Jack Dorsey Is Bitcoin’s Unsung Hero
At the recent Bitcoin conference in Miami (the really bullish one), Twitter’s founder and former CEO said: “if I was not at Square or Twitter, I’d be working on bitcoin”.
He announced his resignation from Twitter this week, and it seems he wants to spend more time on bitcoin. ByteTree welcomes that because Dorsey is an understated bitcoin hero.
After making a fortune building Twitter, he found some spare time to set up the payments company Square (SQ). You often see Square next to the cash register in small businesses, yet that is only a small part of the bigger picture.
In 2018, the company launched a bitcoin trading facility within its Cash App. Today, the Cash App boasts over 40 million monthly active users. We don’t hear much about this in Europe because most of Square’s revenues come from the USA. I gather the Cash App is similar to the Revolut App over here, where you can transfer funds freely while also being able to buy stocks and bitcoin.
Square’s revenues exceed $16 billion this year, which is up tenfold in five years. It’s a beast in the making, without the political headache that must come from running Twitter. It’s easy to see why Dorsey has jumped ship.
The best bit is that Dorsey is bitcoin’s unsung hero and here’s why: Square’s Cash App has raised $13 billion for the bitcoin network. That is huge.
Grayscale’s Bitcoin Trust (GBTC) may be worth an impressive $32 billion. Yet since 2013, the fund has raised approximately $8.9 billion from investors, with most of it in 2020. Grayscale has since stopped raising funds in GBTC, while Square has carried on and is now the number one public source of demand outside of the funds and exchanges.
When measured in BTC, a typical quarter sees demand from Square’s customers of around $1.5 billion, which has recently acquired 40,000 BTC or more. If anyone is confused about where all the demand for bitcoin is coming from, above and beyond the funds and ETFs, it’s here.
In total, I estimate Square has purchased 625,514 BTC on behalf of customers, which is 5x as much as MicroStrategy (MSTR). Customers would have subsequently sold many bitcoins, but it’s still a huge contribution to the network.
While the Cash App kept on buying bitcoin from 2018, the company formed Square Crypto the following year. This is an independent team solely focused on contributing to bitcoin open-source work for the benefit of all. It also launched the Cryptocurrency Open Patent Alliance (COPA), a non-profit organisation encouraging crypto innovation and opening access to patented crypto inventions.
More recently, Dorsey has hinted at a move into bitcoin mining and the development of a hardware wallet to make bitcoin custody more mainstream. He has also discussed a protocol for a decentralised bitcoin exchange. The key point here is the seamless conversion of fiat into bitcoin without having to go through multiple platforms. It is applications like this that grow the network, and therefore create lasting value.
LEAVING TWITTER, BOOSTING SQUARE
You can see why he’s moved to Square from Twitter. Politics, censorship, activists… Who needs it? Twitter has done its bit for bitcoin in implementing a layer 2 payment channel with the integration of Strike. While being a positive development, that won’t change the world.
Yet Twitter will remain the most essential platform for the bitcoin conversation, which is important. I just hope the censors allow it to continue to flourish.
There is so much more that Dorsey can accomplish at Square, which is a fintech business at heart. He can build the gateways that will grow the network. The end game is that everyone is using the Bitcoin Network in their daily lives without even noticing.
Dorsey has contributed more to the Bitcoin Network than perhaps any other living individual. His app has proved to be a powerful and reliable source of demand, which has supported bitcoin’s progress. A full-time Dorsey at Square can only be bullish. Take a bow for the great man, and please, someone lend him a razor.
This article was written by Charlie Morris, Co-Founder and Chief Investment Officer at ByteTree. The article has been cross-posted from our website, originally published on 1st December 2021.
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