Both Twitter and Square are experimenting with cryptocurrencies and blockchain technology.
“It’s hard to imagine a more polarizing topic debated in the finance community than the utility of decentralized networks and cryptocurrencies,” writes Jared Podnos, CFA, head of global financial data partnerships at Twitter, in a recent post.
Podnos also posted a Twitter poll to gauge what Twitter users think about the debate. The majority — 75% of the over 600 respondents — believes cryptocurrencies like Bitcoin are the future.
Now, before going any further, let’s first put cryptocurrencies, Bitcoin, and blockchain into context.
I’m using here a definition by PwC US:
- A cryptocurrency is defined by PwC as “a medium of exchange, such as the US dollar, but is digital and uses encryption techniques to control the creation of monetary units and to verify the transfer of funds.”
- PwC explains that Bitcoin “is the name of the best-known cryptocurrency, the one for which blockchain technology was invented.”
- And blockchain is defined as “a digital, decentralized ledger that keeps a record of all transactions that take place across a peer-to-peer network.” According to PwC, “the major innovation is that the technology allows market participants to transfer assets across the Internet without the need for a centralized third party.”
Back to Twitter and Jack Dorsey, Podnos believes that “cryptocurrencies are a topic that is sure to spark a heated debate in your timeline” and that includes blockchain technology.
Dorsey, co-founder and CEO of both Twitter and Square, himself said back in September that “there are clear global benefits to cryptocurrencies” both in terms of services and for businesses.
In the summer, in an interview with Lauren Goode at the Computer History Museum in Mountain View, California, Dorsey called blockchain the “next big unlock,” but also warned: “we need to be more thoughtful.”
What are people struggling with? How does the technology help them progress or does it distract them?
Square, which briefly accepted as a form of payment in 2014, is now experimenting with Bitcoin even more.
“I don’t think we know yet what it’s going to be, but I think, absolutely, as an innovator, Square has to be there to let a customer do what they want to do,” the company CFO Sarah Friar told CNBC.
“You’re talking about it, it’s out there, and so we want to do an experiment and say, ‘OK, is this real? Do customers actually want to be able to do this?’,” Friar said. “And then what it does internally is it makes everyone who supports that sort of innovation get to work and figure out how do we do this and do this in the right way?.”
According to TechCrunch, Square is testing cryptocurrency support in their Cash app. “The trial, which seems to only be available right now to a small number of users, lets you buy and sell bitcoin directly in the app,” TechCruch says.
Speaking with New York Times columnist and CNBC anchor Andrew Ross Sorkin at DealBook Conference, Dorsey touched upon financial innovations like bitcoin and blockchain and said they could have wide-ranging and “seminal” implications.
“It’s a decentralized ledger. That has extreme power,” Dorsey stated. “I want to make sure as a company — and this is not just Square, but also Twitter — that we’re looking at technologies like the blockchain, like cryptocurrencies, and learning from it, and learning how to apply it.”