Jack Dorsey, the CEO of both Twitter (NYSE:TWTR) and Square, Inc. (NYSE:SQ), and a self-made billionaire in his own right, has taken to the crypto endorsement trail of late, spreading the news that Bitcoin may soon become the currency of the Internet, as its Lightning Network enhancements revive its acceptance as a global payment medium of exchange. In a recent interview with Forbes and forays into Twitter and related podcasts, Dorsey has spoken, and others are listening to what he has to say, suggesting that his moves in the payment space could have more impact than a crypto ETF or Bakkt futures exchange.
While speaking with Joe Rogan of Forbes, Dorsey shared his belief that the Internet will at some point have its own cryptocurrency:
I believe the Internet will have a native currency, and I don’t know if it’s Bitcoin. I think it will be [Bitcoin] given all the tests it has been through and the principles behind it, how it was created. It was something that was born on the Internet, was developed on the Internet, was tested on the Internet, [and] it is of the Internet.
Dorsey went on to add:
We’d love to see something become global currency. It enables more access, it allows us to serve more people and allows us to move faster around the world.
These last few words were actually a hint of what was to come over the next few days. Dorsey has let it be known on Twitter and in a podcast with Stephan Livera, a self-professed Bitcoin bull, that he was taking his Bitcoin crusade one major step forward by integrating its new Lightning Network capabilities with Square and its CashApp. Square is a mobile payment processor and owns CashApp, a peer-to-peer mobile payment enabler that is the second most popular app on Apple (NASDAQ:AAPL). CashApp has over 7 million active users, who can also easily purchase Bitcoin with the service.
If we step back a moment, the industry fervor for Bitcoin and other altcoins to replace existing payment vehicles at the point of sale has waned, as Crypto Winter decimated token valuations. When Bitcoin was appreciating prior to 2018, merchants were happy to receive Bitcoins and become instant “hodlers”, but when values plummeted, so did the interest in payment acceptance. Dorsey wants to revive enthusiasm once again in the payment utility of cryptocurrencies:
We don’t think it stops at buying and selling [bitcoin]. We do want to help make happen the currency aspect.
Another shortcoming of cryptos at the point of sale was the lack of speed. Updating the blockchain takes time and energy and is far less efficient than major payment vehicles like Visa (NYSE:V) or MasterCard (NYSE:MA). The Lightning Network project, however, is Bitcoin’s answer to these speed issues. Dorsey has invested in the effort and disclosed that his team is far down the path of integrating these enhancements with Square and its CashApp.
Per Dorsey:
We’ve been exploring with Elizabeth and the Lightning team… Broadly, we have this massive seller network of small, medium, and large businesses… and we would love to make it as fast and efficient and transactional as possible, and that includes looking at our seller base and our register… You know, it’s not ‘if’, it’s more of a ‘when’… How do we make sure that we are getting the speed that we need and the efficiency?… From a merchant perspective, and that’s something we really need to get right.
And is Twitter next? Per Dorsey again:
I think there’s a lot there… It’s really compelling and something we want to spend a lot more time on… We finally have these technologies, more broadly at the blockchain level, that I think can help us address some of the challenges we are facing with Twitter, including trust and identity, certainly providing more economic incentive rather than what Twitter provides today, which is reach. So, it is a pretty active conversation within the company and around the company.
How big of an impact could Dorsey’s actions have? Comments on Twitter were swift: “Whatever form the integration takes, it will likely have a larger impact on the Bitcoin ecosystem than both Bakkt and a crypto ETF.” Crypto enthusiasts have always believed that these latter two projects would open the floodgates for institutional participation in the crypto investment arena.
Jeremy Welch, the chief executive of Bitcoin hardware and software provider Casa, thought the impact would be “huge” and explained:
Silicon Valley hasn’t had the best view on Bitcoin overall. So, it would be significant on multiple levels, both in terms of adoption and their reputation and they have cachet with a lot of the bigger financial institutions.