Block is Attempting to Decentralize Bitcoin Mining

Square is taking up the Bitcoin Champion Mantle

Bitcoin’s rise to the mainstream digital gold status has been spectacular in the Bitcoin Second Bull Market. After peaking at a price of $67,000 Bitcoin has corrected now to around $42,000.

The One True Jedi of Bitcoin Has Arrived

Block, the payment company formerly known as Square, is working on building an “open Bitcoin mining system,” its CEO Jack Dorsey has announced.

Jack Dorsey has turned into a Bitcoin Evangelist to an absurd degree in recent years.

jack⚡️ @jack

We’re officially building an open bitcoin mining system ✨

Thomas Templeton @TempletonThomas

In October we announced that we’re considering building a bitcoin mining system, out in the open & alongside the community, and we’ve decided…we’re doing it! We thought we’d share some more details on how our initial discussions are going and where we’re headed next. https://t.co/wURxEKBpJ5

January 13th 2022

3,511 Retweets23,900 Likes

I’m not sure how Block centralizing Bitcoin with the likes of Coinbase, Bitmain, Binance and others is creating a better crypto world. The overall aim is to make mining more decentralized, in turn making the overall Bitcoin network more resilient. This as it seems younger blockchain ecosystems have a leg up on older networks like Bitcoin and Ethereum.

Block changed its name from Square late last year to denote a broader mission that includes blockchain and economic empowerment. Blockchain is leading to a wave of new stable coins and CBDCs. CBDCs are fiat currencies like the U.S. dollar, euro or the Japanese yen, as they are issued by central banks of their respective nations in a digital form.

While digital ledger technology is becoming mainstream, it’s hard to argue crypto is becoming mainstream as much more than digital assets or stores of value. While Elon Musk likes to manipulate price of Dogecoin, Jack likes Bitcoin.

As the cryptocurrency’s value has increased, and it’s become more challenging to mine without economies of scale, there have been fears that the network has become centralized on too small a group of miners.

“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.” This as him and his Silicon Valley buddies have become the whales of a new era of crypto centralization of ownership.

Can Block Become the Bitmain of the West?

According to Templeton, Block is open to building its own ASIC (a custom chip optimized for a single purpose — in this case mining Bitcoin), but that the team will also include software designers.

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. To me it just sounds like Block wants to be the Bitmain of the West.

Bitmain is a privately owned company headquartered in Beijing, China that designs application-specific integrated circuit chips for bitcoin mining. That Silicon Valley tycoons talk about decentralization is very precarious and hard to fathom if they take their own words and mantras seriously?

Building a Better Crypto User Experience

As well as its mining system, in July last year Block (then Square) announced it was building a Bitcoin hardware wallet with the aim of making “Bitcoin custody more mainstream.” Square also previously allowed its customers to buy and sell Bitcoin using its Cash App. Clearly Block cares about the crypto movement’s potential to drive profits a lot.

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. Templeton writes that Block also looking to improve reliability and the user experience of mining.

Dorsey has long been an avid supporter of Bitcoin, and his Twitter bio continues to simply be “#Bitcoin.” He finally gave up being a double CEO to devote himself to this Bitcoin religion that’s really more about greed than decentralization.