Twitter boss Jack Dorsey wants to build a decentralized Bitcoin exchange and thus enable more users to get started with BTC.
Square’s “Cash App” is a popular way for people to buy and sell Bitcoin – but CEO Jack Dorsey’s love for the leading cryptocurrency is immense. So the financial services company plans to do a lot more in this area. Last month, Dorsey announced a new Bitcoin-centric division called “TBD,” and he has just revealed what it will be: some kind of decentralized exchange.
Decentralized exchanges (DEX for short) based on other blockchains are already established – such as Ethereum’s Uniswap, SushiSwap and Binance Smart Chains PancakeSwap. However, TBD intends to create a completely permission-free and decentralized exchange around Bitcoin in order to offer users a wide range of options for exchanging fiat currency for BTC.
An open platform for the BTC-DEX
Dorsey on Twitter:
“We have [TBDs] Direction set: Help us build an open platform to create a decentralized exchange for Bitcoin. “
We’ve determined @ TDB54566975’s direction: help us build an open platform to create a decentralized exchange for #Bitcoin https://t.co/jHYWHy1qmu
– jack⚡️ (@jack) August 27, 2021
In contrast to Coinbase and Binance, for example, there is no central intermediary with a DEX who monitors the token exchange: it takes place directly between the users. However, a DEX cannot use fiat currency because it lacks the necessary links with traditional financial institutions and there are no regulatory compliance procedures for customers.
Square’s vision of a Bitcoin DEX will apparently take a different path. Dorsey linked to a detailed post by Square executive Mike Brock, the leader of the TBD project, who detailed the possible ways to build the open source DEX.
“We believe that Bitcoin will be the Internet’s native currency,” writes Brock.
“While there are many projects out there that are helping to make the Internet more decentralized, our focus is solely on a solid global monetary system for everyone. But in order to include everyone, there are some parts that we think are still missing. “
There’s been a lot of speculation about what TBD is and isn’t. Over the last few weeks our team has been determining what needs to be determined. We wanted to finally share our direction, and we have some questions.
– Mike Brock (@brockm) August 27, 2021
Cash app and Coinbase with “problems”
Brock points to Cash App and Coinbase as centralized ways to exchange fiat currency for bitcoin. He adds, however, that they “have a number of problems” and that the global implementation is different. Ultimately, Square wants to create a service that allows users to fund any type of Bitcoin wallet – even those not hosted by a central exchange or service – with fiat currency.
Dorsey himself is a bitcoin maximalist. This means that he dismisses all other cryptocurrencies as unimportant. So it comes as no surprise that Square wants to develop this project using only Bitcoin infrastructure. Brock named RSK, a smart contract platform secured by the Bitcoin blockchain, as a possible option. But he also admitted that some pieces of the puzzle might require the use of other blockchains:
“The gaps that are needed for the construction could be too big, which would lead us to consider other chains as a bridge.”
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