Source Code: Your daily look at what matters in tech.

fintechfintechauthorTomio GeronNoneGet access to the Protocol | Fintech newsletter, research, news alerts and events.f6ea366a38
×

Get access to Protocol

Your information will be used in accordance with our Privacy Policy

I’m already a subscriber
Protocol | Fintech

Square’s still a payments company. Will crypto hardware change that?

Plans for a hardware wallet are a step toward CEO Jack Dorsey's ambitions to popularize bitcoin.

Jack Dorsey at Bitcoin Miami

Jack Dorsey said Square might develop crypto wallet hardware. Now the company's plans are confirmed.

Photo: Joe Raedle/Getty Images

Square is leaping into building a crypto hardware wallet, seeking to grab a leading role in the crypto industry.

Jesse Dorogusker, Square's head of hardware, announced it on Twitter this week, saying Square wants to "make bitcoin custody more mainstream."

CEO Jack Dorsey had previously said Square was considering a hardware wallet.

Square is better known for its payments products for merchants and its Cash App, but is moving ever-deeper into the crypto business. Crypto-related business was almost 70% of its revenue in the first quarter.

But that figure is more a quirk of accounting rules than a reflection of where the weight of Square's business lies. Square's Cash App, which lets users buy and sell bitcoin, is known for introducing newbies to cryptocurrency rather than appealing to hardcore crypto users. That's where a hardware wallet comes in.

Hardware wallets provide extra security, since online crypto accounts can be hacked through SIM swaps and social engineering. Hardware wallets, which can be kept offline, enable people to secure their crypto private keys rather than letting crypto exchanges hold them. While a number of companies provide "cold storage" custody services for larger crypto holders in secure, vault-like environments, hardware wallets are used more by individuals with large sums of crypto to secure.

Square's current crypto customers don't seem like the natural target for a hardware wallet. Many of its customers initially use Cash App, its peer-to-peer payments product, and then later try other services such as crypto, the company has said.

But that may be the point. Crypto is top-of-mind for Dorsey. If he wants Square to be known as a leader in crypto, building a hardware wallet for hardcore enthusiasts is one way to do that.

"Whatever I can do, whatever my companies can do to make Bitcoin accessible to everyone is how I'm going to spend the rest of my life. If I were not at Square or Twitter, I'd be working on bitcoin," Dorsey said at a recent conference in Miami.

The question is whether Dorsey's personal ambitions can shift the market's realities.

"My personal point of view is that a hardware wallet solves the wrong set of priority issues for consumers in terms of enabling greater usage of crypto," said Tom Loverro, general partner at IVP, an investor in Coinbase. "I think the more important issues at this point are nailing the consumer usability for utilizing crypto in digitally and crypto native experiences."

Square, which is creating a small team led by Max Guise to build it, apparently wants to make hardware wallets more user-friendly. And hardware is one of Square's specialties, going back to its original payment dongle. Dorogusker, who joined Square nearly a decade ago after eight years at Apple, oversees hardware design.

Square's challenge is to appeal to enthusiasts who want a hardware wallet while making it mainstream.

Dorogusker said Square would seek to offer "assisted-self-custody," which suggests some role for Square's online services, while focusing on mobile use.

Protocol | Fintech

Amazon wants a crypto play. Its history in payments is not encouraging.

It missed chances to be PayPal, Square and Stripe — so is this its chance to miss being Coinbase, too?

Amazon wants to be a crypto player.

Image: NurPhoto/Getty Images

The news that Amazon was hiring a lead for a new digital currency and blockchain initiative sent the price of bitcoin soaring. But there's another way to look at the news that's less bullish on bitcoin and bearish on Amazon: 13 years after Satoshi Nakamoto's whitepaper appeared on the internet, Amazon is just discovering cryptocurrency?

That may be a bit unkind, but the truth is sometimes unkind. And the reality is that Amazon has a long history of stumbles and missed opportunities in payments, which goes back more than two decades to the company's purchase of internet payments startup Accept.com.

Keep Reading Show less
Owen Thomas

Owen Thomas is a senior editor at Protocol overseeing venture capital and financial technology coverage. He was previously business editor at the San Francisco Chronicle and before that editor-in-chief at ReadWrite, a technology news site. You're probably going to remind him that he was managing editor at Valleywag, Gawker Media's Silicon Valley gossip rag. He lives in San Francisco with his husband and Ramona the Love Terrier, whom you should follow on Instagram.

Over the last year, financial institutions have experienced unprecedented demand from their customers for exposure to cryptocurrency, and we've seen an inflow of institutional dollars driving bitcoin and other cryptocurrencies to record prices. Some banks have already launched cryptocurrency programs, but many more are evaluating the market.

That's why we've created the Crypto Maturity Model: an iterative roadmap for cryptocurrency product rollout, enabling financial institutions to evaluate market opportunities while addressing compliance requirements.

Keep Reading Show less
Caitlin Barnett, Chainanalysis
Caitlin’s legal and compliance experience encompasses both cryptocurrency and traditional finance. As Director of Regulation and Compliance at Chainalysis, she helps leading financial institutions strategize and build compliance programs in order to adopt cryptocurrencies and offer new products to their customers. In addition, Caitlin helps facilitate dialogue with regulators and the industry on key policy issues within the cryptocurrency industry.
Protocol | Enterprise

How Google Cloud plans to kill its ‘Killed By Google’ reputation

Under the new Google Enterprise APIs policy, the company is making a promise that its services will remain available and stable far into the future.

Google Cloud CEO Thomas Kurian has promised to make the company more customer-friendly.

Photo: Michael Short/Bloomberg via Getty Images 2019

Google Cloud issued a promise Monday to current and potential customers that it's safe to build a business around its core technologies, another step in its transformation from an engineering playground to a true enterprise tech vendor.

Starting Monday, Google will designate a subset of APIs across the company as Google Enterprise APIs, including APIs from Google Cloud, Google Workspace and Google Maps. APIs selected for this category — which will include "a majority" of Google Cloud APIs according to Kripa Krishnan, vice president at Google Cloud — will be subject to strict guidelines regarding any changes that could affect customer software built around those APIs.

Keep Reading Show less
Tom Krazit

Tom Krazit ( @tomkrazit) is Protocol's enterprise editor, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire, and served as executive editor of Gigaom and Structure.

Amazon job opening points to plan to accept crypto payments

The news sparked a rally in the values of bitcoin and other cryptocurrencies.

Amazon may be planning to let customers pay for orders with cryptocurrencies.

Photo: David Ryder/Getty Images

Amazon is looking to hire a digital currency and blockchain expert suggesting a plan to let customers accept cryptocurrencies as payments.

The tech giant's job opening says Amazon is looking for "an experienced product leader" to help develop the company's "digital currency and blockchain strategy and roadmap" Amazon is looking for product leader with expertise in blockchain, distributed ledger, central bank digital currencies and cryptocurrency.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Signal at (510)731-8429.

Protocol | Policy

Big Tech tried to redefine terrorism online. It got messy fast.

The Global Internet Forum to Counter Terrorism announced a series of narrow steps it's taking that underscore just how fraught the job of classifying terror online really is.

Erin Saltman is GIFCT's director of programming.

Photo: Paul Morigi/Flickr

A little over a month after the Jan. 6 riot, the tech industry's leading anti-terrorism alliance — a group founded by Facebook, YouTube, Microsoft and Twitter — announced it was seeking ideas for how it could expand its definition of terrorism, which had for years been more or less synonymous with Islamic terrorism. The group, called the Global Internet Forum to Counter Terrorism or GIFCT, had been considering such a shift for at least a year, but the rising threat of domestic extremism, punctuated by the Capitol uprising, made it all the more clear something needed to change.

But after months of interviewing member companies, months of considering academic proposals and months spent mulling the impact of tech platforms on this and other violent events around the world, the group's policies have barely budged. On Monday, in a 177-page report, GIFCT released the first details of its plan, and, well, a radical rethinking of online extremism it is not. Instead, the report lays out a series of narrow steps that underscore just how fraught the job of classifying terror online really is.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Latest Stories