Dorsey, who is also the co-founder of
(ticker: TWTR), said in a tweet that Square was starting a technical investigation into building a Bitcoin mining system that could be widely used by individuals and businesses. He also encouraged feedback from the public over its development.
Bitcoin mining is a process that both underpins the blockchain—the decentralized ledger technology on which Bitcoin and other cryptos are based—and governs how new coins are added into circulation. Bitcoin miners use computers to solve complex mathematical problems which validate Bitcoin transactions and add them onto the blockchain. Miners are rewarded with Bitcoin.
Dorsey raised key issues surrounding Bitcoin and mining in a Twitter thread announcing Square’s new initiative, noting that the process should be more distributed and decentralized to make the network more resilient.
“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,” Dorsey said.
The Square CEO also said that the mining process needs to be more efficient, with the drive toward clean and efficient energy use being crucial for Bitcoin’s economics and scalability. “Energy is a system-level problem that requires innovation in silicon, software, and integration,” he said.
Dorsey added that silicon design—which describes the intellectual property of computer chips—is too concentrated among a few companies, making chip development very expensive. Square’s project would use custom-made chips with designs that would be made available publicly.
The fintech executive has long been a proponent of Bitcoin. When
(SQ), as well as PayPal (PYPL), made crypto services available to customers late last year, it was a milestone in the road to institutional adoption of Bitcoin and other crypto assets. The move also helped kick off a frenzy of retail investor interest in Bitcoin.
Square stock fell 0.2% in premarket trading Monday, in line with U.S. stock market futures, which were lower. The price of Bitcoin rose more than 6% from around $59,000 Friday to highs close to $62,600 over the weekend, and was holding steady near $62,000 early Monday.
The crypto reached an all-time high of nearly $65,000 in April, according to data from CoinDesk, with Dow Jones Market Data recording a record high of near $63,500. Bitcoin has climbed some 425% since mid-October 2020, when it was changing hands around $12,000.
The recent rally in Bitcoin prices comes amid expectations that an exchange-traded fund tracking futures contracts for the leading crypto would begin trading this week.
Write to Jack Denton at [email protected]