Twitter cofounder Jack Dorsey pontificated recently about Bitcoin in The Times (London), stating that it will become the world’s single currency within the next ten years . (This comes as his current company, Square, is rolling out Bitcoin services—so take that for what it is worth.)
“The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be bitcoin,” he told The Times. This would happen “probably over ten years, but it could go faster”. (from )
Recall that Dorsey is one of the crew of the “clown car that fell into a gold mine”, (per Mark Zuckerberg quoted in ). He is famous for helping boot up Twitter, which has gazillions of users but has lost bazillions of dollars. Twitter is a solution to a problem that never existed, and has created massive problems of its own. So Dorsey is not exactly the most credible oracle in my eyes.
Anyway, in this case, Dorsey’s prediction about Bitcoin is almost certainly wrong.
For one thing, the entire concept of “single global currency” is murky and undefined. Even the more limited version, “single currency of the internet” is pretty much undefined. I suspect that Dorsey is saying that digital systems like Square will use Bitcoin or something like it, at least behind the scenes. But that isn’t even close to what a “global currency” would be.
He acknowledges that Bitcoin today sucks and isn’t even remotely close to the scale needed for such a role. He is reported as saying that these scaling problems will be solved Real Soon Now.
“It’s slow and it’s costly, but as more and more people have it, those things go away. There are newer technologies that build off of blockchain and make it more approachable,” (from )
Of course, there is no such technical solution on the horizon, and the governance process of cryptocurrencies has proved to be fatally unworkable. How anyone can be confident about Bitcoin’s technical future is beyond me.
In addition, many of the technical improvements that might make Bitcoin actually scale up actually involve major changes to the design. Just what Dorsey might be thinking of, we don’t know, but it is arguably not “Bitcoin” as we know it now.
It seems clear that one thing Dorsey is thinking of is using something like Square to make payments in Bitcoin. Maybe that will work, though it hasn’t happened yet, because, well, Bitcoin sucks in this use case. But it is important to note that if Square does make this work, it will involve a ton of infrastructure beyond Bitcoin itself. And users will barely know they are using Bitcoin, if they know at all.
And, of course, Square isn’t decentralized, nor is it anonymous. So it’s not clear what the advantage of paying via Bitcoin versus some other currency would be.
Essentially, Dorsey is predicting that something might become a global currency, and maybe it will have the same name as Bitcoin. And he’s really thinking about it within the context of something like Square, which is only about 1% Bitcoin, and 99% other technology.
Dorsey also ignores lethal threats that could bring all cryptocurrencies crashing down.
There are many, many real world legal challenges that would have to be overcome. Regardless of supposed global extend of Bitcoin, local regulations and laws apply everywhere. (He knows this very well, I’m sure.)
There are many vulnerabilities to Bitcoin’s technology, including physical threat and financial shenanigans, and also volatile exchange rates. Also, the Nakamotoan model for decentralized governance is proving unworkable, and certainly not something that you’d want to base the world’s economy on.
For that matter, it seems very possible that Quantum Cryptography will kill Bitcoin within the next decade. It could also kill Square and most of the internet. Yes, there may be ways to make BTC “quantum safe”, but they will change BTC beyond recognition. Worse, Quantum Cryptography might very well mean that the entire “legacy” blockchain can be deanonomized with who knows what impact.
In short, Dorsey’s prediction is shallow and wrong. It is also self-serving.
- Nick Bilton, Hatching Twitter: A True Story of Money, Power, Friendship, and Betrayal, New York, Penguin, 2013.
- Alexandra Frean, Bitcoin will become the world’s single currency, tech chief says, in The Times (London). p. 48, March 21, 2018: London.
Wolfie Zhao (2018) Bitcoin Will Be World’s ‘Single Currency’ Says Twitter CEO. Coindesk, https://www.coindesk.com/twitter-ceo-jack-dorsey-bitcoin-will-be-the-worlds-single-currency/