Square is mulling over a possible new project: the development of a Bitcoin mining system.
On October 15, the chief executive officer of the digital payments provider Jack Dorsey said in a Twitter thread that the mining system would be based on custom silicon and open source technologies, in which the miner would be built “in the open in collaboration with the community.”
Mining is the way cryptocurrency enters circulation. Computational, cryptographic puzzles are solved by machines to ‘earn’ coins in return for verifying transactions on a blockchain, with the exchange being the PC power and resources required.
However, as more coins are mined, the demands made to mine increases — and there may also be a limit imposed on the number of coins allowed to enter circulation.
As with Bitcoin, there may come a stage when a typical PC cannot perform the tasks required to mine on its own — and this is where mining pools come in. Participants can pool computational resources together to mine and then they can share the profits.
At some point in the future, there will be no Bitcoin (BTC) left to mine, with circulation capped at 21 million, and according to Dorsey, there needs to be an improved, distributed means to mine cryptocurrency without the current complexities involved.
“The more decentralized this is, the more resilient the Bitcoin network becomes,” the CEO says. “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.”
In addition, Dorsey cited the energy consumption required by cryptocurrencies as a problem that may be resolved with improved “silicon, software, and integration.”
Dorsey also said that due to the expense and time required in developing silicon, there is only a handful of companies that operate in this space — which, in turn, can lead to supply constraints.
A team at Square, with Hardware Lead Jesse Dorogusker at the helm, is going to investigate the technical requirements of the mining project. The team has requested feedback from users and the Twitter thread will be updated with any new developments in the future.
Dorsey had previously hinted that a new cryptocurrency project was in the works, labeled “TBD” in July this year.
At the time of writing, the price of BTC has reached $61,812, having recovered from a dip on October 13 of $54,600.
Previous and related coverage
- How to build a cryptomining rig: Bitcoin mining 101
- Bitcoin miners earn over 50% total revenue mining 2GB block on the blockchain
- 170 Android cryptocurrency mining scam apps steal $350 000 from users
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