Jack Dorsey’s Fintech Block Secures Large Lot of Intel Chips for Bitcoin Mining

shares in this article

Forex in this article

• Block wants to enter the mining hardware market
• Purchased a large batch of Bitcoin mining ASICs from Intel
• Design team is now focused on developing a 3nm chip

After his retirement from Twitter focuses Jack Dorsey now relies on its mobile payment service Block and is expanding it into a blockchain company. Now the fintech also wants to enter the market for mining hardware. With the development of its own devices, Block wants to counteract the strong centralization in Bitcoin mining ASICs, because this market is currently dominated by two major providers – Bitmain and MicroBT.

What is mining?

Decentralized digital currencies, ie digital currencies not controlled by governments and banks, are created through what is known as mining. However, the coins are not actually “created” by miners. Rather, they receive virtual money for making their computing power available for global transactions: In daily payment transactions, the lists of transactions made are summarized in blocks and when they are “full”, they are completed. To save storage space and ensure security, this information is converted into a complex combination of characters – so-called hashes. The list of these consecutive hashes is called the blockchain. It is now the miners who provide the computing power needed to track down newly completed blocks, hash them, and then add them to the blockchain. For this, the miners are rewarded with new coins.

ASIC – special mining hardware

There may be simple arithmetic tasks involved in mining that do not require the financial and computational effort that a general-purpose CPU would entail. Special graphics cards, the Application-Specific Integrated Circuit (ASIC), were therefore developed for this purpose, which are particularly suitable for mining Proof-of-Work cryptocurrencies such as Bitcoin. They are a significantly simpler and more efficient alternative in terms of both cost and energy consumption.

Intel mining chips

Since Block’s main stated goal is to decentralize the Bitcoin network, the company is currently working on developing its own state-of-the-art 3nm chips. But to bridge the time until its own 3-nanometer chips are developed and produced, Block recently acquired a “large batch” of Bitcoin mining ASICs from Intel. Block announced this in a blog post at the end of April.

The original plan was to complete development of a 5nm chip this quarter and produce mining hardware based on it. But then the opportunity to buy the Intel chips was seized. This allows Block’s design team to now fully focus on developing the better 3nm chip.

In chip design, nm (nanometers) describes the size of the transistors. The smaller the transistors, the more space there is on a chip and the more powerful the chip becomes.

Intel withdraws from production of Bitcoin mining chips

While Block is entering the mining hardware market, Intel, on the other hand, plans to stop making chips for miners anytime soon. It’s barely a year since Intel unveiled a new chip specifically designed for Bitcoin mining, but the US company recently announced that it would discontinue production for cost reasons. Accordingly, orders for Bitcoin mining ASICs of the Blockscale 1000 series should only be accepted until October 20th. Deliveries should then be made by April 20, 2024.

The semiconductor veteran intends to outsource the manufacture of certain chips as a priority in order to concentrate on smaller and faster chips. In connection with this so-called IDM 2.0 strategy, other product categories that were not part of Intel’s main business were also discontinued. The exit from the mining business is just one of many measures intended to reduce overall costs. But even if Intel is initially leaving the crypto industry and shifting its focus to other projects, at least for the time being, the chip giant still wants to keep an eye on the “market opportunities” there.

Editorial office finanzen.net

Image Credits: John Chiala/CNBC/NBCU/Photo Bank via Getty Images, lp-studio / Shutterstock.com