Jack Dorsey’s payments company, Block, is building its own bitcoin mining system

Jack
Dorsey
says
that
his
payments
company,


Block
(formerly
Square),
is
expanding
its


bitcoin
mining
ambitions
from
designing
chips
to
developing
a
full
bitcoin
mining
system.

In
a
post
on
Tuesday,
the
global
tech
firm
announced
that
it
had
finished
the
development
of
its
own
standalone
three-nanometer
bitcoin
mining
chip
and
was
now
in
the
process
of
working
through
the
design
with
a “leading
global
semiconductor
foundry.”

Block
also
unveiled
plans
to
broaden
out
the
scope
of
its
mining
project
to
include
system
design.

“We’ve
spent
a
significant
amount
of
time
talking
to
a
wide
variety
of
bitcoin
miners
to
identify
the
challenges
faced
by
mining
operators,”
Block
writes. “Building
on
these
insights
and
pursuant
to
our
goal
of
supporting
mining
decentralization,
we
plan
to
offer
both
a
standalone
mining
chip
as
well
as
a
full
mining
system
of
our
own
design.”

Democratizing
access
to
bitcoin
mining
—
the
process
of
creating
new
bitcoins
by
solving
increasingly
complex
computational
problems
—
is
a
big
part
of
the
mission
statement
of
this
project.

“Mining
isn’t
accessible
to
everyone,”
Dorsey
wrote
when
Block
first
entered
the
business
of
building
mining
hardware
in
2021. “Bitcoin
mining
should
be
as
easy
as
plugging
a
rig
into
a
power
source.
There
isn’t
enough
incentive
today
for
individuals
to
overcome
the
complexity
of
running
a
miner
for
themselves.”

Indeed,
members
of
the
bitcoin
community
have
long
been
concerned
that
hardware
vulnerabilities
might
compromise
network
stability.
The
ASIC
chip
used
in
mining
rigs,
for
example,
is
manufactured
in
China,
a
country
that
has
proven
hostile
to
the
crypto
sector
in
recent
years.

Block
said
in
its
memo
on
Tuesday
that
the
goal
of
this
project
is
to
both
decentralize
the
supply
of
bitcoin
mining
hardware
and
the
distribution
of
hashrate
—
a
proxy
for
industry
competition
and
mining
difficulty.

To
that
end,
the
fintech
firm
is
solving
one
major
barrier
to
entry:
Mining
rigs
are
hard
to
find
and
expensive,
and
delivery
can
be
unpredictable.

The
company
was
light
on
the
details
in
this
latest
announcement,
but

Dorsey
posted
in
2021
that
the
company
was
considering
a “bitcoin
mining
system
based
on
custom
silicon.”
At
the
time,
Dorsey
went
on
to
share
his
thoughts
on
the
need
for
more
of
a
focus
on
vertical
integration,
as
well
as
on
silicon
design,
which
he
says
is
too
concentrated
among
a
few
companies.

Block’s
general
manager
for
hardware,
Thomas
Templeton,
previously
disclosed
plans
to
improve
reliability
and
the
user
experience
of
mining,
addressing
common
issues
around
heat
dissipation
and
noise
production.

The
announcement
comes
just
after
the
most
recent
bitcoin
halving,
which

took
effect
late
on
Friday.
The
event
happens
roughly
every
four
years,
and
it
cuts
the
issuance
of
new
bitcoin
in
half.

The
idea
of
making
the
mining
process
more
accessible
has
to
do
with
more
than
just
generating
new
bitcoin.
Instead,
Dorsey
sees
it
as
a
long-term
need
for
a
future
that
is
fully
decentralized
and
permissionless.

“Mining
needs
to
be
more
distributed,”
Dorsey
posted
on
X
in
October, when
he
first
floated
the
idea. “The
more
decentralized
this
is,
the
more
resilient
the
bitcoin
network
becomes.”

Toward
that
end,

Block’s
venture
arm
backed
Gridless,
a
company
that
operates
bitcoin
mines
from
renewable
power
sources
in
Kenya,
Malawi
and
Zambia.