Block, the company founded by former Twitter CEO Jack Dorsey, introduced a new bitcoin mining system designed for a ten-year equipment lifespan. The fintech company developed Proto Rig — a modular system that aims to change the traditional three to five-year upgrade cycle of mining devices to equipment with a lifespan of ten years or more.
A revolutionary approach to mining
A key feature of Proto Rig is its modular design. Instead of fully replacing devices, miners can replace individual hash boards as technologies improve. This approach can reduce upgrade costs by up to 20% per refresh cycle.
In addition to Proto Rig, Block also introduced Proto Fleet — an open-source platform for managing large-scale mining operations.
The latest announcement is a continuation of Block's recent expansion into the mining equipment sector. In April 2024, the company developed a 3-nanometer chip for bitcoin mining $BTC , and later signed a supply agreement with Core Scientific.
Bitcoin mining remains an extremely expensive and demanding industry. Professional equipment costs over $10,000, not counting significant electricity expenses to operate it.
At current prices, mining companies are producing bitcoins worth over $50 million daily. However, profitability ultimately depends on variable factors: the cost of electricity, mining difficulty, and equipment efficiency.
The initial reaction of the industry to Proto Rig was mostly positive. Komodo Platform's Chief Technology Officer Kadan Stadelmann noted that Block's approach of publishing open source code 'aligns with the original decentralized spirit of bitcoin.'
From traditional schemes to new opportunities
«Traditional mining devices operate for three to five years, and then they are sent to the landfill. Miners are forced to constantly pay for upgrades to monopolistic equipment manufacturers like Bitmain,» explained Stadelman.
According to him, Block offered a modular design for bitcoin miners. The equipment is designed for a longer lifespan and provides greater power per rack unit, democratizing bitcoin mining.
Miners are capitalizing on the AI boom
Several mining companies are striving to increase revenues by repurposing their infrastructure for other tasks, including high-performance computing and artificial intelligence. Others prefer to hold onto mined bitcoins in anticipation of further price increases.
Core Scientific, before its acquisition, was an example of how a bitcoin miner can pivot to artificial intelligence to restore its business. The company filed for Chapter 11 bankruptcy in 2022 during the bear market and then received a lifeline of $3.5 billion from CoreWeave in less than two years.
In July, CoreWeave acquired Core Scientific in a $9 billion deal.
Mining company Hive Digital began pivoting to high-performance computing and AI in 2022. Revenues from high-performance computing appeared in the company's profit and loss report the following year. Since then, the company has accelerated its push into these sectors while maintaining optimism about its bitcoin mining operations.
