Block develops its own 3-nanometer chips and partners with Core Scientific to scale up Bitcoin mining operations.

Financial services technology company Block, led by Jack Dorsey, ticker symbol: SQ, announced a partnership with Bitcoin mining company Core Scientific to provide its self-designed three-nanometer mining chips to Core Scientific's data centers, scaling Bitcoin mining operations and optimizing data center usage.

Block Develops In-House Three-Nanometer Chips Specifically Designed for Modular Bitcoin Mining Platforms

Block announced in April that it has completed the development of three-nanometer chips for Bitcoin mining and plans to offer standalone mining chips and its own designed complete mining systems. The goal is to become the only major mining hardware supplier providing independent mining chip solutions.

The ASIC mining chip designed by its Proto team represents approximately 15 EH/s of hashing power. The team has developed a modular mining platform around this chip to provide an innovative integrated Bitcoin mining solution. Compared to existing mining system designs, this solution offers various advantages that can improve efficiency, increase reliability and uptime for large-scale mining operations. It aims to simplify infrastructure requirements, optimize data center space and operational resources within data centers such as those operated by Core Scientific, and prioritize sustainability and compatibility by integrating with existing infrastructure and promoting the reuse of non-ASIC elements in hardware stacks.

The primary goal of the Proto mining project is to enhance the decentralization, transparency, and resilience of the Bitcoin network. This is achieved through collaboration with the mining community to develop mining chips, systems, and software solutions in an open and transparent manner, including the currently in testing phase Mining Development Kit (MDK).

Core Scientific Seeks New Revenue Source in AI Besides Mining

Since the Bitcoin halving in April led to reduced miner rewards, Bitcoin miners have been seeking ways to diversify their income. In June, Core Scientific signed a series of 12-year contracts with AI Hyperscaler CoreWeave. The company expects the agreement to generate an average annual revenue of around $290 million.

Russell Cann from Core Scientific stated: "We have been working closely with the Block team to develop the next generation of mining technology, which not only helps support our significant computational growth plans within our existing infrastructure but also provides more machine options for all mining companies."

Block and Core Scientific are working together to define a new paradigm for scalable Bitcoin mining that can provide significant operational benefits while contributing to the longevity and vitality of the Bitcoin network.

Analysts from research and brokerage firm Bernstein have given Core Scientific an outperform rating, citing the company's hybrid Bitcoin mining and artificial intelligence data center strategy.

Bitcoin miners are becoming attractive partners to establish AI data centers with "electrical interconnection" and data center operational capabilities.