I don't really see why a 64 kB key is a useful feature for a block cipher. 256 bits has sufficient entropy to render any brute force attack, and even severe weakening (e.g. sq root effort attacks) utterly infeasible.
Are large block sizes really that necessary? I can see why a 4 kB block size might be useful for block storage, but there are method of chaining smaller block ciphers so as to effect a larger block size. So why would a native 64 kB block size be desirable? Use of chaining or counter techniques should prevent details of large scale structures from bleeding into the ciphertext.
This is likely not for *encryption*.
First, you need to understand how proof of work functions are currently constructed. The most popular ones today are based off of HashCash in that they use hashes because block ciphers aren't really big enough to create usable hard functions and scalable work functions, (e.g., AES is only 128-bit).
IF (big-IF), there were a secure large block cipher, you could use a different construction for proof of work. For example, you could put the block data you want to protect as the key and attempt find some input data that created your reward address + some variable amount of random crap to scale the work function. Of course, that's probably not very secure as you might want some additional precomputation protection similar to how message authentication codes are made out of block ciphers (CMAC), but hopefully this simple example illustrates the point.
Typical design mechanisms used to make block ciphers wider will necessarily make them deeper (e.g., to get good bit diffusion, you need to have lots of rounds of a typical cipher construction) and thus not very practical for actual encryption. Simple mechanism to encrypt larger blocks (like CBC or counter-mode), offer some amount of diffusion, but in such a structured way which has certain vulnerabilities and even their security often require nonces (which don't work well in a proof of work application).
Anyhow, it would be a bunch of work for 10 BTC. Hardly worth anyone's time, given this bozo is gonna take all the credit, you probably don't even get fame nor fortune...