Square Sets Its Sights on Bitcoin Mining
Now that a bitcoin ETF is on its way in the U.S., it’s more hip than ever to be a crypto company. Jack Dorsey’s payments company Square has been committed to proliferating bitcoin adoption, and now they are considering upping the ante.
Dorsey revealed in a tweetstorm that Square is exploring the creation of a bitcoin mining system that is “based on custom silicon and open source for individuals and businesses worldwide.” The company appears to be testing the waters and has not reached an official decision yet. If they proceed, it will be in true Square fashion as they “build in the open in collaboration with the community,” explained Dorsey.
Square is considering building a Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide. If we do this, we’d follow our hardware wallet model: build in the open in collaboration with the community. First some thoughts and questions.
— jack⚡️ (@jack) October 15, 2021
Bitcoin mining is the process of validating transactions on the blockchain, securing the network and creating new coins. Miners are rewarded in bitcoin for solving what are known as complicated proof-of-work (PoW) math problems using software. When they solve the equation, new blocks are added to the public ledger, or blockchain.
Dorsey & Bitcoin
Twitter, Dorsey’s other company, has also made inroads into bitcoin adoption. The social media behemoth has integrated bitcoin payments into the Twitter iOS app and has set its sights on Android integration next.
Galaxy Digital founder Mike Novogratz cheered Dorsey for continuing to invest in crypto while other tech giants, including Facebook, have stalled.
Shares of Square were up fractionally on the day and extended those gains in the after-hours market. Year-to-date, the stock is up approximately 15%. If Dorsey’s company follows through with the project, they will seemingly reduce the barriers to entry to bitcoin mining for individuals and potentially open up yet another revenue stream for Square.
Bitcoin transactions on the Cash App have been a revenue driver for Square. In Q2 2021, Square’s bitcoin sales surpassed $2.7 billion. The company’s profit from bitcoin was a lesser $55 million, a mere 2% of the revenue because “they only apply a small margin to the market cost of bitcoin.”
Bitcoin ETF on the Way
Dorsey’s bitcoin aspirations come as the maiden bitcoin futures ETF is poised to make its debut. The ProShares Bitcoin Strategy ETF, which will trade under the symbol BITO, could begin trading as soon as Monday. NYSE Arca gave the fund the green light even without the U.S. SEC’s approval.