoin without having to mine it, too. Indeed already using Circle you can instantly buy bitcoins at 0% commission, not much harder than signing up with Gmail.

And this is just one of the various fundamental issues. The other one is that mining very rapidly increases in scale. If you'd have had a smartphone that had a mining chip in 2011 that used bitcoins to get service, it'd now be defunct as its mining output dropped by a factor of a million or some crazy amount like that. Mining output and difficulty is unpredictable, yet constantly growing. It's as if you had a smartphone charger that charged 80% less a year later. It's not practical.

Beyond that, the whole idea of discounting consumer devices to recoup revenues in mining requires serious technical challenges to be solved. i.e. forcing devices to mine continuously after purchase, and worse, forcing humans to charge and turn on their devices long enough to spend their electricity on paying back the proverbial debt on their discounted purchase. It's a business model which is not quite a no-brainer.

Lots of unanswered questions. There's genuine IoT potential and it's very interesting to think about, but so far only in the realm of sci-fi ideas whose economics make little sense.

Ignoring the mining bit for a moment, you're left with bitcoin wallets on IoT hardware that happen to not mine, but that can receive and spend money.

And that's hugely exciting. Send your router or PC $10 and it'll automatically add small pieces of bitcoin to http requests and you could create a different payment model besides ads and subs. Send your driverless car $100, and it'll drive to the nearest charging station at night and charge itself, then while driving on the highway while late for a meeting, pay $1 to any driverless cars configured for 'not-in-a-hurry- in front of it to move out the way, creating a real-time market based VIP lane for you that more efficiently dedicates scarce lane space to priority users. (it has flaws, but it's an enticing example).

I'm hoping they're looking to spearhead this and that the mining bit isn't as big as it's made out to be.

Examples like that can't be done through traditional banking systems like ACH or SWIFT. You want digital payments, even creditcards are slow to clear. Paypal could work, but it's proprietary, similarly we don't like to run the internet on proprietary protocols and platforms, either. Bitcoin is an open protocol and can be built on top of with fast or slow transactions, cheap or expensive etc. It's a unique platform to make global, plug & play, open-2-all IoT platforms possible.