The 21 Marketplace and Why Blockchain Based API Calls Could Be Huge | dinbits


Here's one of the cooler things to hit the blockchain to date. The 21 Inc API marketplace.

Since this is a larger article for our platform we'll explain what it contains. In this piece we're going to go over who 21 Inc. is and what they do, explain what the bitcoin computer is, walk through an example API call (from a developer perspective), and finally go over why this could be big.

Who Is 21 Inc? 

The mysterious and notoriously quiet 21 Inc has raised more venture capitol than any other company in the bitcoin/blockchain industry. Starting with $5 Million in 2013, their last seed in 2015 topped them at $116 Million USD. To put that into perspective, Coinbase raised around $106 Million across four rounds, the majority of that coming in their series D funding of $75 Million. 

What Do They Do? 

They don't go out of their way to tell anyway and there is no public business plan. According to the California based company, 21 is working on a series of undisclosed products for the blockchain (bitcoin). One of those products came to light in late 2015, the bitcoin computer. The BC is a hardware based USB interface to connect to and develop on the blockchain, basically a computer that accesses the bitcoin blockchain, hence the name.

21 is building "..the full-stack infrastructure for Bitcoin, from silicon to software. Backed by Andreessen Horowitz, Qualcomm, Cisco, and Peter Thiel..."

The BC was exciting to see when it came out, but beyond the hype there didn't seem to be much there. You basically plug it in and access the blockchain easily and it self mines small amounts of bitcoin to pay for transactions.

At first glance it appears as if it was just a ASIC chip with some embedded firmware to call RPC's running on a Raspberry PI and for the most part that's what it is. However, the technology is advanced and its ASIC chip is constructed by some top recruits in integrated circuitry. We know they had previously built a series of these ASIC chips and at one point accounted for around 5% of the blockchain's power. Next came the first public product offering, the bitcoin computer, which is available on Amazon.com.

More importantly it seems to be part of a bigger puzzle. Now we have another piece and 21's game plan is starting to make more sense. 

The 21 Marketplace

The beta Marketplace allows for developers (at least as it appears at the moment) to access API's (Application Programmers Interface) on the blockchain. As a developer is putting together that next blockchain based killer app they may need to access a subset of information or perform a task that another developer may already provide much like building web applications work today. 

For example when you buy something off of eBay and you enter your shipping address, eBay goes out and validates that address to make sure its a known address that is valid according to the USPS.   They don't call up the US post office when you hit submit and they don't have a drone flying around your area to swing by and check you out, they use an API. That API is called by the eBay platform to a company that does call the post office periodically and may or may not have a drone flying around to check you out. They store that information in a database and sell access to its data for minute amounts of money equating to a few pennies per transaction.

The same principal applies here however instead of a monthly account to fill with account "plans" and billing invoices with credit cards being charges at unknown points in time subject to running out of credits, each transaction is paid for by bitcoin. Tiny amounts of bitcoin.

This could be big beyond just blockchain applications. This could put regular developers on the playing field with their API's. Even API's that do not necessarily have anything to do with the blockchain. We'll save that discussion for now.

Let's stick to blockchain.

Example API Usage

With just a few lines of code and a bitcoin computer your blockchain application can access an API to perform a task or obtain some data for a tiny amount of bitcoin. 

Here is an example to obtain bitoin's historical price:

First we make the call through the 21 BC using the following model.


Inline Model [
Value
]
Value {

date (stringoptional),
value (numberoptional)
}


Call and Result

The only parameter here is to define the currency code formatted as ISO-4217 in this case "USD"

Values{
     currecny_code = "USD" 
}

$ 21 buy "https://mkt.21.co/bitcoin/price?currency_code=USD" --maxprice 2000

# Output:
# {
#   "price":415.521
# }

We get back the return:

Output{
     price = "415.521"
}

Range Restricted Call

Here the call is made with a date range between 1/1/2015 and 1/15/2015. 

The date is formatted as "YYYY-MM-DD" and we also need to specify the ISO currency code as we did in the previous example.

Values{
     start_date = "2015-01-01" 
     end_date = "2015-01-15" 
     currecny_code = "USD" 
}

$ 21 buy "https://mkt.21.co/bitcoin/historical_prices?start_date=2015-01-01&end_date=2015-01-15&currency_code=USD" --maxprice 2000

Result

We receive this return (JSON):

# Output:
# {
#   "historical_prices":[
#     {
#       "date":"2015-01-01",
#       "value":313.9247
#     },
#     {
#       "date":"2015-01-02",
#       "value":314.5916
#     }, ...
#     {
#       "date":"2015-01-14",
#       "value":177.2795
#     },
#     {
#       "date":"2015-01-15",
#      "value":210.4636
#     }
#   ]
# }

In this case we have a JSON structure of: Output{historical_prices:[{date,value}]}

Output{
     historical_prices:[
     {
          date = "2015-01-01"
          value = "313.9247"
     }
     {
          date = "2015-01-02"
          value = "314.5916"
     }
     {
          date = "2015-01-14"
          value = "177.2795"
     }
     {
          date = "2015-01-15"
          value = "210.4636"
     }]
}

This is one example and a simple one, there are many more API's already available and you can explore them on the 21 Marketplace.

Opportunity and Productivity

The marketplace is a platform for both buying and selling API calls (access to computer programs that access other information or perform tasks that the calling program need to access or perform).

Productivity (buying) and Opportunity (selling).

From a developer standpoint this is a no-brainer. Developers use API's all the time to increase productivity and refrain from reinventing the wheel because its time consuming and unproductive. A company selling tennis shoes is not in the business of validating address information (see the ebay example above). This allows one-time calls for pennies on the dollar and not only comparable to existing web API's on the market, actually cheaper when volumes land under huge price breaks (see why this is big below). 

For the most part, however, this just makes sense for developers so that they can stay on-point with their specific development efforts may they be blockchain or otherwise, yes this can be a realistic use-case outside of the blockchain/bitcoin world (again, see why this is big below). This is where the productivity comes in.

Where the opportunity comes in is also from a developers and business standpoint. The 21 Marketplace offers a way to sell API calls. You can publish your development to the marketplace and developers calling your API pays you a few Satoshi to so so. 

Seemingly simple and seemingly not a big deal. You can do this already with web-service API calls, can't you? 

No. Not exactly. Not the way the 21 Marketplace or bitcoin and the blockchain in general allow you to do this.

Why This Could Be Big

Each call costs a tiny bit of bitcoin, the call in the example for instance would have cost about 0.0083 cents USD. We made two calls so 0.0166 which a bit over 1 penny. If you were taking orders of some sort that required validation of a zip code for shipping for example ... there's a call for that at 0.0115 cents per call or 0.00002750 XBT (bitcoin). 1000 orders would cost about $11.50.

Compared to a standard web API call like SmartyStreets who offers 1000 calls for $30/mo. That equates to around 0.04 cents per call, so obtaining similar information would cost $30 however that's on a monthly based rate. If you have 700 orders you still pay the $30.

For the blockchain developer needing to make calls or one that wants to sell calls, this is the new golden ticket.

However, this is where this concept could get interesting for other development efforts. Development efforts that are not blockchain or digital asset related. Just everyday organizations who want to plug in and make or sell API calls through the blockchain 

Right now to make the aforementioned call on SmartyStreets the minimum is $20. On a lower scale using other payment services such as PayPal the minimum charge is $1. There are some that are less but the important thing is that what ends up happening is that developers have to either just give the first 100 calls or so away for free in hopes the customer will grow into a bigger plan or charge at least $1 for a call using a credit card.

Other solutions like PayPal make more sense since there is little involved to get started for a small developer and you can charge as little as $1. Of that $1 the developer receives 0.97 cents. The developer should receive 0.971 cents but PayPal rounds and keeps that other 0.001 cents or the guys from "Office Space" siphon it into their bank accounts. Everything being on the other side of 5 cents makes allot of cents to someone charging 2.9% for settlement since $19.99, $9.99, $5.95, etc... always ends up favorably to the one charging the 2.9% due to the rounding, but not the point for this example.

What is the point is that PayPal and similar types of payment systems (eg. Strip, Skrill) makes sense for a small company or developer because of the ability to charge nominal amounts like PayPal's $1 or Stripe's minimum charge of 50 cents. That and the relative ease of setting up the service for use.

Going through payment processors gets expensive to the point it makes no sense. Braintree for example charges 2.9% +30 cents per transaction. Great for large purchases considering the vast array of payment instruments they can accept on your behalf, but for the $1 charge on behalf of the small developer that equates to 67 cents.

Some companies have gotten around this by pooling charges until the meet the minimum and then charging the aggregate. In the aggregate case there is no guarantee of payment and if you authorize your customer $1 for a call that costs 1 cent, that's that's going to piss them off rather quickly.

This is where the 21 Marketplace comes in.

One call costs exactly x amount of bitcoin. Period. The bitcoin is sent with the call at the time of the call. The developer making the call gets what he paid for. The developer selling the call gets what they sold for. There is little doubt that 21 gets something out of this as well but at the end of the day 1 single call can be achieved and settled instantaneously and everybody's happy.

This is big because you cannot do this today with conventional payment systems. This opens new doors for developers both buying and selling API calls. The calling developer wins because he gets what he pays for when he/she needs it and the selling developer gets what he sold for and opens a market previously not available to him/her.

Beyond that this also opens up markets to enterprise offerings. Currently almost every API has a limit which is essentially a limited amount of API calls a single developer can call to reduce spam, abuse, bandwidth costs, etc... This can solve part of that problem or at least make it expensive to achieve for a hacker not making anything of the call. Hackers typically want to make money and not spend it.

It also mitigates risk to enterprise API providers currently charging x amount for x amount for calls. You cannot get an API call back since it's a digital product. If a credit card charge is charged back the money is gone and the services and resource to support them have already been consumed. This is why Microsoft and other game providers like to receive bitcoin for gaming products when it makes sense.

In the previous example $30 is still $30 and that adds up over time. That can equate to allot of money to a startup or micro-company if its not utilized 100% so this puts small or independent developers in the game by allowing them to buy only what they need or sell API calls whereas they otherwise may not be able to adequately and profitably pull this off. It puts the larger developers in a potential market they currently cannot access since there is not easy way to resolve payments outside of the aggregate or subscription methods. 

Exploring Other Potential

Imagine a world where you used the amount of software you consume by paying for only the amount of time you consume it. Adobe Photoshop for example. Everyone has needed to take this for a spin from time to time. You either need the free trial or you have to pony up $49 for a month of use. In a world quickly moving to monthly subscriptions for software something like this could propose a solution to an existing market currently untouched outside of free low use plans or trial periods to attract customers.

That and the previous examples are just a few use-case possibilities that could come to fruition if folks on earth so desired them to. Obviously the blockchain developer is going to immediately be able to take the most advantage of the 21 Marketplace but there is much more to be considered here and whether or not that was/is the intention of 21 is anyone's guess. With the marketplace and the bitcoin computer 21 is certainly enabling others to build that "killer app" on the blockchain. 

Inadvertently however ... they may have just created that "killer app" on the blockchain.

Is this all proprietary? No, not really. The BC is like nothing else on the market and if there was this would certainly be considered the best-in-class. That said, you could theoretically build software to access the blockchain through its RPC or use 3rd party API's for integration, store bitcoin that can be accessed through API or setup a receiving system depending on your intention of buying or selling the calls, solicit the sales for use of your API, so on and so forth however inefficient that may end up being. With the bitcoin computer and the 21 Marketplace ... it's all already here. Today. Now. Its here and its backed by the best-funded blockchain company on the map.  

...and it all comes ready to go and packaged up in one little black box ... the bitcoin computer.



Story by dinbits
Banner image by dinbits.com staff

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