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Jack Dorsey’s Block will close Web5 division to invest in Bitcoin
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Jack Dorsey’s payments company Block (formerly Square) plans a renewed focus on building equipment for Bitcoin (BTC) miners. In return, the company gave up on creating a new “decentralized internet” and will migrate resources to Bitcoin.
This venture by Block was called “Web5”, but Dorsey stated that the company will abandon the segment. In addition, the founder of X (formerly Twitter) will also cut investments in the music streaming app Tidal.
The decision was revealed in the same week that Donald Trump won the US presidential election, promising a much friendlier environment for cryptocurrencies. In fact, Trump stated that he intends to encourage Bitcoin mining, which made several companies in the sector support the Republican candidate.
According to its letter to Block shareholders, the change is already underway and is part of the company’s optimization. By reducing costs in other segments, the company hopes to shift its focus to Bitcoin.
Reallocation of funds
“We are reducing our investment in TIDAL and closing TBD (the business that develops Web5). This gives us room to invest in our Bitcoin mining initiative, which has strong product-market fit and a healthy demand pipeline. We will also invest in Bitkey, our self-custody wallet for Bitcoin,” the company clarified.
The restructuring doesn’t come as a complete surprise, as Block said earlier this year that it plans to cut headcount by up to 10% by the end of 2024.
Along with the letter to shareholders, Block released its third quarter financial results. The company’s revenue was $5.98 billion, below Wall Street analysts’ average estimate. According to data from FactSet, the market expected revenue of US$6.24 billion, and the difference caused shares to fall 10% after the trading session.
Block does not mine BTC, but sells equipment to companies that do. With the move, the company aims to create initiatives to build its own mining computer.
The payments company said in April that it has completed development of a 3-nanometer mining chip, which it had been working on since April 2023. In July, one of the largest bitcoin miners, Core Scientific (CORZ), said it will use the Block mining rigs for your operations.
In the case of Bitkey, the company started shipping the first units in March. At the time, the company said that Bitkey will not only provide standard wallet functionality, but will also connect to Block’s payments platform Cash App and cryptocurrency exchange Coinbase (COIN). This integration aims to facilitate the purchase and sale of BTC.
Jack Dorsey’s Block will close Web5 division to invest in Bitcoin
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Jack Dorsey’s Block will close Web5 division to invest in Bitcoin
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Jack Dorsey’s Block will close Web5 division to invest in Bitcoin
