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Will Bisq Be Part Of Jack Dorsey’s Bitcoin DEX Project? Here’s The 411

As NewsBTC informed, Square will develop a Bitcoin-only Decentralized Exchange. However, will they work in conjunction with Bisq, the “peer-to-peer trading network”? Jack Dorsey seemed to confirm that both organizations are going to start talking at the very least. Why does this matter? What makes Bisq special? Keep reading to find out.

Related Reading | Why Square Will Create New Bitcoin-Focused Company, According To CEO Jack Dorsey

The Tweets That Point To Bisq

Def! Cc:@brockm

— jack⚡️ (@jack) August 27, 2021

Bisq answered that tweet with which Dorsey announced that his company’s TBD project would be to “build an open platform to create a decentralized exchange for Bitcoin.” The Bisq people claimed that they’ve been building their product “to be the go-to peer-to-peer DEX for bitcoin power-users.”Then, they offered collaboration, “Our heads together could result in something better than any of us could imagine.” 

Dorsey answered “Def!” and copied Mike Brock, leader of the TBD project.

That exchange doesn’t guarantee anything, sure. But the organizations will meet, and they seem to share a lot philosophically speaking. The Bitcoin community, for its part, reacted under Jack’s tweet with a lot of “This is the way,” exciting .gifs, and Bisq praise.

BTC price chart for 08/29/2021 on Coinbase | Source: BTC/USD on TradingView.com
Why Will Dorsey’s DEX Be Bitcoin-Only?

In NewsBTC’s announcement of Square’s Decentralized Exchange project, we quoted:

Jack Dorsey’s tweet quoted an extensive thread by Square executive Mike Brock, TBD project head, who outlined the potential development paths for the open-source DEX.

“We believe Bitcoin will be the native currency of the internet. While there are many projects that will help make the internet more decentralized, our focus is solely on a sound global monetary system for all. But including all requires a few pieces we think we are missing.” Brock said in one of his tweets.

This is in tune with ideas expressed by Dorsey himself.

The reason I have so much passion for #Bitcoin is largely because of the model it demonstrates: a foundational internet technology that is not controlled or influenced by any single individual or entity. This is what the internet wants to be, and over time, more of it will be.

— jack⚡️ (@jack) January 14, 2021

After all, Square created the Bitcoin-focused TBD “with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services.”

Square is creating a new business (joining Seller, Cash App, & Tidal) focused on building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services. Our primary focus is #Bitcoin. Its name is TBD.

— jack⚡️ (@jack) July 15, 2021

Everything That Makes Bisq Special

A couple of years ago, Manfred Karrer, Bisq co-founder, spoke to CoinDesk.”The goal is to become as decentralized and censorship-resistant as bitcoin. That’s a very high goal and it took bitcoin a very long time to get there,” he said. On Bisq’s site, they claim that “Bisq is code, not a company.” And said software is “open-source and community-driven.” What else makes Bisq special? Well…

Related Reading | Running Bitcoin: Passing The Torch From Hal Finney To Jack Dorsey

  • First of all, “It’s software you run on your own hardware, which connects to other people running the Bisq software to facilitate trades.” Sort of like how torrents work.
  • Bisq does not hold Bitcoin or any national currency. All the deals are between “the trading peers themselves.” And Bisq only has minimal information about either of them. Also, “no data is stored on who trades with whom.”
  • And speaking about privacy. “All Bisq data is transferred over its own secure peer-to-peer network, which is built on top of the Tor network—no central servers.”
  • The service doesn’t require registration.
  • To grease the wheels, “Both traders are required to pay security deposits, which are refunded after trades are completed.”
  • Bisq doesn’t accept Paypal or credit cards because chargebacks are too easy.
  • Bisq eliminates “the need for trusted third party exchange services.”
  • The Bisq network “is fully peer-to-peer in that it requires no centrally-controlled servers and has no single points of failure.”

However, you should also know that someone hacked Bisq that one time, stealing $250K.

Featured Image by Jeremy Zero on Unsplash – Charts by TradingView

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Jack Dorsey Plans to Build A Decentralized Exchange For Bitcoin

It is no secret that Twitter and Square CEO, Jack Dorsey, has been a crypto enthusiast for quite some time. The people who follow him on Twitter are no strangers to this, so it really is no surprise to hear another Dorsey-Bitcoin news.

In July, Jack Dorsey announced the emergence of a Bitcoin-Focused Business Division at Square (TBD) that was “focused on building an open developer platform with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services.”

Developing An Open-Platform Bitcoin-Focused DEX 

Now Jack Dorsey and Square have taken it a step further. Square’s new TBD division is developing a Bitcoin-centric Decentralized Exchange (DEX). The platform will be accessible and open-source, yet users will be able to fund their wallets with fiat currency.

Related Reading | Why Square Will Create New Bitcoin-Focused Company, According To CEO Jack Dorsey

“We’ve determined @TDB54566975’s direction: help us build an open platform to create a decentralized exchange for #Bitcoin” Dorsey tweeted.

DEXs don’t have a centralized intermediary that oversees the token swaps. A decentralized exchange does not maintain an order book like a centralized exchange, which typically facilitates trades between users by posting individual buy and sell orders. Users exchange tokens directly with each other, unlike other exchanges. Additionally, fiat currency cannot be used in a DEX, which lacks access to traditional financial institutions and has no know-your-customer compliance procedures.

BTC price falls below $49K | Source: BTCUSD on TradingView.com

Jack Dorsey’s tweet quoted an extensive thread by Square executive Mike Brock, TBD project head, who outlined the potential development paths for the open-source DEX.

“We believe Bitcoin will be the native currency of the internet. While there are many projects that will help make the internet more decentralized, our focus is solely on a sound global monetary system for all. But including all requires a few pieces we think we are missing.” Brock said in one of his tweets.

The Future Of Square’s TBD

Mike Brock revealed that TBD is planning to make it easier for people all around the world to fund a bitcoin wallet that is not custodial via a platform that enables them to create on-and-off ramps into bitcoin. He said to think about it as a “decentralize exchange for fiat”.

As he acknowledged, there are many gaps to be filled, and the TBD team may not be able to resolve all of the problems alone without using the help of other blockchains. “The gaps needed to build this may be too large, which would also have us consider other chains as a bridge,” he wrote.

Related Reading | This is why all companies should buy Bitcoin, says Square’s CFO

“Some of the gaps we currently see around cost and scalability. Lightning is solved with payments. We need a solution for exchange infrastructure between digital assets, like stablecoins” He added.

While there are no specific dates in his communication, Brock has promised to provide frequent updates as this project progresses.

Featured image from Kelscrypto, Chart from TradingView.com

 

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Ethereum Creator Vitalik Buterin Censures Facebook And Twitter’s Crypto Plans

Vitalik Buterin, creator of Ethereum commented through Bloomberg on Square and Facebook’s blockchain efforts.

Recall that Jack Dorsey, CEO of Twitter and Square, revealed his plans for a DeFi platform based on Bitcoin in July. He said the platform would be a competitor to Ethereum.

Reacting to Dorsey’s announcement, Buterin stated his skepticism for the Square’s anticipated DeFi plans. His major reason was the dependence of the firm on Bitcoin.

Buterin explained that Ethereum’s smart contracts and native functions work like ‘lockboxes.’ With such operations, DeFi investment terms can’t be broken. Also, there’ll be no requirement holding of a user’s funds by the DeFi service.

Buterin analyzed the possibility of Square controlling user’s funds via multi-sig wallets that belong to different participants.

Furthermore, he said that Square’s CEO will build his personal system that will implement those rules. Buterin confirms that though the plan is similar to Ethereum, the end will give a weaker trust project model.

Related Reading | South African Man Loses $900,000 Worth Of Bitcoin After Accidentally Deleting Keys

Also, Buterin aired his view concerning Facebook’s project of Diem cryptocurrency. He stated that Mark Zuckerberg, the CEO, and founder of Facebook, is experimenting on the future. He further added that Facebook CEO is probing for the upcoming stage of the Internet in advance of the superannuation of Facebook.

By acknowledging Diem’s old identity of Libra, Buterin advised Facebook’s decision for a project naming “Rebirth of dead ends.”

Ethereum Founder Lashes At Facebook

Ethereum’s founder mentioned that Facebook has mistrust from many people as its major problem. He said the company still failed in its attempts to regain trust through the use of a Diem blockchain conglomerate. He revealed that several old members of Diem, like MasterCard, Visa, and PayPal, have also exited the group in 2019.

The project is still officially operational despite Buterin’s unfavorable disposition to Diem and its sluggish rollout. The company confirms its proposals of launching as of May.

There are still proposals on the possibility of building community-owned successors to Twitter and Facebook blockchain. Buterin comments that multiple projects are already attempting to do so. Furthermore, he revealed that most of these projects are Ethereum-based. However, it could be a threat as well as an opportunity.

The green candle blowing on the chart shows Ethereum is back in bullish momentum | Source: ETHUSD on TradingView

Aave has one of the recent attempts of a social network based on the Ethereum blockchain. The proposal came in July and it’s for a Twitter competitor. This proposal was a response to Jack’s plans of building a platform for DeFi on Bitcoin.

Related Reading | American Rapper Tyga To Launch OnlyFans Crypto-Competitor

In the conclusion of his interview, Buterin highlighted some topics such as the transition to and scalability of Ethereum 2.0. Also, he mentioned the regulatory enforcement as well as decentralized finance projects in the ecosystem.

Featured image from Cointribune.com, chart from TradingView.com

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How Big Is Bitcoin’s Lightning Network? The Answer Will Surprise You

The Lightning Network is one of the most bullish developments that the Bitcoin ecosystem has seen so far. And all the available metrics point up, a healthy and vibrant network is brewing. However, investor Kevin Rooke took a deeper look and found out that the Lightning Network is probably even bigger than previously thought. “Inaccurate comparisons and privacy preserving features make it hard to truly understand how big the Lightning Network is.”

Related Reading | Bitcoin Lightning Network Reaches Record Capacity

What does Rooke mean by that? Let’s find out.

The Lightning Network By The Numbers

A casual look at popular analytics platform 1ml tells us that, at the time of writing, The Lightning Network is composed of 24,688 nodes, 64,577 channels, and the network capacity is 2,272.89 BTC. All of those numbers are up. However, “The Lightning Network is not a borrowing protocol, an AMM, or a store of value. Furthermore, the idea that Bitcoin is “locked” on the Lightning Network is misleading at best.”

There are a number of DeFi protocols that have a much higher number of BTC “locked,” and people mistakenly compare that number to the Lightning Network ‘s capacity. In DeFi, usually, the funds are in fact locked and can’t be touched until the contract in question runs its course. In Lightning, things are quite different: 

As explained in the book Mastering the Lightning Network, funds that are added to the Lightning Network are not locked, they are unleashed. As soon as a new Lightning channel is opened, those funds can be sent anywhere on the Lightning Network in an instant, and for almost no cost.

And speaking about channels, Kevin Rooke talked about them in an “investor letter” dated June 28th:

There are currently over 51,800 channels routing payments between 22,000 nodes, and 21% of those Lightning Network channels were created in the last 30 days.

On the surface, 21% monthly channel growth seems impressive, but new channel creation is a slightly misleading metric as nodes frequently open and close new channels.

A more accurate measure of growth is that the total number of channels on the Lightning Network is up by 10.8%, or over 5,000 channels in the last month.

Compare that to the more recent number that we gave you at the beginning of the section and note how the number of channels grew in just a month and a half. That’s not all, take into account that:

Some nodes don’t want their channels to be included in the public Lightning Network graph, and instead choose to open ‘unadvertised’ or ‘private’ channels.

BTC price chart for 08/13/2021 on FTX | Source: BTC/USD on TradingView.com
Privacy Doesn’t Let Us See How Much Money Goes Through Lightning

Most of the transactions that take place inside the Lightning Network are private. Only at the time of settlement between two parties are the final numbers forever registered into the Bitcoin blockchain. That means it’s impossible to know exactly how much money is going through Lightning on any given day. Or in total. 

Related Reading | Bitcoin Community Celebrates as Crucial Lightning Network Project Launches

However, Rooke estimates that “annual on-chain volume is almost 6x higher than the value locked into the Bitcoin network, despite the relatively high transaction fees and slow block times that make payments cumbersome.” That’s on the main Bitcoin chain. 

The Lightning Network is designed for making fast and inexpensive payments, so if $85 million of Bitcoin is already on the Lightning Network, it would make sense for annual payment volume to be at least 6x higher, or at least $510M.

That’s a bare minimum. And things are just getting started. In September, El Salvador’s Bitcoin Law goes into effect and the whole country will start using the Lightning Network. And take into account that roughly a quarter of El Salvador’s GDP comes from remittances, so it’s not a stretch to think that Salvadoreans all over the world will start using it as well. Add to that Jack Dorsey’s projects, both Square and Twitter are looking into Lightning integration.

In fact, Dorsey published this tweet yesterday:

Agreed.

Every account on Twitter being able to link to a Lightning wallet however…

— jack⚡️ (@jack) August 12, 2021

And this is just the tip of the iceberg. For more impressive numbers and deductions, be sure to read “The Lightning Network Is Bigger Than You Think.”

Featured Image by Anuraj SL from Pixabay – Charts by TradingView

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Square’s Cash App Reports $2.7B In Quarterly Bitcoin Revenue, A 200% Jump

Square has had a busy weekend. The company made headlines for it’s purchase of Australia-based fintech firm, Afterpay, in an all-stock deal. Square then went on to release it’s Q2 2021 Shareholder Letter, filled to the brim with company insights – including some strong growth numbers in crypto transactions on Square’s mobile product, Cash App.

Breaking Down The Numbers

Square’s gross profit in Q2 was a healthy $546M, reflecting a 91% increase year-over-year. Bitcoin gross profit on Cash App specifically accounted for roughly 10% that, coming in at around $55M; this reflected a substantial increase from the $17M in bitcoin gross revenues that the company saw in Q2 last year.

Bitcoin yearly revenue saw exceptional jumps as well, rising over 200% to ring in $2.72B. This time last year that number was at $875M. While some may call out the relatively thin margin of gross profit relative to revenues, Square maintains that driving company profits from bitcoin transactions are clearly low-priority. Bitcoin gross profits reflected only roughly 2% of bitcoin revenues for Cash App in Q2.

In fact, the company explicitly calls out net revenues exclusive of bitcoin transactions. According to the shareholder report, Square deducts bitcoin revenue because their “role is to facilitate customers’ access to bitcoin.” The company is seemingly playing the “long game” with crypto, encouraging accessibility and minimizing fees.

Square has seen substantial growth and with new acquisitions, looks primed for future fintech disruption. | Source: NYSE: SQ on TradingView.com

Related Reading | TA: Bitcoin Corrects Gains, Why BTC Must Could Extend Losses

It’s Not All Green Days

Despite substantial growth from the reported numbers year-over-year, bitcoin’s price has seen declines relative to the first quarter of the year. As such, both bitcoin revenue and gross profit from bitcoin for Cash App saw declines relative to Q1 2021 – as Cash App only charges a small margin on the market cost of bitcoin.

Accordingly, the letter notes that bitcoin price volatility in the quarters ahead, along with changes in customer demand, will likely continue to impact Cash App profits and revenues from crypto.

Additionally, Square has purchased $220M worth of bitcoin between Q4 2020 and Q1 2021. Because bitcoin is considered an “indefinite-lived intangible asset”, the company recognized a $45M impairment loss on the quarter on the firm’s bitcoin investment.

In all, Cash App’s continued success beyond bitcoin will likely bode well for the company’s crypto engagement, too. Cash App revenue excluding bitcoin in Q2 came in at around $600M – an increase of 87% year-over-year. Square’s broader Q2 numbers showed strong growth as well, with the quarter being the second-best in the past 5 quarters with regards to net income.

There is clearly more growth on the horizon when it comes to Jack Dorsey-led Square.

Related Reading | Bear Market Over? Why Bitcoin Could Soar TO $45K As Strong Holders Grow

Featured image from Pixabay, Charts from TradingView.com