Block’s Chief Financial Officer Amrita Ahuja announced the launch during a Friday interview on CNBC’s Squawk Box. Dorsey hinted at the launch on social media platform X the day before.

Taking on the $6 Billion Mining Market

The Bitcoin mining hardware industry is worth between $3-6 billion annually. Currently, Chinese companies like Bitmain, MicroBT, and Canaan control most of this market. Block aims to become the first major American competitor to challenge their dominance.

“We have very close relationships with our vendors and manufacturers, and we are building in the United States,” Dorsey said during Block’s first quarter earnings call. This American production strategy helps the company avoid problems from trade wars and tariffs that affect overseas manufacturing.

Source: @Jack

The timing is important for Block’s business. The company reported a $93.4 million loss on its Bitcoin holdings in the first quarter, compared to a $233.4 million gain the previous quarter. Bitcoin trading revenue also dropped 15.7% year-over-year to $2.30 billion.

Open-Source Strategy Sets Proto Apart

Unlike other mining chip makers, Block is making Proto completely open-source. This means other developers can see the chip’s design and suggest improvements.

“This is a completely open-source initiative… allowing us to get a lot of feedback from the community and also integrate any improvements right away and just build an entirely new developer ecosystem around mining which has not been done at scale before,” Dorsey explained.

This approach could help smaller mining operations compete with large industrial farms. The open design means more companies can build mining systems using Proto chips, potentially lowering costs and increasing options for miners.

Core Scientific Becomes First Major Customer

Core Scientific, one of the largest public Bitcoin mining companies, has already agreed to buy Proto chips. The deal will provide Core Scientific with 15 exahashes per second worth of mining power. This represents a 60% increase to the company’s current mining capacity.

The agreement is one of the largest Bitcoin mining chip deals announced in terms of total computing power. Core Scientific made a $21.3 million prepayment in January, with chip deliveries expected to begin in the second half of 2025.

Block and Core Scientific have not revealed the total value of their deal. However, the partnership shows that major mining companies are willing to try alternatives to Chinese-made equipment.

Part of Block’s Broader Bitcoin Strategy

Proto Mining fits into Block’s larger plan to build a complete Bitcoin ecosystem. The company already offers Bitcoin buying and selling through its Cash App, which serves 8 million customers. Block also makes the Bitkey hardware wallet and funds open-source Bitcoin projects through its Spiral initiative.

Block recently began rolling out Bitcoin payments for Square merchants. The company plans to offer this service to all 4 million Square sellers by 2026.

“We think Bitcoin can be the open protocol that powers the internet,” Ahuja told CNBC. “Our customers, the efficiency at which their money can move across jurisdictions is much greater when Bitcoin is powering money for the internet.”

Block also automatically converts 10% of its Bitcoin-related profits back into Bitcoin purchases each month. This shows the company’s long-term commitment to the cryptocurrency.

Market Impact and Competition

The Proto chip launch comes as the United States has become the world’s largest Bitcoin mining country. American miners now control about 37% of the global network’s computing power, up from almost nothing before China banned Bitcoin mining in 2021.

However, most of the mining equipment in America still comes from Chinese manufacturers. This creates potential security concerns for government officials who worry about foreign control over critical infrastructure.

Bitmain recently announced plans to open its first U.S. factory by early 2026. The Chinese company is responding to the same trade tensions and government pressure that motivated Block’s domestic production strategy.

American chip maker Auradine, backed by mining company MARA Holdings, has asked the government to limit Chinese mining equipment. The company argues that hundreds of thousands of Chinese machines connected to America’s power grid could pose security risks.

What’s Next for Proto

Block expects the Proto chip launch to help improve its financial performance in the second half of 2025. The company cut its profit growth forecast earlier this year due to economic headwinds and reduced consumer spending.

The success of Proto will depend on whether it can offer better performance or lower costs than established competitors. Block’s open-source approach and American manufacturing could appeal to miners who want alternatives to Chinese suppliers.

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Filed under: Bitcoin - @ August 9, 2025 10:15 pm