Jack Dorsey's Block to Launch Bitcoin Mining Rig

Jack Dorsey, the founder of Block (formerly known as Square) has announced his payments company’s plans to build a bitcoin mining rig to expand its operations. 

In a Tuesday disclosure, the company revealed it has developed a standalone three-nanometre bitcoin mining chip and is now working with a leading semiconductor foundry to finalize the design.

The announcement also mentioned plans to broaden the project to include system design, with a focus on improving reliability and user experience. This includes addressing common issues like heat dissipation and noise production.

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Block’s Bitcoin Mining Rig

One of the primary goals of this project is to democratize access to bitcoin mining, a process that has become increasingly complex and resource-intensive. As Dorsey noted in August 2021, “Bitcoin mining should be as easy as plugging a rig into a power source.” 

Following the fourth bitcoin halving, which reduced mining reward to 3.125 BTC per block, there aren’t enough incentives for individuals to overcome the complexities of running a miner on their own. 

Block aims to solve this issue by providing an all-in-one mining system that is not only efficient but also user-friendly. The company recognizes that mining rigs are often hard to find, expensive and subject to unpredictable delivery times, creating significant barriers to entry.

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By designing a vertically integrated mining system, Block hopes to decentralize the supply of mining hardware and the distribution of hash rate, a key measure of mining competition and difficulty. This approach aligns with Dorsey’s vision of a more resilient and decentralized Bitcoin network, where mining is not concentrated among a few players.

The company didn’t reveal many details in its latest announcement. But in October 2021, Dorsey tweeted that they were exploring a “bitcoin mining system based on custom silicon.” Dorsey also emphasized the importance of vertical integration and silicon design in his post.

“Bitcoin mining should be more spread out,” he said, “The more decentralized the network, the stronger and more resilient it gets.” To support this goal, Block’s venture arm invested in Gridless, a company that operates bitcoin mines powered by renewable energy in Kenya, Malawi, and Zambia.

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The announcement follows the fourth bitcoin halving, which took place on April 20, 2024. This event occurs roughly every four years and cuts by half the rate at which new BTC units are issued.

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