Block, Inc. (SQ) and Core Scientific (CORZ) have entered into a landmark agreement that will see Core Scientific receive Block’s newly developed 3-nanometer mining ASICs, enhancing Core Scientific’s hashrate by approximately 15 EH/s (exahashes per second).
This collaboration marks one of the most significant advancements in Bitcoin mining technology, setting a new benchmark in the industry.
A Joint Initiative To Expand Mining Technical Power
our first mining chip customer! https://t.co/JgdTEa8Cdj
— jack (@jack) July 10, 2024
As announced on July 10, the agreement between Block and Core Scientific involves the supply of Block’s cutting-edge 3-nanometer ASICs, developed by Block’s Proto team.
These ASICs are expected to substantially boost Core Scientific’s mining capacity, which currently stands at 24.6 EH/s, by nearly 15 EH/s.
“The primary purpose of Proto’s mining initiative is to increase the decentralization, transparency, and resiliency of the bitcoin network,” the companies stated in a joint press release.
The initiative includes developing mining chips, systems, and software solutions, such as the Mining Development Kit (MDK), currently in beta testing.
Thomas Templeton, lead of the Proto team at Block, emphasized the significance of this collaboration:
“This agreement is a good example of how we envision our mining products pushing forward the advancement and decentralization of the mining industry. Core Scientific is known for its high standards of operational excellence, advanced infrastructure, and deep expertise in mining.”
Block, co-founded by Jack Dorsey, has been increasingly involved in cryptocurrency and decentralized technology since its rebranding from Square in December 2021.
The company’s venture into bitcoin mining began in October 2021, amidst a global semiconductor shortage. By early 2023, Block had completed a prototype for a 5nm bitcoin mining chip and has now progressed to the more advanced 3nm version.
Block and Core Scientific Partnership Impact
In April, Block announced the completion of its 3nm Bitcoin mining chip development, engaging a leading global semiconductor foundry for final design touches.
These chips are designed to improve mining hardware efficiency while reducing energy consumption, addressing the substantial computational resources needed for Bitcoin mining.
Since the April Bitcoin halving, which halved miner rewards, Core Scientific has been seeking ways to enhance revenue.
In June, the company secured 12-year contracts with AI Hyperscaler CoreWeave, which is projected to generate around $290 million in average annual revenue.
Core Scientific’s chief development officer, Russell Cann, highlighted the partnership’s benefits:
“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 agreement significantly strengthens Core Scientific’s position in the bitcoin mining sector. Analysts at research and brokerage firm Bernstein recently rated Core Scientific as outperforming, citing the firm’s hybrid bitcoin mining and AI data center strategies.
“Bitcoin miners are emerging as attractive partners to build out AI data centers with ‘ready power interconnect’ and data center operating capabilities,” Bernstein analysts noted.
The partnership between Block and Core Scientific is set to transform the Bitcoin mining landscape. The introduction of 3nm ASICs is expected to enhance Core Scientific’s operational efficiency and contribute to the decentralization and transparency of the Bitcoin network.
Amid this new development, Federal prosecutors are investigating Block, focusing on alleged compliance lapses within its Square and Cash App units. The investigation, revealed by NBC News, involves allegations from a former employee about inadequate customer information collection, processing transactions with countries under U.S. sanctions, and facilitating cryptocurrency transactions for terrorist groups.
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