In an exciting development for the world of cryptocurrency, Jack Dorsey’s company, Block (formerly known as Square), has announced the completion of a three-nanometer chip for Bitcoin (BTC) mining. This move aligns with Dorsey’s vision of decentralizing BTC mining, which he proposed in October 2021.
The Philosophy Behind Decentralizing BTC Mining
The philosophy behind decentralizing BTC mining is to make the network more robust against potential attacks. When more parties participate in the mining process, the risk of centralization decreases. Centralization in mining can lead to a situation where a single entity or a small group of entities possess enough computing power to influence blockchain verifications, commonly known as a “51 percent attack.”
A Chip to Break the Dominance of Chip Manufacturers
The new three-nanometer chip developed by Block aims to reduce dependence on a small number of chip manufacturers that have traditionally dominated the market. By offering an alternative chip solution, Block is taking a step towards decentralizing BTC mining. But that’s not all – Block also plans to provide a complete mining system developed to its own specifications.
This comprehensive mining system includes both hardware and software tailored specifically for Bitcoin mining. By offering a complete solution, Block aims to address the challenges faced by miners in purchasing mining equipment, maintenance, transparency, and software-related issues.
Higher Income for Miners
One concern surrounding the Bitcoin network’s halving event is the reduction in rewards for verifying transactions, which puts pressure on miners. However, contrary to expectations, miners have actually seen higher revenues following the fourth halving.
Miners now earn approximately 22 bitcoins per day, compared to the previous 7 bitcoins. This increase is primarily due to higher transaction costs on the network. Innovations like the Runes protocol, which simplifies the launch of tokens on the Bitcoin blockchain, have led to a surge in transaction numbers. As a result, miners receive higher fees per transaction, contributing to their increased earnings.