Square (SQ) is exploring the possibility of developing a Bitcoin mining system based on “custom silicon and open source for individuals and businesses worldwide.” Citing posts on Twitter (TWTR) by CEO Jack Dorsey, Bloomberg reports that the new push is part of an effort to make mining more distributed. SQ shares rose 0.64 % to close at $249 on October 15.
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Square provides credit card payment processing solutions. It also provides reporting, analytics, and next-day settlement.
In his tweets, Dorsey reiterated the need to decentralize mining to make the Bitcoin network more resilient. Additionally, the executive insists on mining being more efficient, thus ensuring cleaner and more efficient energy use. In a series of posts, the Square executive questions why silicon design is concentrated in a few companies, leading to supply overlay constraints.
According to the executive, silicon development is quite expensive and requires long-term investment. While not everyone is able to partake in Bitcoin mining, that should not be the case according to Dorsey, who believes it should be simplified. (See Top Smart Score Stocks on TipRanks)
Dorsey tweeted, “There isn’t enough incentive today for individuals to overcome the complexity of running a miner for themselves. What are the biggest barriers for people running miners?”
Consequently, Dorsey has confirmed the formation of a Square team that will start a deep technical investigation on whether to work on making Bitcoin mining decentralized and as easy as possible.
Recently, Atlantic Equities analyst Kunaal Malde upgraded the stock to a Buy from a Hold and set a $300 price target, implying 20.48% upside potential to current levels. According to the analyst, Square boasts solid growth prospects as it continues to make strides into the Consumer and Business Banking sectors.
Consensus among analysts is a Moderate Buy based on 18 Buys, 4 Holds, and 1 Sell. The average Square price target of $315.76 implies 26.81% upside potential to current levels.
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