The rapid growth of the crypto asset market in the past year is inseparable from the assistance of traditional payment giants.
Paypal, with 377 million users, has opened up the ability to trade and hold Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH) and Litecoin (LTC) for users in the U.S. and U.K., while enabling users to use these cryptocurrencies assets to pay; Visa and Mastercard have issued encrypted credit and debit cards on multiple continents around the world, making it easier for Bitcoin and Ethereum to buy goods and services.
It is clear that these payment giants are “fascinated” by the advantages of point-to-point, more privacy, faster transactions and lower fees of encrypted assets as payment methods.
However, Square, led by former Twitter CEO Jack Dorsey, took a different approach, first buying 8,027 bitcoins, now worth about $240 million, and integrating crypto-asset trading functions for its 40 million-user Cash APP. Later, the company even changed its name to Block directly, focusing on the development of the Bitcoin product matrix, focusing on Bitcoin.
“Holding Bitcoin and empowering it” has become Block’s purpose, and “Bitcoin is the best Internet native currency” has become Block’s goal.
The following is translated from a presentation at the Block 2022 Investor Conference, and listen to how Jack Dorsey leads the Block company to nugget the Bitcoin ecosystem.
<Block CEO>Jack Dorsey：
I said at the opening that I think Bitcoin is an extraordinary trend in the development of standards for global money transmission, what does that mean?
The reason we started Block (formerly Square) as a company was to help people get into the financial system, as a step forward from credit cards and a step from face-to-face transactions to digital commerce. While the credit card is more global, it is still exclusive and controlled by a few companies.
To be sure, everyone on this planet will have access to the Internet in some way, but not being able to participate in the global financial system. To achieve this, we need a protocol that is native to the Internet, a standard that is inclusive, trustworthy, and scalable to the entire human race.
You may have heard that blockchains and crypto assets do this, but for something as important as storage and exchange of value, we have to require certain properties of the system – open, secure, and scalable. Openness ensures that the system has maximum transparency in both its development and operation, and is accessible to anyone who wishes to use it. Security means that individuals have the keys to unlock their assets, and it is resistant to all forms of attacks from other individuals, companies. Scalable means that these properties grow stronger as more people use it, while maximizing efficiency and usability.
The Internet needs a native currency, and this currency needs to have a complete technical ecosystem. Bitcoin is the most suitable solution at present.
Why did we choose Bitcoin as the focus of the company? Focusing on Bitcoin has forced us to change the way we build it, and we must be equally open to every opportunity to enhance its openness, security, and scalability.
The first time we really pushed this was the creation of Spiral, a team of open source engineers, and now they’re focusing on Bitcoin’s Lightning Network. Two years after the team was founded, they launched the LDK (Lighting Decelopment Kit), a software development kit that helps developers create applications using the Lightning Network in the easiest and fastest way possible.
While The Block Company will not use Spiral’s toolkit, we do so simply to make the Bitcoin network stronger. But after an exhaustive exploration of all Bitcoin technologies, our payment application Cash APP wanted to integrate Bitcoin’s Lightning Network payments, using LDK developed by Spiral because of its technical excellence. It’s a success story, and I’m proud of building the Bitcoin ecosystem, and our actions are helping our company in the long run.
So we want to continue to fill other gaps in the Bitcoin ecosystem in this way, for example we are working on personal hardware wallets to increase user access to Bitcoin; Bitcoin mining systems to further decentralize and secure the network; TBD, a The centralized identity system, on which the tbDEX protocol is a trusted exchange without a centralized intermediary, can become a bridge connecting Bitcoin and fiat currencies.
All of these products are developed within the Bitcoin ecosystem, are open source by default, and have complementary business models between the products. That said, Block is building a “universe” around Bitcoin for new customers.
We hope that Bitcoin can become the standard of the Internet and by helping it become our new opportunity to help people access the global financial system.
<Developer Tools> Spiral Leader, Steve Lee:
We founded Spiral in 2019, a small independent team free from the direction and interference of Block for commercial interests. Instead, you can think of the wider Bitcoin ecosystem as our “clients”.
We believe Bitcoin is not just an investment, it is our ideal “best money”. Therefore, we build and fund free and open source projects aimed at improving Bitcoin user experience, security, privacy, and scalability.
The value of Bitcoin aligns with Block’s mission of financial empowerment. One of Block’s core visions is that anyone in the world should have the ability and ease to participate in the financial system, and Bitcoin can achieve this vision by enabling people everywhere to pay more efficiently.
However, it is not easy to achieve it. Spiral has identified several gaps in the Bitcoin ecosystem:
First, the development tools available to Bitcoin developers have always been few and far between and the experience has been poor.
Secondly, in terms of design, the attention to user needs is not high.
In this regard, we propose two plans to solve it: LDK and the Bitcoin Design Community.
The Bitcoin Design Community is an open Bitcoin developer community where members can come up with new ideas and work together to practice.
And our team members are focusing on LDK, making it easier for more and more developers to build great applications on the Lightning Network. Whereas 20 years ago it might have taken a development team years to develop an application, today, developer tools allow a single person to create a convincing application in a matter of weeks. This is what LDK has done for the Bitcoin ecosystem and we have seen LDK being adopted by popular applications such as Blue Wallet.
So how will our work affect The Block Company?
As Jack just mentioned, Cash APP integrates Bitcoin Lightning Network using LDK, users can send, receive and trade Bitcoin instantly, and the integration time is only a few months. So with LDK, Block can integrate Lightning Network into products faster, saving a lot of time and resources.
In addition, the Spiral Development Fund has funded more than 40 Bitcoin project developers in more than 15 countries and regions. It can be said that this is the most influential of all Bitcoin development funds.
We’re also looking at how women perceive and use bitcoin to make sure it’s accessible to all.
By building credibility and helping to expand the ecosystem, we are influencing the future of Bitcoin. Spiral will continue to promote the adoption of Bitcoin throughout the world, allowing it to eventually become “the currency of the Internet.”
<Wallet + Mining> Hardware Leader, Jesse Dorogusker:
Asset ownership in Bitcoin is defined by keys, and if you don’t have keys, you don’t have assets. In a decentralized future, the global financial infrastructure will be built on this simple idea.
Today, there are an estimated 175 million bitcoin holders worldwide, many of whom are located in emerging economies without actually having keys and relying on custodians that hold keys on their behalf, just as most people today manage through banks way of funding.
People who choose an escrow service do so for convenience and worry about accidental loss of keys. However, custodian service providers such as crypto asset trading platforms and wallets are not all custodians that everyone can trust.
A trusted hosting service depends on:
– When can I withdraw money?
– How are your funds secured?
– Do you have access to their services at any time?
Today, keeping your own keys is not as simple as it sounds. Early Bitcoin users used complex applications or hardware devices that were highly technical and difficult to use. Also, if you accidentally lose your phone or hardware wallet, often the only way to get it back is to rely on the customer’s 12 or 24 secret phrases, which are either lost over a long period of time or written on a sticky note just in case forget. Even today’s more savvy users of crypto assets have to hold their breath in the hope that they don’t make mistakes that lead to unexpected losses, or fall victim to hackers.
The opportunity for Block is to build a safe and simple way for ordinary people to hold and manage bitcoin, so that more people can take ownership of bitcoin.
We are building a wallet that divides the functionality into three parts:
– Mobile app: The part of the wallet that users use to manage their funds, enabling them to utilize their smartphone for more frequent activities such as sending, paying and receiving. With more than 3 billion people in the world now owning a smartphone, managing financial services from a mobile phone is very attractive, so we are constantly polishing the product experience.
– Secure Hardware Device: As a second layer of protection for large transactions, security goes a step further for larger, less frequent users. If you lose or replace your phone, the hardware device also allows users to securely introduce keys into the new phone.
Self-service recovery tools: Helps users if they lose part of their keys.
Self-managed friendly wallets are an easier option for mainstream customers who are not yet, but definitely will, Bitcoin.
We are developing this product publicly and have shown our code that anyone can check and verify to earn the trust of the Bitcoin community.
In the traditional financial system, banks are trusted to protect customers’ assets. Bitcoin is a distributed ledger, and Bitcoin miners contribute calculations in exchange for economic returns to ensure the safe settlement of transactions without trust. Any individual and business can participate using a mining computer with computing power.
But the barriers to participating in mining today are very high, mining machines are difficult to maintain and operate, and the cost is high. Therefore, mining is very concentrated and the field is exclusive.
We believe we can build high-performance mining components and an easy-to-use cost-effective system that enables more miners to participate, resulting in a more efficient and distributed network.
When we look at the current landscape of Bitcoin mining, we can see several opportunities to improve it and make it easier to acquire cores.
The technology behind the professional mining computer is an application-specific integrated circuit (ASIC) optimized for the lowest power consumption and lowest cost Bitcoin computing. Today, the manufacture and sale of Bitcoin ASICs is concentrated in a few companies, and this concentration introduces supply and cost risks.
So we see an opportunity to build our own Bitcoin ASIC that is optimized for cost, performance and smart system integration, is simple to use, and will be sold with a reference data sheet and companion software to make it suitable for other blocks chain network.
Today, the same market concentration exists in all open source mining systems, including computing, power, management, cooling, and products, which significantly increases the computing power of a small number of miners, so mining itself is also highly concentrated. Hash rate is a measure of the amount of computation per second in the Bitcoin network, and according to a recent study by MIT and the London School of Economics, 50% of the current hash rate is in the hands of the top 0.1% of miners, who are just are 50 companies.
Make it easier for our mining systems to be successful by applying our expertise in mining system design, development and Block’s global supply chain.
We also see that the current mining system has not been optimized for the use of clean energy through intelligent system integration, especially solar energy and other renewable energy sources, and we can improve the efficiency of the use of clean energy through the mining system that is being built.
We are also exploring creating a distributed mining cloud service that relies entirely on clean energy. We believe that there are consumers and businesses that are interested in mining but do not want to take on the burden of maintaining their own mining machines. So we will build a model where “customers buy remote mining machines and connect to clean energy through Block Company”. This will allow customers to participate in bitcoin mining on a more level playing field with larger companies that have more control and access to energy and equipment.
Addressing all these shortcomings will create a more durable and decentralized Bitcoin ecosystem.
This is also a considerable business opportunity for the Block company. We expect mining-related capital expenditures to reach billions of dollars as demand on the Bitcoin network increases; the Bitcoin mining market is huge, with total mining revenue growing from about $5 billion in 2020 to about $17 billion in 2021. As mining revenue grows, miners will continue to seek avenues to capture a portion of this growing market. So we believe that Block can use its hardware product expertise and design philosophy to make a significant impact in this area.
However, mining requires a lot of capital investment and the income profile is not completely predictable, and we can borrow to lower the barriers to entry and help them unblock their cash flow. Ultimately, miners can store their mining rewards in our Bitcoin wallet and Cash APP, which they can withdraw at any time.
We’re excited about the opportunity to make Bitcoin mining more efficient and decentralized, and that’s what we do at Block.
<Decentralized Identity + Transaction> TBD Director, Mike Brock:
At Block, we’ve been building payment systems that connect people to finance for a decade. Through Square Reader (POS), we connect millions of small businesses to payment systems, enabling them to sell in an increasingly cashless society through the Cash APP. It can be said that we have made great strides in increasing financial access.
But our efforts are limited by the traditional financial system. Today, more than a billion people worldwide do not have access to a bank account, and two-thirds of them have internet-connected smartphones, but why are we able to connect to them? The Internet and wireless technologies have provided the information infrastructure we need, but money and payments have not kept pace, they are still old-fashioned, slow, payment systems.
In the new digital economy era, we believe that technologies like Bitcoin can fundamentally improve the global financial system, so now that we have a traditional payment system and a new payment system, how do we transition from the old to the new? This is TBD’s mission to connect the two payment systems by simplifying the API and SDK.
We have established a new open source company focused on building open protocols, open standards and an open developer community to create an ecosystem of tools where all participants can benefit from individuals, businesses, institutions and even governments.
It can be simply understood as: Red Hat focuses on Linux, Mulesoft focuses on SaaS, Databricks focuses on data science, Elastic focuses on search engines, and TBD focuses on decentralized identity systems.
The immense power and potential of the Internet has always been the democratization of access to information, a power that has unleashed a torrent of innovations that have fundamentally changed our world. But the account model of the internet breaks the way we authenticate and authenticate ourselves, and the internet is actually becoming more and more centralized.
Our identity on the internet is represented by a handful of very large companies, a model that serves the interests of platforms and not the interests of users in the privacy and control they have to give. We need to solve this problem, and decentralized identity is the answer to building a more inclusive digital economy.
Identity verification is one of the biggest thorns in gaining financially marginalized access, and among newcomers to the U.S., even those with good education and no credit history, first-time attempts to access financial services are often “painful” .
However, isn’t it weird that financial services have something to do with credit files? Does it really make sense for how we verify identity?
The scope of the problem is enormous, and it is ludicrous to leave 1.1 billion people around the world unable to prove who they are.
Decentralized identity replaces your account password on the traditional platform with your own Token, which is legal and compliant and protects privacy. This token can be used in any service infrastructure, such as for KYC, driver’s license or any similar proof.
It’s not just about individuals, it also makes sense for businesses that can’t solve the problem, which may end up opting for a more secure decentralized identity system due to the risks posed to users by using a less secure identity data system , which will enable businesses to build a more streamlined customer experience, reduce costs, and ultimately benefit themselves.
With the decentralized identity system as the “foundation”, Block Company has the foundation to build a truly decentralized protocol and decentralized network, such as connecting the world of traditional currencies to the world of encrypted assets, which is what tbDEX does.
tbDEX integrates the three elements of the Internet’s information democratization, Bitcoin and a decentralized identity system. Users can enter and exit the world of encrypted assets in an open, permissionless and decentralized way, which will effectively reduce the Transaction costs per person, while enabling people around the world to move money in a safe and compliant manner, increasing the accessibility and inclusion of the crypto-asset world.
When decentralized identity systems are deployed at scale, we have the potential to reinvent the entire financial infrastructure, closer to the one-click experience that each of us desires. Who doesn’t like having their wallet created on top of their identity and ultimately going straight from “old money” to “new money”?
I believe you have understood these abstract concepts, but for us, the decentralized identity system boils down to one important purpose, which is “accessibility of the financial system”.
Let’s say you’re someone affected by the pandemic, you’re unemployed, your bank account is overdrawn, and you can’t open a bank account anywhere anymore, when the new financial system comes, you can pick up your phone and create your own A digital wallet to store bitcoin or stablecoins; you can create your own digital identity and use all digital identity-based services without permission; you can exchange your salary through tbDEX’s online service and deposit stablecoins into your In digital wallets, liquidity pledge benefits; you can convert stablecoins directly into bitcoins without leaving your wallet; you can send money to family members on the other side of the world quickly and at low cost without going through a middleman.
Now, we will all be “citizens” of the new decentralized economy, because the future has come.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/jack-dorsey-builds-bitcoin-product-empire-after-stepping-down-as-twitter-ceo/
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