30s Summary

Block, previously known as Square, is shifting focus towards supporting bitcoin miners and enhancing their self-custody crypto wallet, Bitkey. This new strategy involves decreasing their involvement in other projects, such as their proposed decentralized ‘Web5’ platform and Tidal, their music streaming app. This move was motivated by significant growth in demand for their mining equipment and self-custody wallet. The change in focus comes after Donald Trump’s election win and promise to support the growth of crypto industries in the U.S., particularly bitcoin mining.

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Jack Dorsey’s company Block, formerly known as Square, is shifting gears. They’re focusing more on serving bitcoin miners and bolstering their crypto wallet, funded partly by scaling back other projects. These include a new decentralized internet concept called “Web5” and the music streaming app, Tidal.

This decision came in the same week that Donald Trump won the presidential election, making much friendlier promises for the crypto industry in the U.S. Among his pledges was to foster the bitcoin mining industry, which would be a breath of fresh air to an industry struggling to stay profitable after the recent halving that slashed mining rewards by half.

Block stated in their recent shareholders letter that they were pulling back their investments in Tidal and putting a stop to their Web5 project. This would allow them room to invest in their Bitcoin mining initiative. They have a solid product and market fit with plenty of demand, and Bitkey, their self-custody wallet for Bitcoin.

This pivot wasn’t surprising considering the company had indicated plans to cut their workforce by as much as 10% by the end of 2024 earlier this year. Block clarified that the growth of the company had significantly outpaced the growth of their business and revenue.

Block doesn’t directly mine Bitcoin but supplies equipment to those who do. Among their initiatives is the development of their own mining computer. They eventually developed a 3-nanometer mining chip which was quickly adopted by one of the largest Bitcoin miners, Core Scientific.

In addition to supporting Bitcoin miners, Block is also heavily focusing on their self-custody wallet, Bitkey, which started shipping in March. Bitkey not only offers standard wallet functionality, but also connects to Block’s Cash App payment platform and crypto exchange Coinbase, enabling easier buying and selling of BTC.

Block started TBD in June 2022 with hopes to create Web5 as a set of technologies to enhance the web with decentralized identity, personal data storage, and verifiable data exchange capabilities. In contrast, Block purchased Tidal, a music and entertainment platform, in 2021 for nearly $300 million.