Block, formerly known as Square, is doubling down on Bitcoin despite the market turmoil. The company’s CEO thinks it has grown beyond a payments company and can rightfully be described as an ecosystem on its own.
Block recently concluded its first investor day in nearly 5-years with all company’s executives and investors in attendance. Amid the talk of numbers and metrics, company CEO Jack Dorsey claimed that “it’s difficult to fit a company like Block into a single category.”
“We’re no longer just a payments company,” said Dorsey. “A lot has changed since our last investor day.” His presentation included the fact that the company was now dabbling in several niches and could rightfully bear the title of an “ecosystem.”
“Calling Block a payments company is like calling Amazon a bookseller,” said Amrita Ahuja, the company’s Chief Financial Officer. “We’ve grown in so many different ways across multiple dimensions.”
Early in the year, Block bought Afterpay, an Australian fintech firm as a show of intent to test the waters in the loan market. Block’s CFO rationalized the decision by claiming that millennials and the GenZ demographic are “skeptical of traditional forms of credit that leave people in debt spirals.”
Heads were turned in the space when Block purchased Jay-Z’s music streaming platform, Tidal, for nearly $300 million in 2021. According to Dorsey, the purchase was a gamble on the creator economy which will pay off as artificial intelligence improves.
The renaming of the company from Square to Block was an indication that it intended to explore blockchain technology. The company allowed customers to trade Bitcoin through CashApp and even went as far as holding the cryptocurrency on its balance sheets.
It took things up a notch by experimenting with a Bitcoin hardware wallet and proposed a mining business to improve accessibility for the Bitcoin mining business.
“Mining needs to be more distributed. The more decentralized this is, the more resilient the bitcoin network becomes,” said Dorsey. Dorsey has strongly backed Bitcoin over other cryptocurrencies and stated that the Bitcoin whitepaper is “one of the most seminal works of computer science in the last 20 or 30 years.”
The Bitcoin gamble appears to have paid off as an earnings report for the last quarter of 2021 showed that the Cash App generated $1.282 billion in revenue which was an increase of 115% from the previous year. The company has not shown any signs of integrating other cryptocurrencies on the platform with a decentralized bitcoin exchange in the works.
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