Block (NYSE: SQ) Chief Executive Officer Jack Dorsey isn't shy about his views on Bitcoin (CRYPTO: BTC). During a Bitcoin conference a few years ago, he said: "I don't think there is anything more important in my lifetime to work on." Dorsey envisions Bitcoin making finance more inclusive and boosting underserved communities worldwide, and Block is making strides in expanding its presence in the Bitcoin ecosystem.

In July, Core Scientific agreed to buy Block's newly developed hardware for its large-scale Bitcoin mining operations. If you're a long-term bull on Bitcoin, here's why Block could be the ideal stock for you.

Block's ongoing push into Bitcoin

In 2018, Block made Bitcoin trading available for Cash App users. It has since expanded how customers can acquire Bitcoin by converting a percentage of direct deposits into Bitcoin, or allowing users to round up transactions and convert that spare change into Bitcoin with no fees. Earlier this year, Block announced it would invest 10% of its Bitcoin gross profit to acquire more Bitcoin.

The payments company, led by its Proto team, is also entering Bitcoin mining with its 3 nanometer mining application-specific integrated circuits (ASICs).

An ASIC is an integrated circuit chip designed for a specific purpose. For example, an ASIC miner is a chip designed solely for mining cryptocurrencies. These chips can be made to mine a particular cryptocurrency and are used in specialized computers that solve cryptocurrency's proof-of-work algorithms -- a necessity since the network of miners has grown, increasing the difficulty of Bitcoin mining.

One problem with current mining ASICs is that their production is concentrated in one provider: Bitmain, a privately held company based in Beijing. According to Dorsey, miners have told him that Bitmain's ASICs are inconsistent and have reliability issues, and that the mining rigs "fail a lot."

"A new paradigm for scaled bitcoin mining"

Block's Proto team is developing a modular mining platform around its ASIC mining chip, which it argues delivers efficiency, reliability, and uptime in large-scale mining operations.

What differentiates Block's ASIC chip is that it is 3 nanometers, compared to Bitmain's 6 nanometer chip. The 3 nanometer ASIC miners are the future of cryptocurrency mining because they can make more powerful, profitable mining rigs.

Core Scientific has worked with Block to develop the technology and is the first company to procure Block's new ASIC technology for large-scale mining operations.

Russell Cann, chief development officer at Core Scientific, says that the chips help support its hash rate growth plans within its existing infrastructure and that it is working with Block "to define a new paradigm for scaled bitcoin mining, one designed to deliver important operational benefits while contributing to the longevity and vitality of the Bitcoin Network."

On the company's most recent earnings conference call, Dorsey said its 3 nanometer ASIC is more reliable, open, and configurable and that "We have a very strong pipeline behind it." He finished with: "I'm fully confident and have no doubt that this is going to be a significant business for us, and we're going to take a majority of the market share."

Is Block stock a buy?

Block is well-positioned, with its Cash App being the most-used investing app among all generations, according to The Motley Fool's Generational Investing Tools survey. It's also in the midst of a multi-year transformation to make its business more efficient by increasing its gross profit and operating margin as it looks to reach the rule of 40.

Bitcoin is a small part of Block's business, which now is dominated by its Square and Cash App products. However, it is diving deeper with its ASIC hardware for Bitcoin mining, and the agreement with Core Scientific demonstrates its commitment to expanding its footprint in the Bitcoin ecosystem.

In the long run, Dorsey envisions integrating Block's various businesses to make it a force to be reckoned with in the payments industry, making it an appealing investment if you're a long-term Bitcoin bull.

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Courtney Carlsen has positions in Bitcoin and Block. The Motley Fool has positions in and recommends Bitcoin and Block. The Motley Fool has a disclosure policy.

Bullish on Bitcoin? Here's Why You Should Consider Block Stock. was originally published by The Motley Fool