Block, Inc. thinks it and developers can build better Bitcoin mining rigs. That's why it's considering building a “Mining Development Kit,” or MDK, it said on Tuesday.
The company hopes its do-it-yourself kit will spur innovation in Bitcoin mining hardware, it said in an announcement, alluding to a statement from CEO Jack Dorsey on Twitter in 2021 that the company was “considering building a Bitcoin mining system based on custom silicon and open source.”
Block wrote it would share more details in the coming weeks and months but mused that the MDK would include basic Bitcoin mining rig components, like a hashboard and controller board, open source firmware, software, and lots of documentation.
“We anticipate the MDK being useful for development projects focused on integrating Bitcoin mining into various novel use cases—such as heating solutions, off-grid mining, home mining or intermittent power applications—as well as optimization of Bitcoin mining hardware for traditional commercial mining operations,” Naoise Irwin, Block mining hardware senior product lead, wrote in a blog post.
Block didn't immediately respond to a request for comment from Decrypt.
Irwin, who’s also the co-founder of solar heating company SolarFlux, joined Block last month after starting his career on Wall Street in 2000 and transitioning to tech and strategy a decade later.
Around this time last year, Block, Inc. announced it had contributed $5 million to a partnership with Elon Musk’s Tesla and infrastructure company Blockstream to pilot an all-solar Bitcoin mining facility in Texas.
Since then, Block has also started designing its own Bitcoin mining semiconductor chips—commonly referred to as ASICs, which stands for application specific integrated circuits.
It’s not totally out of place, although hardware accounted for less than 1% of a Block’s $17 billion total net revenue 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, like through its Cash App.
The rest came from hardware, which accounted for $164 million of that total, according to SEC filings.
But the company said it’s 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, like its mining rigs and a self-custody wallet.
“We believe our bitcoin ecosystem can help address inefficiencies in the current financial system, especially with respect to identity and trust,” the company wrote in its annual report.
Still, it had to disclose it’s taken the same kind of battering on its Bitcoin holdings as other publicly traded companies. By the end of 2022, Block has invested a cumulative $220 million in Bitcoin. After factoring in a $118 million impairment loss, the fair market value of Block’s BTC was $133 million.
Although the company’s share price experienced a 21% boost since the start of the year, investors don’t yet seem swayed by Block’s Bitcoin aspirations. The company’s shares ended trading on Tuesday at $78.04, down 3% for the day.