Block (formerly Square) builds system for bitcoin miners

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Jack Dorsey, co-founder and CEO of Twitter Inc. and Square Inc., speaks during the Bitcoin 2021 conference in Miami, Florida, United States on Friday, June 4, 2021.

Eva Marie Uzcategui | Bloomberg | Getty Images

Jack Dorsey Block’s (formerly Square) payment company will start mining bitcoin.

In a series of tweets, Block’s general manager for hardware, Thomas Templeton, outlined 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 buying, to configuration, maintenance, mining “.

According to Templeton, the idea of ​​making the mining process more accessible isn’t just about creating new bitcoin. Instead, he says the company sees it as a long-term need for a fully decentralized, unlicensed future.

“Mining needs to be distributed more,” Dorsey wrote in a tweet in October, when he first pitched the idea. “The more decentralized, the more resilient the bitcoin network becomes.”

To that end, the company resolves a major barrier to entry: mining rigs are hard to find, expensive, and delivery can be unpredictable. Block says he’s open to creating a new ASIC, which is the specialized equipment used to mine bitcoin.

The project is incubated within Block’s hardware team, which begins to build a core engineering team of systems, ASIC, and software designers led by Afshin Rezayee.

As for the hardware, Dorsey previously 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 said is too concentrated among a few companies.

Templeton writes that Block is also looking to improve reliability and user experience in mining.

“Common issues we’ve heard with current systems are heat dissipation and dust. They also become non-functional almost every day, requiring a tedious restart. We want to create something that works,” Templeton tweeted. . “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 accessible to everyone,” Dorsey wrote in October. “Mining bitcoin should be as easy as plugging a platform into a power source. There aren’t 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 eclipsed China for the first time as the world’s top destination for bitcoin miners. The United States is also rich in renewable energy sources.

Washington State is the Mecca of hydroelectric mining farms. New York produces more hydroelectric power than any other state east of the Rocky Mountains and is counting its nuclear power plants to meet its 100% carbon-free electricity target. Meanwhile, Texas’ share of renewables is increasing over time, with 20% of its electricity coming from wind in 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 electricity providers, and most importantly, its political leaders are pro-crypto. These are dream conditions for minors who want a warm welcome and cheap sources of energy.

“If you are looking to move hundreds of millions of dollars of minors out of China, you want to make sure you have geographic, political, and jurisdictional stability. You also want to make sure that there are private property rights protections for them. the assets that you move, ”said Darin Feinstein, co-founder of cryptocurrency mining operator Core Scientific.

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