— jack (@jack) March 20, 2019
Dorsey disclosed that the decision was influenced by Square’s development lead, Mike Brock:
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Last week I was considering my hack week project, and asked @brockm: “what is the most impactful thing we could do for the bitcoin community?” His answer was simple: “pay people to make the broader crypto ecosystem better.” This resonated with me immediately, so we’re doing it.
Gift to the Bitcoin Community but Crypto Engineers will be Reporting to Jack Dorsey
In his announcement, Dorsey stated that the crypto engineers and the designer will be reporting directly to him. This raises the question of whose interests the bitcoin developers will be serving – Square’s or the bitcoin community’s? And there are various other concerns that are bound to arise.
For instance, if the commercial interests of Square are threatened by a development in Bitcoin technology will the Square-affiliated developers be given free rein to continue doing their work? Being a wealthy and a high-profile Silicon Valley figure, will Dorsey’s power extend to having an outsized influence in the bitcoin development community via his hirelings?
If so, what steps will be taken to ensure that this does not happen? And will this be harmful to Bitcoin’s anti-centralization stance?
Jack Dorsey Promises Crypto’s Philosophy and Goals Will be Safeguarded
In his tweet announcing the move, Dorsey was aware of the issues that are bound to be raised.
Consequently, he stated that Square’s commercial interests would not compromise the core philosophy and goals of cryptocurrency:
These folks will focus entirely on what’s best for the crypto community and individual economic empowerment, not on Square’s commercial interests. All resulting work will be open and free.
Do we Take his Word for it?
Across Silicon Valley, the CEO of Square and Twitter has been one of the most fervent bitcoin believer and advocate. During last year’s Consensus event, Dorsey said he was rooting for bitcoin to be adopted as the internet’s native currency:
The internet deserves a native currency; it will have a native currency. I don’t know if it will be Bitcoin or not. Hope it will be. I am a huge fan.
Dorsey has also previously said that he wants to be actively involved in driving cryptocurrencies to the mainstream. This was one of the reasons he launched the trading of bitcoin on Square’s Cash App last year in January.
Square’s Revenues and Profits From Bitcoin Growing
While this has been a positive for the cryptocurrency ecosystem it has also been good for Square. Last year revenues and profits in this segment grew consistently. In the first half of 2018 revenues were $71 million while profits came in at $0.6 million. During the second half, bitcoin revenues rose to $95 million while profits increased to $1.047 million.
The Square CEO has also made personal investments in bitcoin as well as in bitcoin startups. Last year he participated in Lightning Labs’ seed funding round which raised $2.5 million. And recently, Dorsey revealed that he has been maxing out the $10,000 weekly limit of bitcoin purchases on Cash App.
While this is not proof of the independence and free rein that the crypto engineers he is hiring will have, it certainly has left no doubt that Jack Dorsey has skin in the game. And that might be a good thing for Bitcoin.
About The Author
After words, numbers are my other love… mostly when they are going up and they have nothing to do with taxes or expenses. That makes green my favorite color!