Lucas Jackson/Reuters
- Square is looking at getting into the bitcoin-mining rig business, Jack Dorsey said Friday.
- The simple-to-use system would be designed for individuals and businesses around the world.
- "Bitcoin mining should be as easy as plugging a rig into a power source," Dorsey said.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
Square CEO Jack Dorsey said the digital payments company is weighing up whether to create a simple-to-use bitcoin mining rig, and laid out how the generally available product could help the industry.
"Square is considering building a bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide," CEO Dorsey said in a tweet late Friday.
"If we do this, we'd follow our hardware wallet model: build in the open in collaboration with the community."
Bitcoin's price hit a six-month-high of $62,000 following Dorsey's tweet on Friday, according to data from CoinDesk, taking its year-to-date gains to 114%. It was last trading around $62,179 on Monday.
To mine the cryptocurrency, miners use specially-designed computer equipment to verify transactions in the process that creates newly-minted bitcoins.
In his Twitter thread, Dorsey identified five issues in bitcoin mining. One was that mining is not accessible to everyone.
"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," he said.
Dorsey has previously touted bitcoin as one of the most important projects he wants to work on, saying he would leave the helm of Square and Twitter if the cryptocurrency needed more help. Square holds about 8,000 bitcoins worth $496 million as of Monday, according to Bitcoin Treasuries.
Bitcoin mining needs to be more distributed and energy-efficient, according to Dorsey.
"The core job of a miner is to securely settle transactions without the need for trusted 3rd parties," he said. "This is critical well after the last bitcoin is mined. The more decentralized this is, the more resilient the bitcoin network becomes."
The environmental impact of bitcoin's electricity usage is a hotly debated topic. Dorsey said innovation in silicon, software, and integration will help resolve the energy debate surrounding the cryptocurrency.
The Square CEO also said that silicon design is concentrated in the hands of a few companies, which has likely squeezed supply. He questioned why there were not more companies involved in the industry. Also at issue is the integration between the software, hardware and distribution aspects of mining rigs.
Crypto mining is one way to be involved in the digital currency industry beyond purchasing coins. Dorsey said in August that he was "trying" bitcoin mining with the help of service provider Compass Mining.
A bitcoin mining rig expands Square's ambitions in crypto. In June, Dorsey said Square was looking at creating a non-custodial hardware wallet for bitcoin, which would give owners sole control of private keys. In July, he said it was building a bitcoin-inspired financial services business.
The global crypto mining hardware market is expected to grow by $2.8 billion at a compounded annual rate of over 7% from 2020-2024, according to market-research firm Technavio.
A team led by Square's hardware lead, Jesse Dorogusker, is set to review requirements for Square to take on the bitcoin mining project.
"We will incubate the bitcoin mining system project inside Square's hardware team, starting with architecture, design, and prototyping of more efficient silicon, hashing algorithms, and power architectures," Dorogusker said in a tweet on Friday.