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Block’s 3nm Bitcoin Mining Chips Debut with Core Scientific Deal
In a significant move for the Bitcoin mining industry, financial technology giant Block, led by Jack Dorsey, has announced its first major sale of newly developed 3-nanometer (3nm) mining chips. The buyer is Core Scientific, one of North America’s largest Bitcoin mining firms, in a deal that promises to reshape the landscape of cryptocurrency mining.
The agreement, announced on July 10, 2024, will see Block supply Core Scientific with mining application-specific integrated circuits (ASICs) representing approximately 15 exahashes per second (EH/s) of hashrate. This substantial increase would boost Core Scientific’s current mining capacity by about 60%, from its June 2024 level of 24.6 EH/s.
Block’s Proto team, responsible for developing the company’s mining tools and self-custody wallet Bitkey, spearheaded the creation of these advanced chips. Thomas Templeton, lead of the Proto team, emphasized the significance of this deal, stating, “This agreement is a good example of how we envision our mining products pushing forward the advancement and decentralization of the mining industry.”
The collaboration between Block and Core Scientific extends beyond a simple supply agreement. The two companies have been working closely to develop a modular mining platform designed to improve efficiency, reliability, and uptime in large-scale mining operations. This platform aims to simplify infrastructure demands and optimize resource utilization within data centers.
Russell Cann, Core Scientific’s Chief Development Officer, highlighted the partnership’s potential impact: “Together, Block and Core Scientific are working to define a new paradigm for scaled Bitcoin mining, one designed to deliver important operational benefits while contributing to the longevity and vitality of the Bitcoin Network.”
The development of these 3nm chips represents a significant technological advancement in Bitcoin mining. Smaller, more efficient chips can enhance processing power while reducing energy consumption, addressing two critical challenges in the mining industry.
Block’s entry into the ASIC market is part of its broader strategy to democratize Bitcoin mining. The company aims to increase the decentralization, transparency, and resiliency of the Bitcoin network by making mining chips available to a wider range of customers, from large operators to smaller entities.
This deal comes at a crucial time for the mining industry, which faced challenges following April’s Bitcoin halving event. The reduction in mining rewards has pushed companies to seek new ways to expand revenues and improve efficiency.
For Core Scientific, this agreement follows a series of strategic moves, including recent 12-year contracts with AI Hyperscaler CoreWeave, expected to generate substantial annual revenue. The company’s stock (CORZ) has shown impressive gains, up 167% over the past two months.