Jack Dorsey’s payment company Block is building its own Bitcoin mining system

In a move to address the challenges facing Bitcoin mining operators, Jack Dorsey, the founder of Block (formerly Square), announced on Tuesday the expansion of his payments company’s mining efforts. Block is now venturing beyond designing chips to building a comprehensive Bitcoin mining system.

In a statement released on Tuesday, the global payment firm revealed the completion of its proprietary standalone three-nanometer bitcoin mining chip and its ongoing collaboration with a “leading global semiconductor foundry” to finalize the design.

“We previously shared that we were developing an advanced bitcoin mining chip, with the goal of decentralizing both the supply of bitcoin mining hardware and the distribution of hashrate. Today, we are pleased to announce that we have finished development of our three-nanometer (nm) bitcoin mining chip and are in the process of completing a full tapeout of the design with a leading global semiconductor foundry,” Block said.

Block also disclosed plans to broaden the scope of its mining project to encompass system design, aiming to tackle the challenges identified through extensive consultations with bitcoin miners.

“We’ve invested significant time engaging with various bitcoin miners to understand the hurdles they face,” Block stated. “Building on these insights and in line with our objective of supporting mining decentralization, we intend to offer both a standalone mining chip and a fully designed mining system.”

we’re building a mining rig https://t.co/IKOQHNSHgO

— jack (@jack) April 23, 2024

This announcement follows Block’s prototype design of a five-nanometer BTC mining chip in May 2023, where it voiced concerns about the centralization of chip development and its detrimental impact on the ecosystem.

Intel’s decision in 2023 to halt shipping for its Blockscale 1000 Series ASIC mining chips in April due to cost-cutting measures has added momentum to Block’s initiative. Such chips are commonly utilized for mining proof-of-work cryptocurrencies like Bitcoin.

The recent Bitcoin halving on April 19 reduced the block reward for miners from 6.25 BTC to 3.125 BTC. This event is anticipated to shake up the market as miners vie for reduced rewards until the next halving, expected in four years.

A cornerstone of this project’s mission is democratizing access to bitcoin mining, making the process more accessible to individuals. Dorsey emphasized this when Block first entered the mining hardware business in 2021, stressing the need for simplicity in Bitcoin mining setups.

Concerns within the Bitcoin community regarding hardware vulnerabilities compromising network stability, especially with the ASIC chips predominantly manufactured in China, have underscored the importance of decentralizing the supply of mining hardware and distribution of hash rate, as outlined in Block’s recent memo.

Block aims to address one significant entry barrier to mining— the scarcity and costliness of mining rigs, coupled with unpredictable delivery times.

Although specifics were scarce in this latest announcement, Dorsey hinted in 2021 at a “bitcoin mining system based on custom silicon,” emphasizing the necessity for vertical integration and a broader focus on silicon design.

Thomas Templeton, Block’s general manager for hardware, previously outlined plans to enhance the reliability and user experience of mining, targeting common issues such as heat dissipation and noise production.

The timing of this announcement, following the recent bitcoin halving, underscores Block’s commitment to advancing the accessibility and decentralization of bitcoin mining amid significant shifts in the cryptocurrency landscape