Dorsey: Square May Develop Bitcoin Mining Hardware

Square chief executive Jack Dorsey has said the company is considering building a Bitcoin mining system using custom-designed silicon.

The system would be intended to make Bitcoin mining more accessible to both businesses and individuals, as well as to increase the power-efficiency of the operation, Dorsey said in a string of posts on Twitter.

“If we do this, we’d follow our hardware wallet model: build in the open in collaboration with the community,” Dorsey wrote, referring to a hardware cryptocurrency wallet the company is also developing.

Power consumption

Bitcoin miners carry out the digital currency’s settlement operations, a process designed to be highly processor-intensive in order to make it as difficult as possible to alter the asset’s digital ledger system, the blockchain.

The mining process is carried out by third parties that receive new Bitcoins in exchange for their work.

Dorsey said an easier setup process would encourage more people to take part in the mining network, making it more resilient.

“Bitcoin mining should be as easy as plugging a rig into a power source,” he wrote.

A custom-designed unit could also reduce Bitcoin’s vast power consumption, which the Cambridge Centre for Alternative Finance estimates at 0.45 percent of the world’s entire electricity production.

Silicon shortage

“Energy is a system-level problem that requires innovation in silicon, software, and integration,” Dorsey argued.

He also said too few companies are carrying out the development of microprocessors, leading to supply constraints – a reference to the current worldwide shortage of chips for all kinds of electronics.

Dorsey said the fintech company’s hardware lead, Jesse Dorogusker, would be looking into the technical aspects of the potential mining project.

Bitcoin’s value topped $60,000 (£43,700) on Friday for the first time in six months, after a decline triggered by China’s crackdown on mining and transactions involving the currency.

New figures from the Cambridge Centre for Alternative Finance found that following the crackdown, China’s global share of Bitcoin mining has dropped from about three-quarters in 2019 to roughly zero today.