Block (former Square), led by Jack Dorsey, is ramping up investments to expand its reach in small business services and bitcoin mining tools.
Jack Dorsey’s company, Block (SQ), is shifting focus toward creating equipment for Bitcoin miners and developing its self-custody crypto wallet Bitty. This strategic pivot involves scaling back on previously funded projects, including the planned “Web5” decentralised internet initiative developed by its TBD department, and reducing investments in the Tidal music streaming platform.
The plans to wind down the TBD project and scale back investment in Tidal were unveiled in the company’s Q3 2024 Shareholder Letter.
Block introduced “TBD” in 2022 as a new division focused on developing Web5, an innovative concept intended to go beyond both Web2 and Web3 by prioritising decentralised identity and data ownership without the use of blockchain tokens. This approach differs from Web3, which relies heavily on blockchain and tokens, often tied to venture capital interests. Web5 aimed to facilitate a more privacy-centered, open-source web that grants individuals total control of their digital identities and interactions. In 2023, TBD launched a new venture named c= (c equals) to improve the Bitcoin Lightning Network through routing services and liquidity tools.
Tidal is a music and entertainment platform that Block bought in 2021 for nearly $300 million. Apparently, the two initiatives mentioned above didn’t meet the company’s expectations, unlike Cash App, a crypto-friendly mobile payment service which showed significant growth in Borrow volumes.
Despite some changes, Block CEO Jack Dorsey reaffirmed the company’s dedication to enhancing bitcoin infrastructure and making crypto more accessible to the general public. In particular, Block focuses on crypto mining equipment such as mining chips and rigs.
Block’s self-custody wallet, Bitkey, with a unique 2-of-3 multi-signature design, began shipping this March. It offers standard wallet features and integrates with Block’s Cash App and the Coinbase exchange, allowing users to buy and sell Bitcoin (BTC) seamlessly across platforms.
The company itself also continues to hold a significant bitcoin stake, valued at around US$630 million.
Alongside the shareholder letter, Block released its third-quarter earnings, reporting revenue of $5.98 billion, which fell short of Wall Street’s $6.24 billion estimate. Following the news, the company’s stock dropped by 10%.
