Block Announces Development of Bitcoin Mining System

Payments firm Block, formerly known as Square, has revealed plans to develop a Bitcoin mining system in response to challenges encountered by mining operators.

In an April 23 blog post, Block announced the completion of the development of a three-nanometer chip specifically designed for BTC mining, leading to the unveiling of a “full Bitcoin mining system.” 

Block and Bitcoin Mining

This move aligns with CEO Jack Dorsey’s suggestion of a collaborative approach to decentralize Bitcoin mining, first proposed in October 2021.

“We’ve spent a significant amount of time talking to a wide variety of bitcoin miners to identify the challenges faced by mining operators,” said Block. 

“Building on these insights and pursuant to our goal of supporting mining decentralization, we plan to offer both a standalone mining chip as well as a full mining system of our own design.”

Block BTC Mining Chip

Previously, Block had completed a prototype design of a five-nanometer BTC mining chip in May 2023, emphasizing that the centralization of chip development among a few companies was detrimental to the ecosystem. 

Seeking input from the mining community, Block invited comments on challenges related to purchasing miners, maintenance, transparency, and software issues.

“We’ve spent a significant amount of time talking to a wide variety of bitcoin miners to identify the challenges faced by mining operators. Building on these insights and pursuant to our goal of supporting mining decentralization, we plan to offer both a standalone mining chip as well as a full mining system of our own design,” Block said.

Halving and Impact on Miners

In 2023, Intel announced its plans to halt shipping for its Blockscale 1000 Series ASIC (application-specific integrated circuit) mining chips in April, as part of cost-cutting measures. These chips are commonly used for mining proof-of-work cryptocurrencies, including Bitcoin.

Block is also working on a Bitcoin mining system and seeks to bring a “compelling, differentiated mining solution to market.” The company recently recorded a 90% surge in profits as the crypto market surged to new highs.

“Our mining chip will utilize the most advanced semiconductor process currently available and will deliver the performance required for mining operators of all types to survive and thrive in the fifth mining epoch (the period following the recent 4th halving of the block subsidy) and beyond,” Block explained.

The Bitcoin halving event on April 19 reduced the block reward for miners from 6.25 BTC to 3.125 BTC. This event is likely to have a significant impact on the market as miners compete for fewer rewards for the same work until the next halving, expected in another four years.