1. Begin with a new file, and with a white background, the size doesn't matter. Then take the Text Tool and type something.
2. Now head over to the layers palette and right click on your text layer, choose Duplicate Layer. Then right click on the duplicated layer, and this time choose Rasterize Layer. Then go to Filter>Pixelate>Mosaic, set the Cell Size to 15.
3. Then go to Filter>Sharpen>Sharpen, and repeat this step a few times by pressing Ctrl+F.
That's it you're done! This is what I came up with.
