Block (formerly Square) is building a system for bitcoin miners
Jack Dorsey’s payment company, Block (formerly Square), will start mining bitcoin.
In a series of tweets, Block’s general manager of hardware, Thomas Templeton, laid out the company’s plans for the next steps.
Templeton says the goal is to make bitcoin mining — the process of creating new bitcoins by solving increasingly complex computational problems — more distributed and efficient in every way, “from purchase to setup. , through maintenance and mining”.
According to Templeton, the idea of making the mining process more accessible is not limited to the creation of new bitcoins. Instead, he says the company sees a long-term need for a fully decentralized, permissionless future.
“Mining needs to be more distributed,” Dorsey wrote in a tweet in October, when he first pitched the idea. “The more decentralized it is, the more resilient the bitcoin network becomes.”
Jack Dorsey, co-founder and CEO of Twitter Inc. and Square Inc., speaks at the Bitcoin 2021 conference in Miami, Florida, U.S., Friday, June 4, 2021.
Eva Marie Uzcategui | Bloomberg | Getty Images
To that end, the company solves a major barrier to entry: mining rigs are hard to find, expensive, and delivery can be unpredictable. Block says he is open to creating a new ASIC, which is the specialized equipment used to mine bitcoin.
The project is being incubated within Block’s hardware team, which is beginning to build a core engineering team of system, ASIC, and software designers led by Afshin Rezayee.
At the hardware level, Dorsey has already tweeted that the company was considering a “custom silicon-based bitcoin mining system.” Dorsey then shared his thoughts on the need to focus more on vertical integration, as well as silicon design, which he says is too focused on a few companies.
Templeton writes that Block is also looking to improve mining reliability and user experience.
“Common issues we’ve heard with current systems are heat dissipation and dust. They also become non-functional almost every day, requiring a time-consuming reboot. We want to build something that works” , tweeted Templeton. “They are also very loud, which makes them too loud for home use.”
Democratizing access to bitcoin mining is a big part of this project’s mission statement.
“Mining is not for everyone,” Dorsey wrote in October. “Bitcoin mining should be as simple as plugging a rig into a power source. There are not enough incentives today for individuals to overcome the complexity of running a minor for themselves.”
Block’s announcement comes just months after the United States first eclipsed China as the world’s top destination for bitcoin miners. The United States is also rich in renewable energy sources.
Washington State is a mecca for hydroelectric mining farms. New York produces more hydroelectric power than any other state east of the Rocky Mountains, and it counts its nuclear power plants toward its goal of 100% carbon-free electricity. Meanwhile, Texas’ share of renewable energy is increasing over time, with 20% of its power comes from the wind as of 2019. The Texas Grid also continues to rapidly add more wind and solar power.
Texas also has a deregulated power grid with real-time spot pricing that allows customers to choose between power providers and, crucially, its political leaders are pro-crypto. These are dream conditions for miners who want a warm welcome and cheap energy sources.
“If you’re looking to move hundreds of millions of dollars worth of miners out of China, you want to make sure you have geographic, political, and jurisdictional stability. You also want to make sure there are private property rights protections for which assets you move,” said Darin Feinstein, co-founder of cryptocurrency mining operator Core Scientific.