By Krystal Hu and Sheila Dang
– At a packed Miami conference in June, Jack Dorsey, mused in front of thousands of attendees about where his real passion lay: “If I weren’t at Square or Twitter, I’d be working on bitcoin.”
On Monday, Dorsey made good on one part of that, announcing he would leave Twitter for the second time, handing the CEO position to a 10-year veteran at the firm. The 45-year-old entrepreneur, who is often described as an enigma with varied interests from meditation to yoga to fashion design, plans to pursue his passion which include focusing on running Square Inc and doing more philanthropic work, according to a source familiar with his plan.
Well before the surprise news, Dorsey had laid the groundwork for his next chapter, seeding both companies with crypto-related projects.
Underlying Dorsey’s broader vision is the principle of “decentralization,” or the idea that technology and finance should not be concentrated among a handful of gatekeepers, as it is now, but should, instead, be steered by the hands of the many, either people or entities.
The concept has played out at Square, which has built a division devoted to working on projects and awarding grants with the aim of growing bitcoin’s popularity globally.
Dorsey has been a longtime proponent of bitcoin, and the appeal is that the cryptocurrency will allow for private and secure transactions with the value of bitcoin unrelated to any government.
The idea has also underpinned new projects at Twitter, where Dorsey tapped a top lieutenant – and now the company’s new CEO Parag Agrawal – to oversee a team that is attempting to construct a decentralized social media protocol, which will allow different social platforms to connect with one another, similar to the way email providers operate.
The project called Bluesky will aim to allow users control over the types of content they see online, removing the “burden” on companies like Twitter to enforce a global policy to fight abuse or misleading information, Dorsey said in 2019 when he announced Bluesky.
Bitcoin has also figured prominently at both of his companies. Square became one of the first public companies to own bitcoin assets on its balance sheet, having invested $220 million in the cryptocurrency.
In August, Square created a new business unit called TBD to focus on bitcoin. The company is also planning to build a hardware wallet for bitcoin, a bitcoin mining system, as well as a decentralized bitcoin exchange.
Twitter allows users to tip their favorite content creators with bitcoin and has been testing integrations with non-fungible tokens (NFTs), a type of digital asset that allows people to collect unique digital art.
Analysts see the transition as a positive signal for Square, the fintech platform he co-founded in 2009. Square’s core Cash App, after a bull run in its share in 2020, has experienced slower growth in the most recent quarter. It is also trying to digest the $29 billion acquisition of Buy Now Pay Later provider Afterpay, its largest acquisition ever.
But these ambitions will not pay off until years from now, analysts cautioned.
“The blockchain platform they’re trying to develop is great but also fraught with technical challenges and difficult to scale for consumers. I think he’ll focus more on Square and crypto will be part of that,” said Christopher Brendler, an analyst at DA Davidson.
(Reporting by Krystal Hu and Elizabeth Culliford in New York and Sheila Dang in Dallas; Editing by Kenneth Li and Lisa Shumaker)