Following in the footsteps of Meta Platforms (the company formerly known as Facebook), Square recently changed its name to Block (SQ -0.96%) to shine light on the company's new strategic focus. 

Not only does the name of this booming fintech business implicitly reference blockchain technology, which is the foundation for cryptocurrencies, but company founder and Chief Executive Officer Jack Dorsey hasn't been shy about voicing his support for Bitcoin (BTC 0.63%) in particular. He thinks it can be the native currency of the internet. 

Let's dive into what exactly the world's most valuable cryptocurrency means for Block. 

Barista holding tablet that says "bitcoin accepted here" at coffee shop.

Image source: Getty Images.

Block and Bitcoin today 

Bitcoin is already a major part of Block's business. Not only did the company purchase $50 million worth of Bitcoin in the fourth quarter of 2020 and another $170 million in the first quarter of last year, but Block also offers individuals ways to interact with the cryptocurrency. 

With Cash App, which is Block's personal finance tool, users can buy, sell, send, and receive Bitcoin. During the most recent quarter, Block generated $42 million in gross profit from Bitcoin trading. This figure has soared from just $2 million two years ago, and it seems likely to head higher in the future as Bitcoin becomes more mainstream. For comparison's sake, Block's total gross profit for the most recent quarter was $1.1 billion. 

Competitors PayPal and Robinhood Markets allow customers to trade not just Bitcoin, but also Bitcoin CashEthereum, and Litecoin. Block could've added these cryptocurrencies to Cash App by now but it hasn't, simply because the sole focus is on Bitcoin. 

Block's importance in the financial lives of its users likely will increase over time as customers adopt more of its expanding menu of products and services. Letting Cash App customers buy things with Bitcoin, and allowing sellers to accept Bitcoin as payment, are two features that probably will be introduced in the near future. 

Building the infrastructure for Bitcoin to prosper 

Two lesser-known segments of Block that demonstrate Dorsey's ultimate vision for Bitcoin and his business are TBD and Spiral. TBD was launched in the second quarter of 2021 and is an open developer platform built to make it easy to create decentralized finance (DeFi) applications. These usually are built on top of a programmable blockchain that enables smart contracts such as Ethereum. TBD's aim is to build DeFi apps, such as a decentralized exchange, for Bitcoin.

The Spiral initiative, originally called Square Crypto, was launched in 2019 with the stated goal to "improve the Bitcoin ecosystem by contributing to free and open-source projects." Projects like the Lightning Development Kit and the Bitcoin Development Kit are trying to improve Bitcoin's user experience, which can be intimidating and a serious roadblock to mass adoption. 

Dorsey has said he believes that Bitcoin has the potential to change the world, and he views the cryptocurrency as the most important thing to work on during his lifetime. The development of new ventures like TBD and Spiral, as well as increased Bitcoin functionality for Block's customer base of merchants and individuals, will help lay the foundation for greater innovation in the years ahead. This potential for major breakthroughs is what makes the stock attractive for long-term investors. 

It's probably not a stretch to say that Bitcoin is quite literally the future of Block. For shareholders in this thriving fintech business, accepting this fact is critical to understanding the stock and where it's headed.