On 15 October 2021, Jack Dorsey, the Co-Founder, Chairperson, and CEO of Block, Inc (NYSE: SE), formerly known as Square, initiated a Twitter conversation about the possibility of developing a Bitcoin mining system. This system would be based on custom silicon and open-source technology, aimed at both individual users and businesses globally. Dorsey proposed a model similar to the company’s hardware wallet strategy, which would involve an open development process in collaboration with the community.
Dorsey outlined several key considerations and questions surrounding the project through a series of tweets:
Decentralization of Mining: Dorsey emphasized the importance of distributing the mining process. He argued that decentralization is crucial for the resilience of the Bitcoin network, especially after the last Bitcoin has been mined. According to him, the main role of miners in securing transactions without relying on trusted third parties remains vital indefinitely.
Efficiency of Mining: He pointed out the need for more efficient mining practices, suggesting that advancements in clean and efficient energy usage are not only beneficial for Bitcoin’s economics but also for its environmental impact and scalability. Dorsey called for innovation across silicon, software, and integration, querying the community about the largest opportunities in this area.
Concentration in Silicon Design: Dorsey highlighted concerns over the concentration of silicon design within a few companies, which might lead to supply constraints. He noted that silicon development is costly, demands long-term investment, and benefits significantly from close integration with software and system design. He questioned why more companies are not involved in this sector.
Need for Vertical Integration: The thread also touched on the lack of focus on vertical integration in the industry. Dorsey suggested that considering hardware, software, productization, and distribution as a single system could enhance accountability and improve accessibility to end users.
Accessibility of Mining: Finally, Dorsey addressed the accessibility of Bitcoin mining, advocating for a system where setting up a mining rig would be as simple as plugging it into a power source. He pointed out the current lack of incentive for individuals to engage in mining due to its complexity and asked for input on the biggest barriers faced by people interested in running miners.
Square is considering building a Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide. If we do this, we’d follow our hardware wallet model: build in the open in collaboration with the community. First some thoughts and questions.
— jack (@jack) October 15, 2021
In an announcement on April 23, the Bitcoin mining division of Block shared exciting updates on its ongoing Bitcoin mining project. The company revealed that it had completed the development of its advanced three-nanometer (3nm) Bitcoin mining chip and is in the process of finalizing a full tape-out of the design with a leading global semiconductor foundry.
Block’s mining division emphasized that this milestone marks an important step in its pursuit of decentralizing both the supply of Bitcoin mining hardware and the distribution of hash rate. The company had previously shared its progress on manufacturing a five-nanometer (5nm) mining chip prototype, which met its design targets and validated its architecture and design approach.
According to Block, their 3nm mining chip will utilize the most advanced semiconductor process currently available, ensuring that it delivers the performance required for mining operators of all types to thrive in the fifth mining epoch (the period following the recent 4th halving of the block subsidy) and beyond.
Alongside the completion of their chip design, Block’s mining division announced that they are developing a full Bitcoin mining system. The company has been actively engaging with the mining community, listening closely to the feedback and insights provided by a wide variety of Bitcoin miners to identify the challenges faced by mining operators.
Block stated that building on these insights and in line with their goal of supporting mining decentralization, they plan to offer both a standalone mining chip and a full mining system of their own design. The company highlighted that they will be the only large, well-capitalized mining hardware vendor with a standalone mining chip solution, which they hope will help unlock mining system innovation and support the much-needed development of new mining system form factors and use cases.
Regarding their bitcoin mining system, Block’s mining division intends to leverage their extensive experience in product and software development, system engineering competency, supply chain management, and aftermarket support. The company says it has shipped tens of millions of devices and plans to use this expertise to bring a compelling and differentiated mining solution to the market.
Featured Image via Pixabay
