Data #1
Core Scientific’s Independant Broadcasts Highlight How Bitcoin Mining is Moving In Favor of Block
Why does this data matter?
Over the past few years, Block has been quietly developing computing chips designed specifically for bitcoin mining. While we initially had little to no expectations for this segment of their business, that might be changing with their recent announcement involving Core Scientific.
For context, Core Scientific is a publicly traded bitcoin mining company. As shown in the image above, Core Scientific highlighted Block as a key player in their technology stack, positioning them at the forefront of this industry.
The announcement suggests Block could provide $200 million to $500 million worth of chips, although no specifics were disclosed. This marks a promising entry into the chip industry, which appears to be benefiting from a broader secular tailwind.
Data #2
Core Scientific Well Capitalized Now, and CoreWeave’s Offer, a Leader in Ai Datacenters, Shows Core Scientifics Asset Strength…
Why does this data matter?
The announcement with Core is significant, but it's also important to consider the potential longevity of Core as a client for Block. As highlighted above, CoreWeave, a data center business focused solely on AI, is reportedly looking to acquire Core Scientific for over $1 billion.
This is crucial because the chips Block is providing likely have broader functionality within the AI ecosystem, particularly for accelerated computing. This suggests that Block’s chips could play a role beyond bitcoin mining, potentially tapping into the growing AI market.
Data #3
2018 is Long Ago Now, but Bitmain, Generated $2.8B in 2018
Why does this data matter?
Lastly, let’s examine the financial health of Block's biggest competitor in this space—Bitmain. The company attempted to go public a few years ago, revealing some of their financials. In 2018, Bitmain generated around $3 billion in revenue with decent margins, and they currently control about 90% of the market.
However, industry feedback suggests that many of Bitmain's customers are dissatisfied with the product. This presents a potential opportunity for Block to enter the market and capture a significant share. It will be exciting to see how this develops.
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