Jack Dorsey’s sudden exit from Twitter underlines the tech pioneer’s growing fixation with crypto — a passion that has forced a sudden resolution of the odd situation of a single individual leading two large tech companies.
It’s now clear that Square is Dorsey’s favorite child and needs all of his attention to advance the role it could play in popularizing bitcoin, the best-known cryptocurrency.
"If I were not at Square or Twitter I'd be working on bitcoin," Dorsey said at a cryptocurrency conference in Miami in June. At the time, he said “both companies have a role to play.”
But Twitter’s presence in the crypto world has proven minimal, despite efforts like letting users accept tips in bitcoin and hiring Tess Rinearson to lead a crypto team. Twitter’s CFO recently dissed the idea of holding bitcoin in its corporate treasury.
Square, meanwhile, has been riding the crypto wave since its Cash App added bitcoin trading almost four years ago. By 2021, 1 million Square users were buying bitcoin for the first time on Cash App. Square announced in February that 5% of Square’s total cash was in bitcoin.
In June, Blockstream, the bitcoin mining company, announced that Square was investing $5 million in a solar-powered mining operation. In July, Dorsey said Square was building “a new business” that would operate alongside divisions like Cash App and Tidal to build tools for developers, focused on bitcoin.
Square also helped set up the Cryptocurrency Open Patent Alliance, which aims to defend the industry against patent trolls.
Recently, Square also announced that it was developing its own hardware crypto wallet “to make bitcoin custody more mainstream.”
“Bitcoin is for everyone,” Dorsey said in a tweet. “It’s important to us to build an inclusive product.”
Despite those moves, Square remains a relative newbie in crypto. Bitcoin trading has juiced its revenue lately, but it’s going up against nimbler, faster-moving competitors like Coinbase and Robinhood.
“Jack wants all in on crypto,” Constellation Research analyst Ray Wang told Protocol. “He doesn’t want to miss the next big thing.”
One challenge for Dorsey and Square is his well-known allegiance to bitcoin, which is increasingly just one cryptocurrency among many, and not the most technically sophisticated one. Wang says Square needs “to be in the middle of smart contracts,” a technology most firmly established on the Ethereum blockchain. A coming upgrade to bitcoin called Taproot promises to facilitate smart contracts using bitcoin, but it would seem smarter to spread one’s bets.
There’s still time for Square to expand its crypto footprint, though, which makes the timing of Dorsey’s move significant. “It’s early in the marketplace,” Wang said. “This space will be won by a few players. We are in 1997 for the internet.”
