Block (formerly Square) is unique because it owns two massive, distinct ecosystems: Square (Merchants) and Cash App (Consumers).
The "Holy Grail" is connecting them: creating a closed-loop economy where Cash App users spend money at Square Merchants, bypassing the Visa/Mastercard rails (and their fees). Under Jack Dorsey's renewed focus, the company is integrating these silos and cutting bloat (Rule of 40).
Product Deep Dive: Two/Three Pillars
1. Square (The Seller Ecosystem)
- The Product: White dongles, iPad POS, Restaurants software.
- The Moat: Vertical software (Square for Restaurants, Square for Appointments). It's not just payments; it's the operating system for the coffee shop.
- Banking: Square Loans and Checking accounts embed them deeply into the merchant's P&L.
2. Cash App (The Consumer Ecosystem)
- The Product: P2P payments, Bitcoin trading, Cash Card.
- The Growth: Cash App Borrow (short-term loans) is a massive revenue driver.
- Direct Deposit: Trying to become the "Primary Bank Account" for Gen Z/Millennials.
3. Proto (Bitcoin)
- The Vision: Building hardware wallets (Bitkey) and mining rigs.
- The Bet: Betting the company on the future of decentralized finance.
The Business Model
- Subscription & Services: Software fees (SaaS) + Instant Transfer fees.
- Transaction: Taking a ~2.6% cut of swipes.
- Bitcoin: Low margin revenue, but drives engagement.
Risks
- Identity Crisis: Is it a payments company or a Bitcoin crusader? Investors often get confused by the "Tidal / Bitkey" side projects.
- Clover/Toast: Intense competition in the SMB restaurant space.
- Regulation: CFPB scrutiny on "Cash App Borrow" and P2P scams.
Conclusion
Block is a "Turnaround Play." The assets (Cash App/Square) are incredibly valuable. If management focuses on connecting them and controlling costs, the stock is cheap.