Square’s Jack Dorsey Says Company Looking to Build Bitcoin Mining System
Dorsey says that mining needs to be distributed and is in the hands of too few people.
Blockworks exclusive art by Axel Rangel
key takeaways
- Jack Dorsey says that Square’s next venture will be bitcoin mining, following the company’s hardware wallet model
- This would see Square compete with China-based bitcoin mining giants like Bitmain and Canaan
Square has begun work on an open-source bitcoin mining system according to a Friday tweet from company founder and CEO Jack Dorsey.
Dorsey believes that mining needs to be more distributed and efficient, arguing that “silicon design is too concentrated into a few companies”. He also said that mining isn’t accessible to everyone and should be as easy as plugging a rig into a power source.
Currently the bitcoin mining manufacturing industry is concentrated into a handful of companies largely based in China such as Bitmain, Bitfury, and Canaan.
Given a recent rise in the global demand for semiconductors, bitcoin mining companies have trouble obtaining volume from chip fabricators like Taiwan Semiconductor as their relatively low number of orders compared to electronic giants such as Apple, Tesla, AMD, or Nvidia don’t make it a priority for fab time.
TSMC has a virtual monopoly on the high-end chip manufacturing business, required to produce semiconductors useful for the latest generation of bitcoin miners, given its advanced process nodes but rivals in China like SMIC are trying to catch up. Reportedly, TSMC gives bitcoin mining its lowest priority given the wild swings in demand that follow the price of bitcoin. As a vertical, crypto mining effectively went to zero for TSMC after the crash of 2017.
Bitmain has had particular trouble sourcing the necessary fab time for TSMC, as earlier this year it was caught setting up front companies in Taiwan to poach engineers and drain TSMC of trade secrets as Bitmain seeks to diversify away from just making bitcoin miners.
Square has not commented further on this, nor provided a timeline for the release of their minter.
The price of bitcoin is now at $62,537, up 16% on-week, according to CoinGecko.
See what your peers at Goldman Sachs, JPMorgan Chase, Andreessen Horowitz and more are reading every night. Get our daily newsletter that helps thousands of investors understand the markets. Sign up for free.
