Forever 21 Inc. raised $116mn in venture funding before a product or business plan was even announced. Earlier this fall the company announced the 21 Computer, a Frankenstein creation using a Raspberry-Pi 2 and a proprietary ASIC which will be obsolete soon given the continual difficulty increases. This computer can be bought for the low price of $400, which allows users to connect to 21 co.'s API a bastardization of the already functioning Web of Trust. Recently code was independently released allowing individuals to run the 21 co. software stack on a $40 Raspberry Pi, to which the CEO of 21 Inc. responded on reddit stating they will be patching the code to prevent non-21 Co. from connecting to their marketplace.
Balaji Srinivasan, Forever 21 Inc. CEO, top justification for the move for blacklisting Never-21 Co. Computers from the network to strengthen trust among the early users. He stated:
We want to make sure that the first group of buyers and sellers in the 21 Marketplace are folks who've bought a 21 Bitcoin Computer. This ensures a higher basal level of trust and will be one of the first functioning digital goods marketplaces using Bitcoin — which will be good for Bitcoin.
The fallacy in this thinking is that buying a 21 computer makes a user any more trustworthy than an individual who doesn't want to purchase the device. The 21 Co. marketplace which is "coming soon" will allow users to rate other users in a peer to peer fashion, (although this is debatable given 21 Inc.'s network is client-server), along with purchasing and buying "digital goods". The Srinivasan is likely implying in his above statement that 21 Computers's proprietary hardware is identifiable on the network in which to tie ratings, an abomination of the GPG enforced Web of Trust. It can be inferred that due to the nature of the 21 Computer's rating system, the ratings and users cannot be independently verified in the same way as a GPG rating system.
Srinivasan also elaborated on issues of trust:
many of the techniques we're using here (as well as others) will be used to protect you as a seller if you get a 21 Bitcoin Computer and are selling digital goods and services in the 21 Marketplace. You will probably experience a higher attempted double spend rate, for example, if selling a digital good to someone who didn't buy a device. As a seller you'll have a different worldview.
The fallacy of this view is that by opting in to buy a Forever 21 Computer, users are awarded extra trust points, which is not how a Web of Trust works:
Trust is not in the web, that or any other web. Trust is not in the wording, not on the paper, not in the symbols, or certificates, or seals. Trust is not in others and other things, but much like faith – for which it serves as a ready synonym – trust is within oneself.
The lack of understanding of the function of trust in Bitcoin will most likely doom the 21 Co. marketplace into becoming the scammers paradise of suckers seen in the past such as GLBSE (Global Bitcoin Scam Exchange). Opting into GLBSE's KYC (know your customer), did not reduce the number of scams listed, nor will opting into buying the 21 Computer reduce the number of scams listed on their marketplace when it launches.
Utilizing a uniquely identifiable piece of hardware on a closed marketplace network creates the precursors needed for a highly regulated situation. Although not explicitly stated in Srinivasan's post, those who purchase a 21 Computer who violate the "terms and conditions" on the marketplace will likely have their device banned from the network. This mentality is against the censorship resistance of actual Bitcoin.
Srinivasan concluded his post by stating his company aren't bankers:
Just like you guys, we aren't bankers, we are hackers, and we are looking for people who are crazy enough to spend a Friday night reading this thread to try to save a bit of money by downloading and running new kinds of Bitcoin software.
Bitcoin directly deals with finance, and given the trail of dead companies who perished trying to play Bitcoin banker in some way, 21 Co. may soon enough join their already disgraced peers in the graveyard. Srinivasan's post makes him out to be just another person joining Bitcoin because they weren't good enough to sling dope. It doesn't matter that 21 Co. lined up idiots to purchase its computer or convinced VC's to fund them with a hundred million dollars. It is still the perfect bad idea.
If anyone needs further convincing that this guy knows dick about computers in general, remember this quote from a few days ago: "Laptops can't work as home servers, because if you close the lid, it turns off."
The amount of money that VC's throw at idiots like this never ceases to amaze me.
I just couldn't take that at face value, seeing a few of his tweets, and found this:
https://np.reddit.com/r/Buttcoin/comments/3tr6ej/day_4_21cos_ceo_balaji_srinivasan_doesnt_even/
He's an interesting chap. I was struggling to see why 21's offer is attractive, and their attempt to block Raspberry Pis running their software sealed it; it appears to be over rated. Something is not right with this picture. Someone who is so smart wouldn't release a hardware product like this that does so little. Why not just release the software? There is hardware everywhere that can run it.
I did have a decent lol at the redditard you linked. Here's the incontrovertible facts : all an ivy league diploma proves is that while you don't know how to power a lightbulb, you also have a very good story as to why that shouldn't matter (protip : it still does, your story's just a story) ; random indian came over to suck off the welfare pipe, like so many others. That's it, two, not four.
Hacker "just like us" ? Here's the incontrovertible fact : all domestic herbivores view their handlers as animals of the same kind, of the same gender and of the same age. When the "just like you" delusion happens in humans, it's called Dunning-Kruger syndrome. When it happens in whatever this guy is, it's just called normal. Because it is normal for herbivores – they all do it, and that's what normal means.
Anyone who releases a product like 21, believing that it won't be disassembled and its software re-purposed is a Dunning-Kruger case. They should rationally expect people to reverse engineer their products, replace their software etc. There is a long history of this, so for them to expect to be the sole exception is irrational.
As for all the money pouring into it, this is pure "California Dreaming" as others have said. There is also the mistaken belief that they think they can control both "sides" of the phenomenon, by funding their unethical legal steering group with a million dollars a year, and running a loathsome snitch board. Both are completely delusional positions and they are going to fail.
A similar group has just been announced in London, that has alot of poorly designed charts, yesterday's men, sycophants, petit banquiers and a spiffy name to its credit…and thats it. No software, plans for software. Nothing.
This really is the best that they can come with, and apart from 21 that has some hardware that just became less useful now the difficulty has just shot up, and some software that that they don't want people to play with, these Statists are on a hiding to nothing.
If they accept the coming transformation, they have to give up their positions. If they refuse to accept it, they cant fight it and win. This is a major problem for them. You can actually see them squirming.
This is the problem of too much money. Interestingly, for a real world example of how Bitcoin solves this problem: S.MG is highly capitalized, and spends very little – only what it needs. The company is able to hold cash on hand without the worry of it burning in their hands like a time bomb as fiat does. This corporate financial strategy would not be possible without Bitcoin.