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Block stack reported a 37% drop in profit in 2019

Block stack reported a 37% drop in profit in 2019

The Blockstack company reported that in 2019, its profit decreased by 37% compared to 2018 and amounted to $23.3 million.

According to a report prepared for the us securities and exchange Commission (SEC), the company’s profit in 2018 was $36.7 million, and in 2019 – only $23.3 million. The report also reports that Blockstack sold about 75 million STX worth $15.4 million in closed token sales last year, as well as 31 million STX worth $7.6 million. In total, Blockstack sold about 395 million STX worth $47.4 million in 2017 and 2018 during closed sales.

The co-founder and CEO of Blockstack, Muneeb Ali, said that the main profit of the company comes from token sales, so he explains these indicators precisely by the decrease in STX sales in 2019. However, in the future, the company does not expect to make a large profit from token sales. In addition, Blockstack considers the funds raised during the ICO as profit and pays taxes on them.

In addition to declining sales, the company’s costs increased last year. Compared to 2018, in 2019, Blockstack’s compensation expenses increased by 133% to $9.6 million, and General and administrative expenses increased by 48% to $5.8 million. Speaking about the company’s reserves, Ali said that STX 293 million is in short – term storage, and STX 110 million is in long-term storage. At the same time, the number of verified Blockstack users reached 1 million, the staff increased to 32 people, and the company opened an office in Amsterdam.

To date, STX tokens are regulated by the SEC and are classified as securities, but Blockstack believes that this will not always be the case. In the second or third quarter of 2020, the company plans to release an updated version of the Stacks 2.0 blockchain. the Company believes that the improved Blockstack network will become sufficiently decentralized that STX will no longer be considered securities according to the Howie test.

Recall that this month Blockstack patented a single sign-on mechanism for all dApp systems-Blockstack Auth, and also launched testing of the Proof-of-Transfer consensus based on transactions in the Bitcoin blockchain.