Block Inc. (SQ) CEO Jack Dorsey tweeted on Thursday that the company is officially building an open bitcoin mining system. After christening the company to Block from Square in December, the CEO had mentioned his intention of entering the blockchain business. Shares of the digital payments company closed down 5.9% at $136.95 on January 13.
Completely Open & Decentralized Bitcoin Mining System
Dorsey had stated last October about building a mining system with custom silicon and open source for all, which thrives on the very essence of the actual blockchain meaning, making it easily accessible to individuals and businesses alike.
Dorsey retweeted the company’s general manager for hardware, Thomas Templeton’s tweet that said, “We want to make mining more distributed and efficient in every way, from buying, to set up, to maintenance, to mining. We’re interested because mining goes far beyond creating new bitcoin. We see it as a long-term need for a future that is fully decentralized and permissionless.”
Templeton pointed out certain issues with the current technology that hinder the common man from mining a bitcoin. With Block’s open system, the company aims to make mining an easy jig. To achieve this, the company is building a bright team of hardware and software engineers.
Some of the common issues with the current mining system include huge power consumption, difficulty accessing the mining equipment, noise generated during mining, and the reliability of the networks which need rebooting time and again.
Dorsey is a huge fan of cryptocurrency and also hoards bitcoins on the company’s balance sheet. The company’s business unit, Cash App allows customers to buy and sell bitcoins, and Block is also working on creating its own physical bitcoin wallet.
Analysts’ Take
Recently, Jefferies analyst Trevor Williams lowered the price target on the stock to $200 (46% upside potential) from $240 while maintaining a Buy rating.
Williams has a challenging view on the stock until FY22 estimates are redone. However, he believes the stock is attractive at the current valuation and has long-term growth potential.
Overall, the stock has a Moderate Buy consensus rating based on 15 Buys and 6 Holds. The average Block price target of $273.45 implies a whopping 100% upside potential to current levels. However, SQ shares have lost around 40% over the past year.
Hedge Fund Activity
TipRanks’ Hedge Fund Trading Activity tool shows that confidence in SQ is currently Positive. In the last quarter, 22 hedge funds increased their cumulative holdings of one of the best blockchain stocks, Block, by 219,500 shares.
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