Square CEO Jack Dorsey said late on Friday the company might jump into the bitcoin mining business.
Dorsey tweeted that the company is considering a “bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide.” The price of bitcoin rose above $62,000 following Dorsey’s string of tweets, as the world’s most popular cryptocurrency pushes toward its all-time high.
Dorsey’s goal would be to make crypto mining — the process of creating new bitcoins by solving increasingly complex computational problems — more accessible, much as Square’s original vision was to make it easier for small businesses and independent proprietors to take credit card payments. He wrote that bitcoin mining should be “as easy as plugging a rig into a power source.” Today, the bitcoin mining industry is dominated by large-scale players who can afford to buy tens of thousands of ASICs, the type of specialty gear used to mint new coin.
The team run by Jesse Dorogusker, who is the hardware lead at Square, will begin studying the technolody necessary to take this project on, according to Dorsey.
“We will incubate the bitcoin mining system project inside Square’s hardware team, starting with architecture, design, and prototyping of more efficient silicon, hashing algorithms, and power architectures,” Dorogusker wrote in a tweet.
Dorogusker said that Afshin Rezayee, the leader and architect of Square’s silicon team in Toronto since 2015, will lead the project, given silicon is at the core of this new initiative.
“Building a strong core in silicon is just a start. Delivering the value we imagine requires the full stack – silicon, hardware, software, manufacturing, and innovative distribution that can help us support the whole world,” continued Dorogusker.
Dorogusker is also leading Square’s project to build a crypto wallet.
Bitcoin mining should be easy, says Dorsey
Dorsey, who is also the CEO of Twitter, also outlined his thinking on why Square is looking to enter an already crowded field.
“Mining needs to be more distributed,” Dorsey wrote in a tweet. “The more decentralized this is, the more resilient the bitcoin network becomes.”
Dorsey shared in August that he personally was getting into minting bitcoin himself, with the help of bitcoin mining service provider Compass. In his tweets late Friday, the Square CEO advocated for this kind of egalitarian access to the mining world.
“Mining isn’t accessible to everyone,” wrote Dorsey. “Bitcoin mining should be as easy as plugging a rig into a power source. There isn’t enough incentive today for individuals to overcome the complexity of running a miner for themselves.”
The Square CEO went on to share his thoughts on the need for more of a focus on vertical integration, as well as on silicon design, which he says is too concentrated among a few companies.
The Square boss also jumped into the energy debate surrounding bitcoin’s carbon footprint.
“Driving towards clean and efficient energy use is great for bitcoin’s economics, impact, and scalability. Energy is a system-level problem that requires innovation in silicon, software, and integration. What are the largest opportunities here?” continued Dorsey.
The announcement from Square comes as the U.S. eclipses China for the first time ever as the world’s top destination for bitcoin miners. The U.S. is also flush with renewable power sources.
Washington state is a mecca for hydropowered mining farms. New York produces more hydroelectric power than any other state east of the Rocky Mountains, and it counts its nuclear power plants toward its 100% carbon-free electricity goal. Meanwhile, Texas’ share of renewables is growing over time, with 20% of its power coming from wind as of 2019. The Texas grid also continues to rapidly add more wind and solar power.
Texas also has a deregulated power grid with real-time spot pricing that lets customers choose between power providers, and crucially, its political leaders are pro-crypto. Those are dream conditions for miners who want a kind welcome and cheap energy sources.
“If you’re looking to relocate hundreds of millions of dollars of miners out of China, you want to make sure you have geographic, political, and jurisdictional stability. You also want to make sure there are private property rights protections for the assets that you are relocating,” said Darin Feinstein, co-founder of Core Scientific.