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Jack Dorsey’s Square Considers Building A Global Bitcoin Mining System
Bitcoin-loving-billionaire Jack Dorsey is working on more projects to help protect and scale Bitcoin. His financial services company “Square” might start building consumer-friendly mining machines for use by the general population.
Making Bitcoin Mining Accessible
Dorsey announced his company’s plans over Twitter earlier today. He followed with a long thread explaining the current problems in the mining industry and why it needs reconstruction.
Twitter’s CEO claims that mining needs more distribution to maintain the Bitcoin network’s security over time. He states that the average node operation is not difficult. However, entering the Bitcoin mining industry is almost impossible without industrial-grade energy resources.
Up until only months ago, Bitcoin mining took place mainly in China, under the rules of one government. However, after China banned mining earlier this year, half of all existing hash power left the network within weeks. This event significantly reduced network security. Thankfully, mining has rapidly begun spreading to other areas since then.
“The core job of a miner is to securely settle transactions without the need for trusted 3rd parties. The more decentralized this is, the more resilient the Bitcoin network becomes. True?”– Jack Dorsey, CEO of Square
Besides decentralization, Dorsey also claims that mining needs to be more energy-efficient and eco-friendly. Incidentally, China’s ban also helped reduce the Bitcoin network’s reliance on coal as an energy source. Today, over half of Bitcoin hash power comes from renewable sources in geographic areas less reliant on dirty energy. Nevertheless, there is still a long way to go for innovation in software and integration.
Finally, the CEO highlights how Silicon (ASIC) design is overly concentrated and lacking in market competition. Furthermore, the few existing institutions designing ASICs have poor vertical integration. Therefore, they create major accessibility problems for specific businesses and individuals.
Looking for answers, Dorsey asks his millions of followers where their own issues lie with mining.
There isn’t enough incentive today for individuals to overcome the complexity of running a miner for themselves. What are the biggest barriers for people running miners?
Square’s systemic solution would be using “custom silicon” (specially customized ASICs) and open-source development to lower the mining barriers. As it is the case with Square’s hardware wallet, development will be an open-source project uniting minds in the community.
Investigations into Square’s potential project have already begun, spearheaded by Jesse Dorogusker. His team is already prototyping more energy-efficient silicon to make Bitcoin more ESG friendly.