Jack Dorsey's Company Block To Build An Open Bitcoin Mining System

by Bhaswati Guha Majumder - Jan 14, 2022 03:49 PM +05:30 IST
Jack Dorsey's Company Block To Build An Open Bitcoin Mining SystemTwitter CEO Jack Dorsey. (Photo by Amal KS/Hindustan Times via Getty Images)
Snapshot
  • American financial services and digital payments company Block is working on an open bitcoin mining system as it tries to diversify its business beyond payments and into new technologies such as blockchain.

Jack Dorsey, the CEO of an American financial services and digital payments company called Block said in a tweet on 13 January that the firm is working on an open bitcoin mining system as the company tries to diversify its business beyond payments and into new technologies such as blockchain.

In October last year, Dorsey revealed that Block, formerly known as Square, was exploring developing a bitcoin mining system for consumers. He tweeted: “Square is considering building a Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide. If we do this, we’d follow our hardware wallet model: build in the open in collaboration with the community. First some thoughts and questions.”

The former Twitter CEO Dorsey tweeted on 13 January, “We’re officially building an open bitcoin mining system.” The project's purpose is to make bitcoin mining, the world's most valuable cryptocurrency, "more distributed and efficient," according to Thomas Templeton, who is Block's general manager for hardware.

Bitcoin uses a proof-of-work (PoW) system, in which miners compete to solve complicated puzzles to validate transactions. The procedure is not simple as it takes a significant amount of energy and computer processing capacity, both of which are very expensive.

On Twitter, Templeton said that Block intends to address a variety of "consumer pain points" and technical issues in the mining world, including mining rig availability, high price, reliability and power consumption.

He wrote that the plan started by digging into 2 big questions which are “what are customer pain points today?” and “what are the specific technical challenges”. After talking to some members of the mining community they found that “for most people, mining rigs are hard to find. Once you’ve managed to track them down, they’re expensive and delivery can be unpredictable. How can we make it so that anyone, anywhere, can easily purchase a mining rig?”, said Templeton.

Secondly, “reliability” found out to be another challenge. In the Twitter thread, Templeton said that “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.”

Then he pointed out another issue related to “performance” and said that in the power grid, some mining rigs produce undesired harmonics. “They’re also very noisy, which makes them too loud for home use. Unsurprisingly, all miners want lower power consumption and higher hash rates,” wrote Templeton.

According to him, Block is forming a hardware team of engineers and software designers to answer these questions. He explained, "Developing products is never a solo journey, and evaluating existing tech is always part of our practice.”

This news comes as no surprise. After all, it's no secret that Dorsey is a bitcoin enthusiast and his company reportedly has invested heavily in Bitcoin. A report from last year has revealed that Block held nearly 8,027 Bitcoins.

Additionally, Dorsey said in August 2021 that he was "trying" to mine bitcoin himself, before floating the notion of Block developing a mining infrastructure in October.

Last year when he tweeted about the road map, Dorsey even wrote that “mining isn’t accessible to everyone. Bitcoin mining should be as easy as plugging a rig into a power source”.

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