Jack Dorsey, co-founder and chief executive officer of Twitter Inc. and Square Inc., speaks during the Bitcoin 2021 conference in Miami, Florida, U.S., on Friday, June 4, 2021.
Eva Marie Uzcategui | Bloomberg | Getty Images
Jack Dorsey’s payments company Block (formerly Square) is going to start mining for bitcoin.
In a string of tweets, Block’s general manager for hardware, Thomas Templeton, laid out the company’s plans for 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 set up, to maintenance, to mining.”
The idea of making the mining process more accessible has to do with more than just creating new bitcoin, according to Templeton. Instead, he says the company sees it as a long-term need for a future that is fully decentralized and permissionless.
“Mining needs to be more distributed,” Dorsey wrote in a tweet in October, when he first floated the idea. “The more decentralized this is, the more resilient the bitcoin network becomes.”
Toward that end, the company is solving one major barrier to entry: Mining rigs are hard to find, expensive, and delivery can be unpredictable. Block says it is open to making a new ASIC, which is the specialized gear use to mine for bitcoin.
The project is being incubated within Block’s hardware team, which is beginning to build out a core engineering team of system, ASIC, and software designers led by Afshin Rezayee.
In terms of the hardware, Dorsey previously tweeted that the company was considering a “bitcoin mining system based on custom silicon.” 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.
Templeton writes that Block also looking to improve reliability and the user experience of mining.
“Common issues we’ve heard with current systems are around heat dissipation and dust. They also become non-functional almost every day, which requires a time-consuming reboot. We want to build something that just works,” Templeton tweeted. “They’re also very noisy, which makes them too loud for home use.”
Democratizing access to bitcoin mining is a big part of the mission statement of this project.
“Mining isn’t accessible to everyone,” wrote Dorsey in October. “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.”
The announcement from Block comes just a few months after the U.S. eclipsed China for the first time ever as the world’s top destination for bitcoin miners. The U.S. is also flush with renewable power sources.
Washington State is a mecca for hydropowered 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 100% carbon-free electricity goal. Meanwhile, Texas’ share of renewables is growing over time, with 20% of its power coming from 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 lets customers choose between power providers, and crucially, its political leaders are pro-crypto. Those are dream conditions for miners who want a kind welcome and cheap energy sources.
“If you’re looking to relocate hundreds of millions of dollars 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 the assets that you are relocating,” said Darin Feinstein, co-founder of cryptocurrency mining operator Core Scientific.