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Jack Dorsey's Block Snaps Up Bitcoin Mining Chip as Intel Winds Down Production
The payments company could start selling bitcoin mining hardware as early as next year.
Updated Apr 28, 2023, 8:24 p.m. Published Apr 28, 2023, 12:30 p.m.
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Jack Dorsey's fintech-payments company Block (SQ) recently bought a large number of bitcoin mining chips from Intel (INTC), which will accelerate its plans to enter the mining hardware market just as the chipmaker winds down production.
The purchase will help it bring mining machines to the market as it focuses on developing its cutting-edge 3-nanometer chips. Intel announced in February a last date for the production of its bitcoin mining application-specific integrated circuits (ASIC) in April 2024 as it discontinues the chip.
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Block recently jumped on the opportunity to buy a large quantity of these ASICs from Intel, it said in a Friday blog post. The firm was planning on finalizing its design of a 5-nanometer chip for bitcoin mining this quarter and build machines based on that. The purchase means that the team can focus exclusively on the 3-nanometer design, the post said.
Nanometers in chip design refer to the size of each transistor, millions of which are packed together make up a chip. The smaller the transistors, the more that can fit on a chip so it can run more calculations, making for a more powerful chip.
Block's first-party products will come early next year, said Thomas Templeton, Block's hardware lead, in an interview with CoinDesk. Asked about the quantity of chips the company bought, he said it is enough to bridge the time until Block can design and productize its own 3-nanometer chips.
Block said it aims to improve the decentralization of the Bitcoin network. When it comes to mining, "the main problem" is "the diversity of manufacturing and supply chain," said Templeton. "We want to make more more tools for more people to build and use. When you dig into mining, the ASIC is at the center of mining."
The mining manufacturing industry is dominated by two players: Bitmain and MicroBT.
In March, Block announced it was working on a mining development kit, which will allow other engineers to create products using Block's chips. This will provide developers with a suite of tools to unlock innovation in bitcoin mining hardware, the firm said. Block is open sourcing this technology and wants the community to contribute to its development, which is why it announced the kit, Templeton said.
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