Tech giant Block has reached an agreement with a Bitcoin mining firm, Core Scientific. Block will supply the mining firm with new and improved 3-nanometer mining application-specific integrated circuit (ASIC) chips.
The two companies have not yet revealed the finances of the deal. However, the mining chips are expected to yield an additional 15 exahashes per second to Core Scientific’s current mining capacity of 24.6 exahashes per second.
The two companies released a joint press release acknowledging they had come to an agreement that is currently among the largest ASIC agreements in the industry. According to the announcement, the Block Proto team is engineering an improved mining platform around its ASIC chips to unveil important mining solutions that the industry desperately needs.
Block pioneers innovation in the Bitcoin mining sector
our first mining chip customer! https://t.co/JgdTEa8Cdj
— jack (@jack) July 10, 2024
The Proto team expects to create ASIC chips with numerous advantages over existing miner chips. The announcement detailed that Block’s chips are more efficient, reliable, and durable to withstand large-scale Bitcoin mining.
Thomas Templeton, the lead of the Proto team, stated that the agreement between the two companies is a strategic move to promote the decentralization of the mining industry. Russell Cann, Core Scientific’s chief development officer, also commented on the partnership, highlighting that the collaboration will yield the next generation of mining technology.
Jack Dorsey is widely regarded as a crypto pioneer. In 2021, he rebranded his mobile payment company, Square, to its current name, Block. In the same year, Block centered its operations on innovations solving challenges in the Bitcoin mining sector. By October 2021, Block had already unveiled a 5 nm mining chip.
Block launched a beta program for the organization’s Mining Development Kit (MDK), which attempts to solve challenges in the mining industry, such as lack of transparency and limited access to mining equipment.
Miners’ profits dry up amid capitulation concerns
Since April’s halving event, bitcoin miners have been exploring ways to expand revenue. However, they are reportedly facing capitulation levels that were last witnessed during the collapse of the FTX exchange in 2022.
Capitulation periods often result in miners selling part of their mined Bitcoin or reserves or attempting to upgrade their mining equipment to more efficient ones. A Canadian-based Bitcoin miner called Bitfarms updated 39,000 old miners with new and more efficient mining equipment. The miner also sold 134 bitcoins for $8.8 million to curb its revenue shortage and retain its liquidity.
Notably, a report from Crypto Quant suggested that miners have been underpaid since April’s halving. The mining industry saw daily revenues decrease by 63% from $79 million in March to $29 million as of July 5th. The situation has forced miners to seek alternative means to retain their profitability. Bitcoin mining revenue by hash also declined significantly to $0.049 per EH/s, nearing its all-time low of $0.045.
Cryptopolitan reporting by Collins J. Okoth
