Square Rebrands as Block Hear How Jack Dorsey Bets on Blockchain

Following Facebook’s announcement of changing its name to Meta, in December 2021, the US mobile payment giant Square announced that it would change its name to Block. The name change to Block reflects the company’s expansion beyond payments over the past few years, and also hints that it will be betting more on new technologies such as blockchain in the future.

In this article, 01 Blockchain will sort out what Jack Dorsey, the man at the helm behind Square’s name change, thinks about blockchain. Dorsey founded Twitter and Square successively.

Who is Jack Dorsey

Jack Patrick Dorsey, born November 19, 1976, is an American technology entrepreneur and philanthropist. He is the co-founder and former CEO of Twitter and the founder and CEO of financial payments company Block, Inc. (formerly Square).

Dorsey became interested in software development at the age of 14, developing open-source routing and dispatching software that is still used by taxi companies today. Dorsey attended Missouri University of Science and Technology in 1995 and transferred to New York University in 1997, before moving to California to work as a programmer. In 2000, Dorsey started his own business in Auckland, dispatching couriers, taxis and emergency services through the web. In July 2000, he had the idea for real-time status communication and started Twitter. On November 29, 2021, Dorsey announced that he would be stepping down as Twitter’s CEO to be replaced by Parag Agrawal.

Dorsey and Jim McKelvey developed a small business platform in 2010 to accept debit and credit card payments on a mobile device called Square (released May 2010). This small square device connects to an iPhone, iPad, iPod Touch, or Android device via the headphone jack and acts as a mini card reader, allowing a person to swipe their card, select an amount to transfer to the recipient, and then sign their name for confirmation . Square is also a system for sending paperless receipts via text or email, and it’s available as a free app for the iOS and Android operating systems. In September 2012, Business Insider magazine valued Square at $3.2 billion. On October 14, 2015, Square filed to list on the New York Stock Exchange. Dorsey owns 24.4% of the company. On December 1, 2021, CEO Dorsey officially changed the company name of Square to Block, Inc. As of December 27, 2021, Block’s market capitalization has reached $77 billion.

Square Rebrands as Block Hear How Jack Dorsey Bets on Blockchain

Block’s share price movement

Views on blockchain

“The ₿ Word” one-day summit will be held on July 21, 2021. Elon Musk, the world’s richest man and Tesla CEO, Jack Dorsey, former CEO of Twitter, and Cathie Wood, CEO of Ark Investments, attended and Dialogue discussions took place.

Dorsey shares his exposure to the blockchain world and his thoughts. He said that he had been interested in cypherpunks before, and he was aware of the predatory nature of the Internet, and Bitcoin’s potential to disrupt the existing payment system attracted him. He also said that he believes that to spare no effort to promote Bitcoin now is like being in the early stage of the Internet’s birth and development.

Dorsey believes that our current monetary policy and monetary system have unnecessary waste of cost and consumption of trust and attention. Bitcoin, on the other hand, is trustless, anyone can pass the source code inspection, and is not controlled by a single company, bank or country. He gave an example at the meeting that he actually encountered. An Ethiopian girl tries to set up her own Didi (car-sharing company) in Ethiopia. But the main obstacle for the girl is that Ethiopia currently does not have a complete digital payment system, and Bitcoin can perfectly solve this problem.

In addition, Dorsey also hopes that himself and the Block company he founded can help Bitcoin to further promote the development of world decentralization. He also hopes that Bitcoin can improve the basic level of society by improving.

He also expressed his love for Bitcoin at the summit. He said that if he wasn’t working on Twitter and Block, he would be working on Bitcoin. Obviously he is a complete Bitcoin fan. In addition, well-known singer Cardi B asked Dorsey on Twitter if Bitcoin would replace the US dollar, and Dorsey replied that it would.

Square Rebrands as Block Hear How Jack Dorsey Bets on Blockchain

Dorsey Twitter

Views on Internet 3.0

On December 21, 2021, Dorsey tweeted: “Users do not actually own Web3 products. The actual owners of Web3 are the venture capital institutions (VCs) and their limited partners (LPs) behind the projects. Web3 cannot be separated from their designs. In the end, Web3 will be a centralized entity with different labels.” This tweet attracted some dissatisfaction from the blockchain industry, especially the top blockchain capital a16z, and then they revolved around “Web3 and its dominance” debate.

Square Rebrands as Block Hear How Jack Dorsey Bets on Blockchain

Dorsey Twitter

Dorsey tweeted the question: “Who does Web3 belong to?”. Then a16z replied to Dorsey’s Twitter that Web3 is mainly open source, it belongs to users, and there are very few parts owned by institutions. Dorsey later tweeted: “a16z wants to be a huge media empire, not Gandhi.” His underlying meaning may be that a16z wants to control Web3 rather than liberate Web3. Dorsey then went on to tweet, “In a Web 3 world, VC is the problem, not the user.”

Square Rebrands as Block Hear How Jack Dorsey Bets on Blockchain

Dorsey Twitter

This online scolding mainly revolves around whether the dominance of Web3 belongs to users or venture capital. Both sides of the debate are the strongest representatives deeply involved in Web2 (founding Twitter) and Web3 (investing in many related projects). In addition, Musk echoed Dorsey’s argument that the concept of Web3 sounds “rubbish.”

Square Rebrands as Block Hear How Jack Dorsey Bets on Blockchain

Musk Twitter

Andreessen Horowitz (also known as a16z, registered under the legal name AH Capital Management) is an American private venture capital firm founded in 2009 by Marc Andreessen and Ben Horowitz and headquartered in Menlo Park, California. Andreessen Horowitz invests in early stage startups and established growth companies. Its investments span the mobile, Crypto, gaming, social, e-commerce, education and enterprise IT (including cloud computing, security and software-as-a-service) industries.

Since 2009, a16z has invested in Internet giants such as Facebook, Groupon, Skype, Twitter, etc., and has successfully exited for profit after some companies went public. It is a dazzling investment star in the Internet era. While many risk institutions have not paid attention to the blockchain, a16z entered the scope of Crypto very early. In 2013, a16z invested USD 25 million (approximately RMB 160 million) in Series B financing of the crypto exchange Coinbase. A16z’s early investment paid off handsomely after its Coinbase listing. In addition, a16z has also established a16z Crypto, a blockchain investment fund. The projects invested by a16z Crypto cover almost all encryption tracks such as public chains, DeFi, and NFTs.

This scolding can be said to be caused by the different ideas of the representatives of the old era and the possible “new era”. Who does Web3 belong to, only time will tell us the answer. But the views of people in the industry can also enlighten us, maybe Web3 is really difficult to completely belong to users.

Twitter accepts Crypto tips and NFT transactions

On September 23, 2021, Twitter announced that it has cooperated with Strike, a Crypto wallet company based on the Bitcoin Lightning Network, using Srike’s API platform to launch a new feature called Tips, allowing Twitter users to use Bitcoin to create their favorite content If a user makes a tip, Twitter will not charge any fees to the sender and receiver of the tip.

Twitter previously only supported users to tip in traditional fiat currencies, and this is the first time that Crypto has been introduced. Twitter also announced that there may be new Crypto-related features in the future, allowing users to verify and display their NFT collections on Twitter’s platform.

Earlier, Dorsey auctioned his first tweet in the form of NFT, and the transaction price was $2.915 million (about 18.57 million yuan).

In response, Esther Crawford, Twitter’s product executive for building content creator functions, said Twitter’s creators are increasingly interested in adopting related software and applications running on the blockchain. Twitter wants to help creators participate in the development of the decentralized internet on Twitter. Twitter believes that Crypto is still in its infancy, but they are the way of the future.

The NFT market will usher in explosive growth in 2021. As of December 28, 2021, the NFT market transaction volume in the past week reached $286 million.

Square Rebrands as Block Hear How Jack Dorsey Bets on Blockchain

NFT market data for the past week ending December 28, 2021

Source: Nonfungible website

Block changed its name to Block to focus on the field of Crypto

On December 1, 2021, CEO Jack Dorsey officially changed the company name of Square to Block, Inc. The Block name itself refers to the technology behind encryption, the blockchain. Block announced in a tweet that it was rebranding and integrating the company with its software, Cash App.

Square Rebrands as Block Hear How Jack Dorsey Bets on Blockchain

Block’s rebranded Twitter

Block will also merge with music and video streaming platform Tidal, according to Block’s Twitter feed. In response, Dorsey said, “Block is a new name, but our goal of empowering the economy remains the same. No matter how we grow or change, we will continue to build tools to help improve the economy.”

Cash App (formerly Block Cash) is a mobile payment service developed by Block. Cash App allows users to transfer funds using a mobile app. As of September 2021, the Cash App service has more than 70 million active users. From January 2018, Cash App supports Bitcoin transactions.

Entry to buy bitcoin

Block has purchased Bitcoin between October 2020 and February 2021. On October 10, 2020, the company purchased 4,709 bitcoins worth about $50 million, an investment that represented almost 1% of the company’s total assets at the time. On February 24, 2021, Block once again bought about 3,318 bitcoins for $170 million, with an average price of $51,200. After the two transactions are combined, the cost price of a single bitcoin is about $27,407.

The company said in a press release that Crypto is a means of economic empowerment and can provide a way for the world to participate in the global monetary system, which is consistent with the company’s purpose. “Bitcoin has the potential to become a more common currency in the future, and as its utilization continues to grow, we intend to learn and engage in a more compliant way,” said Amrita Ahuja, Block’s CFO. For companies with more inclusive future products, this investment is a critical step on that path.”

In fact, as early as 2019, Block established an independent team, Block Crypto, dedicated to contributing to the open source work of Bitcoin. Block has even launched a non-profit organization, the Crypto Open Patent Alliance (COPA), to encourage crypto innovation and open access to patented crypto products. This series of moves to support Crypto has paid off handsomely for Block. Block allows consumers to use the Cash App to spend and store bitcoin. Block’s bitcoin revenue also grew from $516.5 million in 2019 to $4.75 billion last year.

Square Rebrands as Block Hear How Jack Dorsey Bets on Blockchain

Block’s Cash App continues to grow

Source: The Block

The news of Block’s purchase of Bitcoin also drew comments from Thaler. Thaler commented on Block’s news on Twitter: “Bitcoin is a great reserve asset, and I have a lot of admiration for the team at Block to lead the way.”

However, as Bitcoin experienced a downturn between April and August, the Bitcoin assets on Block’s books began to lose money. On May 15th, Block released the 2021 Q1 financial report. After recording a loss of 20 million US dollars in related bitcoin investments, Chief Financial Officer Amrita Ahuja said that Block has no further plans to buy bitcoin at present. In addition to this, he also mentioned the carbon footprint of the Bitcoin network, which he said needs to be addressed in the future.

Ahuja said that the market value of Bitcoin held by Block had risen to $472 million, but when the earnings report was released, Bitcoin investment recorded a loss of $20 million. The $220 million used to buy bitcoin represented 5 percent of the company’s cash balance.

Bitcoin still has high volatility to this day. Although its overall return is very impressive, its “roller coaster” price movement is not what market investors are happy to see, which will affect Block’s share price. Bitcoin’s unpredictable movements make Block’s overall market cap unpredictable. In addition, Block is still in a stage of rapid development today. The loss caused by buying Bitcoin is unbearable for Block. This also led to Block’s statement at the earnings conference after recording a loss that it has no further plans to buy Bitcoin.

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