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.

Theranos’ investor pitches go on trial

Prosecutors in the Elizabeth Holmes fraud case are now highlighting allegations the company sought to mislead investors.

The fresh details of unproven claims made about the viability of Theranos' blood tests and efforts to conceal errors when demonstrating testing equipment added to the evidence against Holmes, who is accused of fraud in her role leading the company.

Photo: David Paul Morris/Bloomberg via Getty Images

The Theranos trial continued this week with testimony from Daniel Edlin, a former product manager at the blood-testing startup, and Shane Weber, a scientist from Pfizer. Their testimonies appeared to bolster the government's argument that Holmes intentionally defrauded investors and patients.

The fresh details about audacious and unproven claims made about the viability of Theranos' blood tests and efforts to conceal errors when demonstrating testing equipment added to the evidence against Holmes, who is accused of fraud in her role leading the company.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporting fellow at Protocol, based out of Los Angeles. Previously, she worked for Ernst & Young, where she researched and wrote about the future of work, emerging technologies and startups. She is a graduate of the University of Southern California, where she studied business and philosophy. She can be reached at acounts@protocol.com.

The way we work has fundamentally changed. COVID-19 upended business dealings and office work processes, putting into hyperdrive a move towards digital collaboration platforms that allow teams to streamline processes and communicate from anywhere. According to the International Data Corporation, the revenue for worldwide collaboration applications increased 32.9 percent from 2019 to 2020, reaching $22.6 billion; it's expected to become a $50.7 billion industry by 2025.

"While consumers and early adopter businesses had widely embraced collaborative applications prior to the pandemic, the market saw five years' worth of new users in the first six months of 2020," said Wayne Kurtzman, research director of social and collaboration at IDC. "This has cemented collaboration, at least to some extent, for every business, large and small."

Keep Reading Show less
Kate Silver

Kate Silver is an award-winning reporter and editor with 15-plus years of journalism experience. Based in Chicago, she specializes in feature and business reporting. Kate's reporting has appeared in the Washington Post, The Chicago Tribune, The Atlantic's CityLab, Atlas Obscura, The Telegraph and many other outlets.

Protocol | Policy

8 takeaways from states’ new filing against Google

New details have been unsealed in the states' antitrust suit against Google for anticompetitive behavior in the ads market.

Google is facing complaints by government competition enforcers on several fronts.

Photo: Drew Angerer/Getty Images

Up to 22%: That's the fee Google charges publishers for sales on its online ad exchanges, according to newly unredacted details in a complaint by several state attorneys general.

The figure is just one of the many details that a court allowed the states to unveil Friday. Many had more or less remained secrets inside Google and the online publishing industry, even through prior legal complaints and eager public interest.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Protocol | Workplace

This tech founder uses a converted Sprinter van as an office on wheels

The CEO of productivity startup Rock likes to work on the road. Here's how he does it — starting with three different WiFi hotspots.

Kenzo Fong, founder and CEO of the 20-person productivity software startup Rock, has been working out of his converted Mercedes-Benz Sprinter van since the pandemic began.

Photo: Kenzo Fong/Rock

Plenty of techies have started companies in garages. Try running a startup from a van.

In San Francisco, one software company founder has been using a converted Mercedes-Benz Sprinter van — picture an Amazon delivery vehicle — as a mobile office.

Keep Reading Show less
Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.
Protocol | Policy

Most Americans want AI regulation — and they want it yesterday

In a poll, people said they wanted to see artificial intelligence technologies develop in the U.S. — alongside rules governing their use.

U.S. lawmakers have only just begun the long process of regulating the use of AI.

Photo: Louis Velazquez/Unsplash

Nearly two-thirds of Americans want the U.S to regulate the development and use of artificial intelligence in the next year or sooner — with half saying that regulation should have begun yesterday, according to a Morning Consult poll. Another 13% say that regulation should start in the next year.

"You can thread this together," Austin Carson, founder of new nonprofit group SeedAI and former government relations lead for Nvidia, said in an email. "Half or more Americans want to address all of these things, split pretty evenly along ideological lines."

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

ai
Latest Stories