Jack Dorsey’s Block Shifts Focus To Bitcoin Mining and Self-Custody Wallet, Abandons “Web5”
Jack Dorsey’s payment firm Block (SQ) announced a shift in focus, prioritizing the development of equipment for Bitcoin (BTC) miners and its self-custody crypto wallet, on 7 November 2024.
On the other hand, the company is distancing from its creation of a new decentralized internet dubbed “Web5” while reducing investments in the music streaming app Tidal.
The decision comes amidst a changing political landscape in the US with the recent victory of Donald Trump.
Trump has particularly shown support for the Bitcoin mining industry.
EXPLORE:
Block To Reduce Headcount By 10%
The restructuring initiative aligns with Block’s earlier announcement of a planned reduction in headcount by up to 10% by the end of 2024. The company attributed this decision to the rapid growth of its organization outpacing revenue growth.
“We are scaling back our investment in TIDAL and winding down TBD [the business developing Web5]. This gives us room to invest in our bitcoin mining initiative, which has strong product market fit and a healthy pipeline of demand, and Bitkey, our self-custody wallet for bitcoin.”
Nevertheless, Block’s third-quarter financial results fell short of Wall Street analysts’ expectations, with reported revenue of $5.98 billion missing the consensus estimate of $6.24 billion.
The stock price of the company experienced a notable decline of up to 10% following the announcement.
Block Q3 Results
Total Gross Profit +19% Cash App Gross Profit +21% Square Gross Profit +16% Adj. Operating Income +393%
Stock is down 8% after hours
— FinChat (@finchat_io)
While Block does not engage in Bitcoin mining directly, it supplies equipment to mining firms. Notably, the company has been actively involved in developing its own mining computer, including the completion of a 3-nanometer mining chip earlier this year.
Core Scientific, one of the prominent Bitcoin miners, has already committed to utilizing Block’s mining rigs for its operations.
In parallel to its mining efforts, Block is intensifying its focus on Bitkey, its self-custody wallet designed to facilitate secure Bitcoin transactions.
The wallet, which began shipping in March, integrates with Block’s Cash App and popular crypto exchange Coinbase (COIN) to streamline the buying and selling of BTC for users.
EXPLORE:
Bitcoin Miners Hit Highest Bitcoin Production Post-Halving
As reported, Bitcoin mining giants Marathon Digital and Riot Platforms monthly Bitcoin production figures since the April halving, marking a significant recovery for the sector.
In October 2024, Marathon produced 717 Bitcoin, valued at approximately $48.8 million. CEO Fred Thiel said that the surge was partly due to a more robust hashrate, which increased over 14% to exceed 40 exahashes per second.
Higher transaction fees during the month also contributed to Marathon’s strong output, which accounted for around 5% of total Bitcoin production.
Likewise, Riot Platforms reported a solid month, mining 505 Bitcoin valued at about $34.4 million in October, representing a 22.6% increase from the previous month.
