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Formerly known as Square, the payment company Block announced a plan to develop a Bitcoin mining system in response to the challenges faced by mining operators. In a blog post dated April 23, Block announced the completion of a three-nanometer chip used in Bitcoin mining, which led the company to work on a complete Bitcoin mining system.
Jack Dorsey’s Notable Move
Block CEO Jack Dorsey proposed a collaborative approach in October 2021 to decentralize Bitcoin mining and stated in a public announcement:
“We spent a considerable amount of time talking with a variety of Bitcoin miners to identify the challenges faced by mining operators. Based on these insights and our goal to support the decentralization of mining, we plan to offer both an independent mining chip and a complete mining system of our own design.”
In May 2023, Block completed the prototype web design of a five-nanometer Bitcoin mining chip and claimed that the centralization of chip development in the hands of a few companies was detrimental to the ecosystem. The company called for additional feedback from the mining community on challenges in purchasing miners, maintenance, transparency, and software issues.
Bitcoin Ecosystem and Mining Field
Intel, announced plans in 2023 as part of cost-cutting measures to end shipments of the Blockscale 1000 Series ASIC (application-specific integrated circuit) mining chips in April. These chips are typically used for mining proof-of-work cryptocurrencies, including Bitcoin.
The Bitcoin halving event on April 19 reduced the block reward for miners from 6.25 Bitcoins to 3.125 Bitcoins. Miners will compete for fewer rewards for the same work until the next halving expected in four years, potentially shaking up mining companies.
Despite the halving of mining rewards, a decrease in mining revenues following this halving event is not expected. With the recent Ordinals and Rune hype, the Bitcoin ecosystem has begun to be used by a large community, leading to a significant increase in transaction fees and substantial revenues for mining companies.
