This was in Block's Q1 Shareholder letter.

We get this question a lot. We’ll use this quarter’s letter to answer it.

First, some facts. Less than 3% of company resources are dedicated to bitcoin-related projects. All of which have been more than fully covered by the profits from our bitcoin exchange, which is Cash App’s fourth largest gross profit stream.

But why spend time on bitcoin at all? We believe the world needs an open protocol for money, one that’s not owned or controlled by any single entity. We believe bitcoin is the best and only candidate to be that protocol, and to ultimately become the native currency of the internet.

How does this benefit Block? An open protocol for money helps us serve more people around the world faster. We could build an amazing product experience once and ship it globally to any market in the world, without needing to customize for hundreds of different payment schemes. This creates the opportunity to accelerate our growth potential and improve our cost structure at the same time. It truly levels the playing field for a company like ours, and for everyone in the world.

Why bitcoin versus all the other “cryptos?” Satoshi designed bitcoin to solve a very specific problem around payments, which the world has since found to be immensely valuable. The majority of other projects are either solving different problems or attempting to be a speculative trading asset. We benefit from an open protocol for money, and that’s what we’re focused on building upon.

In 2018, Block became the first publicly listed company to offer a bitcoin product. Our strategy since then follows 3 core directives:

To make bitcoin more accessible, we started with the greatest need: “how do I get bitcoin?” We built a simple platform right into Cash App where one can buy, hold, withdraw, or sell bitcoin. It was a hit. Since launch, Cash App has had over 21 million actives use bitcoin. Cash App bitcoin products generated 3.3% and 4.2% of Block’s gross profit in 2022 and 2023, with only 0.7% of related expenses.

We went on to build ecosystem features to help people get bitcoin. 1.6 million Cash App Card actives have used our Bitcoin Round Ups feature to automatically convert spare change from everyday transactions into bitcoin. Our Paid in Bitcoin feature allows customers to convert a percentage of their direct deposits into bitcoin with zero fees or price spreads, yet another reason for people to direct their paychecks into Cash App. We just launched a similar feature named “Bitcoin Conversions” for Square sellers wishing to convert up to 10% of their daily sales into bitcoin.

We’re doing a few things to make bitcoin more secure. First, we recognize that holding bitcoin safely can make people feel anxious, especially if one doesn’t want to keep their bitcoin on an exchange. That’s why we built and launched Bitkey to over 90 countries: a globally available, non-custodial wallet that combines intuitive software, robust hardware, and advanced security measures. Bitkey makes bitcoin easy to use and hard to lose. It comes integrated with Cash App and Coinbase, allowing customers to easily buy and transfer bitcoin directly to their Bitkey.

We also want to help secure the bitcoin network by building bitcoin mining hardware. We’re introducing an entirely new 3 nanometer ASIC mining chip, in addition to an entire mining rig system. Why? We’ve heard from countless miners globally about their desire for reliable, flexible, and US-based mining hardware and software. This contributes to the health and security of the bitcoin network by further decentralizing both the supply of mining hardware and the distribution of hashrate, the computing power devoted to mining bitcoin.

With a standalone mining chip, we will represent the only large, well-capitalized mining hardware vendor with such a solution. We believe this will help unlock mining system innovation and support the much-needed development of new mining system form factors and use cases. With the full mining rig system, we’ll build on our product and software development expertise, system engineering competency, supply chain experience, and aftermarket support capability (with tens of millions of devices shipped) to build something miners can depend on. This is a massive market and opportunity we’re very excited about.

And finally, we want to make bitcoin more usable everyday. Our greatest contribution thus far to this goal has been investing in the Spiral team, a group of open-source developers who work every day to make bitcoin more than an investment. Spiral has been directly behind the Lightning Development Kit, the Bitcoin Development Kit, the Bitcoin Design Community, and has provided grants to over 50 developers in more than 20 countries, leading to a dozen foundational open source bitcoin projects. The team has also been the inspiration for our Bitkey and mining hardware projects and has helped us think deeply about how finance technology shifts over time.

Global remittance, an $860 billion industry, is a use case that’s more urgently in need of better solutions today than everyday payments. This is why we created TBD, to solve cross-border funds flow without the need for going through a centralized exchange. TBD has created a protocol for on- and off-ramps from fiat to digital currencies that would allow anyone without a bank (~1.4 billion people) and with access to a mobile phone to participate in the larger global economy. We’ll discuss TBD in a future shareholder letter as we launch our first remittance product later this year.

Ultimately, making bitcoin more usable every day means seeing bitcoin as a medium of exchange for the internet, thus solving for the original problem Satoshi stated in the bitcoin white paper:

"Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments.

…What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party."

The internet will have a native currency; it’s just a matter of time. Artificial Intelligence systems and agents will have to transact, and the most efficient way to do so will be a common protocol for money movement. Creative endeavors will rely heavily on micropayments, something that’s been discussed since the dawn of the internet, and finally being realized at scale with things like “zaps” (transferring small amounts of bitcoin via lightning) on the NOSTR protocol. Commerce will be less constrained by national borders, flowing freely around the world without gatekeepers or rent seekers.

This won’t happen overnight. The existing and emerging financial systems will operate in parallel for some time. There’s an opportunity to build cohesive and regulatory-compliant connections between these two worlds. This is where we’ve always flourished: at the intersection of regulations and innovative technology that can bring more people into the economy.

Recognizing the interconnectedness of the bitcoin ecosystem, we understand that our advancements foster collective growth, and the progress of others, in turn, benefits us. This synergy is pivotal; as the bitcoin ecosystem flourishes, so does Block. We were the first to recognize this potential and have reaped the benefits, but as others join, the advantages compound. The rising tide of bitcoin's growth lifts all boats, and our proactive contributions have positioned us at the forefront of this wave.

We also believe in investing in the overall asset of the ecosystem, and holding bitcoin in our treasury. Going forward, each month we will be investing 10% of our gross profit from bitcoin products into bitcoin purchases. We were one of the first public companies to put bitcoin on our balance sheet: we invested $220 million into bitcoin, and that investment has grown by approximately 160% to $573 million as of the end of the first quarter. We’re open sourcing our treasury blueprint so other companies can do the same: https://block.xyz/documents/bitcoin-blueprint.pdf

Historically and moving forward, our investment in bitcoin transcends technology; it is an investment in a future where economic empowerment is the norm. This commitment drives our business into new territories, unlocking novel opportunities for our customers, and securing enduring value for you, our shareholders.