Jack Dorsey’s Blockchain Reveals Plans for Bitcoin ‘Mining Development Kit’
Block, Inc. believes so and developers can build better Bitcoin mining rigs. That is why it is considering building a “Mining Development Kit”, or MDK, it said on Tuesday.
The company hopes the do-it-yourself kit will spur innovation in Bitcoin mining hardware, it said in an announcement, alluding to a statement by CEO Jack Dorsey on Twitter in 2021 that the company was “considering building a Bitcoin mining system based on custom silicon and open source code.”
Block wrote that it would share more details in the coming weeks and months, but believed that the MDK would include basic Bitcoin mining rig components, such as a hashboard and controller board, open source firmware, software, and lots of documentation.
“We expect MDK to be useful for development projects focused on integrating Bitcoin mining into various new use cases – such as heating solutions, off-grid mining, home mining or intermittent power applications – as well as optimizing Bitcoin mining for traditional commercial mining operations,” wrote Naoise Irwin, senior product manager for Block Mining Hardware, in a blog post.
Block did not immediately respond to a request for comment from Decrypt.
Irwin, who also co-founded solar heating company SolarFlux, joined Block last month after starting his career on Wall Street in 2000 and moving into technology and strategy a decade later.
Around this time last year, Block, Inc. announced that it had contributed $5 million to a partnership with Elon Musk’s Tesla and infrastructure company Blockstream to pilot a Bitcoin mining facility in Texas.
Since then, Block has also started designing its own Bitcoin mining semiconductor chips – commonly referred to as ASICs, which stand for application-specific integrated circuits.
That’s not entirely out of place, even though hardware accounted for less than 1% of a block’s total net revenue of $17 billion in 2022. The bulk of it was generated from transactions, services, and Bitcoin. Block generates Bitcoin revenue when it buys and then sells BTC to its customers, for example through the Cash app.
The rest came from hardware, which made up $164 million of the total, according to SEC filings.
But the company said it is set to make a big push into the “Bitcoin ecosystem” with Spiral, an independent team contributing to open source projects; TBD, an open decentralized finance developer platform; and hardware projects, such as the mining rigs and a self-storage wallet.
“We believe our bitcoin ecosystem can help address inefficiencies in the current financial system, particularly with respect to identity and trust,” the company wrote in its annual report.
Still, it had to reveal that it has taken the same kind of hit on Bitcoin holdings as other listed companies. By the end of 2022, Block has invested a total of $220 million in Bitcoin. After factoring in a loss of $118 million, the real market value of Block’s BTC was $133 million.
Although the company’s share price experienced a 21% increase since the start of the year, investors do not yet appear to be swayed by Block’s Bitcoin ambitions. The company’s shares ended trading on Tuesday at $78.04, down 3% for the day.
