- Block announces shutdown of TBD’s Web5 and tbDEX projects to focus on Bitcoin mining and self-custody wallet initiatives
- TBD’s Web5 platform for digital identity and tbDEX payment system failed to gain significant adoption
- Block plans to supply Core Scientific with 15 exahashes/second of mining power through custom chips
- Core Scientific has not yet substantially deployed Block’s mining chips, primarily using Bitmain hardware
- Block’s Corporate and Other segment, which includes these projects, generated $44 million in Q3, mainly from TIDAL subscriptions
Block Discontinues Web5 Projects to Double Down on Bitcoin Mining
Block, the company behind Cash App, has announced in its Q3 2024 Shareholder Letter the discontinuation of its TBD division’s initiatives to concentrate on Bitcoin mining and self-custody wallet development.
The terminated projects include Web5, which aimed to create a new identity and trust framework for the internet, and tbDEX, a project focused on revolutionizing global payments and commerce. Neither project achieved significant market penetration or integration before their closure.
Strategic Shift Toward Bitcoin Mining
Block’s strategic pivot includes a substantial investment in Bitcoin mining technology. The company recently completed development of its proprietary mining chip, which it plans to supply to Core Scientific, a major player in the Bitcoin mining industry.
The planned partnership aims to provide approximately 15 exahashes/second of hashing power to Core Scientific, representing roughly 70% of the mining company’s current capacity of 21.8 exahashes/second, as reported in their latest operational update.
However, the implementation faces challenges. Core Scientific has disclosed that their current mining operations rely almost exclusively on Bitmain-manufactured equipment, with Block’s chips yet to be deployed at scale.
Focus on BitKey Development
Another key focus area for Block is BitKey, a multi-signature Bitcoin wallet launched in late 2023. The platform combines hardware wallet security with cloud recovery options, representing Block’s commitment to Bitcoin custody solutions.
Financial Performance
These initiatives currently fall under Block’s "Corporate and Other" segment, which generated approximately $44 million in revenue during the last quarter. The majority of this revenue stems from TIDAL music streaming subscriptions rather than cryptocurrency-related services.
The restructuring reflects Block’s strategic realignment toward core Bitcoin infrastructure and services, moving away from experimental Web5 technologies that failed to gain market traction. This decision marks a significant shift in Block’s cryptocurrency strategy, emphasizing practical Bitcoin applications over theoretical blockchain innovations.
The company’s focus on mining chip development and self-custody solutions indicates a clear direction toward strengthening Bitcoin’s fundamental infrastructure while maintaining user accessibility through products like BitKey.
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