Square’s proposed hardware portfolio could be a game changer and a conduit for the adoption of Bitcoin and other cryptocurrencies.
On Friday, Square Director Jack Dorsey, who is also president and creator of Twitter, said his company is heavily evaluating options to build a Bitcoin hardware portfolio that will provide full control over the cryptocurrencies users own . Following Dorsey’s comments via a tweet, Square shares rose 2.7%, but ended up ending the day 1% higher compared to the day before, Thursday.
Bitcoin deals and transactions are now an important source of revenue for Square. The company offers consumers the opportunity to make cryptocurrency purchases through CashApp and even store them digitally. According to 2020 performance data, the company’s Bitcoin sales grew from $516 million in 2019 to end the year at $4.75 million by the end of 2020. Dorsey’s proposals seek to eliminate the third-party control aspect , including the Square.
Construction of the proposed portfolio
The new hardware will allow users to keep their digital coins securely and decide when to use them. Square, however, seems unsure about its deadlines. Dorsey suggested that if the project takes off, they will strive to ensure the entire process is transparent and inclusive, building it openly, which includes designing software and hardware while collaborating with the community.
Dorsey even took time to explain how the proposed product will differ from current alternatives, noting that most BTC buy exchanges probably have the best intentions when addressing security issues.
Challenges and disadvantages of current exchanges
Even with good intentions, circumstances reveal that custody is not controlled by the clients, which often functions as an “IOU”. He further noted that, considering how some exchanges operate, taking custody and increasing the security of your BTC is quite tricky.
A classic example is PayPal, which will allow you to buy BTC but keep control of the private key. The whole process works more like an IOU at the end of the day. In addition, PayPal prohibits moving Bitcoin to external wallets (for now).
Advantages of Square’s proposed hardware portfolio
Crypto hardware wallets have been around for some time, so the concept is not new. However, Square’s proposed hardware portfolio could be a game changer and a motivator for adoption. This is especially true when fintech companies such as Venmo have embraced blockchain technology willingly. A hardware portfolio would also make it easier for the average customer to learn Bitcoin in a user-friendly way. Dorsey said that once the project starts, Twitter and GitHub accounts focused on the project will be set up.