The San Francisco financial-services provider already is a big player in bitcoin, offering wallet and transaction capabilities to its customers.
The company owned 8,027 bitcoin as of February. With the digital currency recently trading at $60,157, that’s valued at $483 million.
As for Square’s mining plans, it’s “considering building a bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide,” Dorsey tweeted. (He's also CEO of Twitter. (TWTR) - Get Twitter, Inc. Report)
“If we do this, we’d follow our hardware wallet model: build in the open in collaboration with the community.”
He offered several views about Bitcoin mining in a series of tweets:
· “Mining needs to be more distributed.
· “Mining needs to be more efficient.
· “Silicon design is too concentrated into a few companies.
· “There isn’t enough focus on vertical integration.
· “Mining isn’t accessible to everyone.”
Square stock on Monday closed at $252.20, down 1.3%. It has eased 3% over the past six months.
Morningstar analyst Brett Horn, likes Square, but assigns it a narrow moat and puts fair value at $112.
“We think Square’s business model, characterized by efficient client onboarding, innovative point-of-sale devices, flat fees, and an internally developed and integrated set of software solutions, allows the company to reach and retain micro merchants that are unviable for other acquirers,” Horn wrote in August.
“But we see Square as a narrow-moat niche operator, not a disrupter, with market share limited by its relatively high pricing and long-term margins constrained by its relative lack of scale.”