Is Jack Dorsey Drumming Up Support for Bitcoin Because Lightning Network is Square’s End Game Move?
Good news is Jack Dorsey, a serial innovator and a renowned Silicon Valley entrepreneur is a Bitcoin believer. He owns a bunch of these world’s most valuable scarce coins. Jack Dorsey as we know is a behind Twitter, whose market valuation is more than that of Ethereum and XRP combined at $25.75 billion. The innovator is also behind Square, a megalith with a $29.75 billion market cap. Even though his social media company banned users from posting crypto related adverts, he is an ardent fan of the censorship resistant coin. As a matter of fact, he’s strongly convinced that in ten years, BTC will be a global currency. On numerous occasions, he has reiterated is stance and optimism on crypto. Once during an interview with the Times and most recently when he was interviewed in a podcast. Jack, being a personal investor in BTC, anchors this rapid ascendance as a choice currency for micro-payment on his investment.
The Lightning Labs Connection
Together with David Sacks, Charlie Lee, Kevin Hartz and others they funneled $2.5 million to Elizabeth Stark’s Lightning Labs. This joining of forces had David Stacks excited and shortly after this was made public, he said Lightning Network is “one of the most important projects in crypto overall adding that he is excited to be an investor”. With the guidance of Stark, Lightning Labs is working off Lightning Network (LN).
LN is a scaling solution that takes transaction off the main chain for the sake of speed, scalability and above all micro-payment. Because of this, LN—although novel, re-introduce trust and would likely lead to centralization—through hubs. All the same, there are steps that have been take to guarantee security like the introduction of multi-hoops routing and conditional payments, cryptographic proofs and time-outs now that payments must be made when both parties are online and using LN supporting Bitcoin wallets.
Possible End Game—Square Support of Lightning Network
As a force behind Square—which by the way supports buying and selling of Bitcoin, is Jack Dorsey drumming up for Bitcoin because he has interest in Lightning Network. Note that one of the LN works around central hubs and both parties must use a LN supporting wallet. With Square supporting fiat to BTC purchases and not vice versa, it is therefore sensible to speculate that Square will in one way or another act a custodial wallet for the LN. Jack, has interests in Lightning Labs and owns Square.
Therefore, it is likely that Square will evolve into this centralized hub and make money not only from spreads—buying BTC, but from fees as a dominant hub from where users can open channels from. If anything, this is the only way for normal folks to pay for their coffee using BTC spurring adoption in the process. And their goals are not far-fetched. After all, Square’s network is wide with deep roots in the US. With Square acting as a custodial wallet—you can’t sell BTC for fiat in Square– and a possible hub, merchants will easily receive their BTC and because LN can process billions of transactions a second, more will be incentivized to join spurring adoption.
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