Jack Dorsey’s Block plans to launch an open-source Bitcoin mining chip called Proto in 2025, aiming to disrupt the $3-6 billion mining market dominated by key players. CEO Dorsey confirmed that development is on track, emphasizing the all-American production model to mitigate trade issues. Despite facing setbacks in revenue and Bitcoin losses, Block aims to foster innovation through Proto and improve profitability in upcoming quarters.
In a bold move into the Bitcoin market, Jack Dorsey’s Block—formerly Square—has announced plans to release an open-source mining chip named Proto, set to launch in 2025. This initiative aims to shake up the Bitcoin mining hardware industry, currently dominated by major players like Bitmain, MicroBT, and Canaan, which has a valuation ranging between $3 to $6 billion.
During the Q1 2025 earnings call, CEO Dorsey confirmed that development is proceeding smoothly and said they don’t anticipate any delays. A notable advantage is that the chip is being produced entirely within the United States. This localised production means Block’s operations won’t be as vulnerable to global trade disputes or the tariffs currently affecting international trade.
Dorsey stated, “We have very close relationships with our vendors and manufacturers, and we are building in the United States.” This homegrown approach is designed to ensure a more stable supply chain, shielding the company from external volatility in the market.
But Proto isn’t solely a technical project; it embodies a broader open-source philosophy. Dorsey highlighted that the open-source nature of the chip will enable developers and miners to access its design, give feedback, and even enhance its functionality. He remarked, “This is a completely open-source initiative… allowing us to get a lot of feedback from the community.”
Block’s aim is to foster a fresh developer ecosystem around Bitcoin mining, which historically hasn’t been done at this scale. The company believes that such an approach will spur innovation and decentralisation in the mining sector, benefiting users by facilitating new platforms and experiments.
This effort comes at a time when Block is keen to diversify its revenue streams following an underwhelming Q1 performance. The firm reported a gross profit of $2.29 billion, reflecting a modest increase of 9% year-on-year, with the bulk of profit driven by Cash App ($1.38 billion, a 10% rise) and Square ($898 million, up 9%). Nevertheless, these figures lagged behind what analysts were forecasting.
Block’s adjusted EBITDA stood at $813 million, yet the anticipated growth from Cash App and earnings per share fell short of expectations, leading to a significant drop in the company’s stock price, plummeting by over 21%. Adding to the challenge, Block revised its 2025 gross profit growth forecast from 15% to 12%, with a tentative Q2 projection of $2.45 billion, which continues to fall below Wall Street’s predictions.
The company attributed its lacklustre forecast to the challenging macroeconomic environment and diminishing consumer spending. “We are operating in a more dynamic macro environment,” the statement read, reflecting a cautious outlook for the remainder of the year.
Block’s finances were hit hard by the recent dip in Bitcoin’s price, leading to a significant unrealized loss of $93.4 million on its Bitcoin holdings. This was a stark contrast to the prior quarter’s $233.4 million gain. Revenue from Bitcoin trading also suffered, declining 15.7% year-on-year to $2.30 billion, marking a notable setback in Block’s crypto-related business operations.
Despite these hurdles, Dorsey remains committed to his vision for Block and its innovative pathway. Proto is positioned as a crucial element of the company’s strategy to navigate through current economic challenges. Block has indicated that additional features will be launched soon in an effort to boost profitability and enhance user retention later in the year.
