Bitcoin will overtake the dollar in importance as it becomes the single global currency of the internet within a decade, Jack Dorsey, one of Silicon Valley’s leading entrepreneurs, has said.
Despite recent weakness in the value of bitcoin and concerns that it cannot currently process transactions fast or cheaply enough to act as a currency, Mr Dorsey, who is chief executive of both Twitter and the payments company Square, believes that bitcoin will overcome these obstacles and will be used to buy everyday items such as coffee.
Bitcoin is the world’s most popular digital currency and the best-known application of blockchain technology. It exists only as strings of computer code in an immutable, distributed digital public ledger. Created nine years ago, it came to prominence last year as its value rocketed to $20,000, turning some of its early adopters into billionaires in months. Its popularity led to an explosion of rival cryptocurrencies.
In November, Square said it would enable users in America to buy and sell bitcoin on its Cash app. Bitcoin’s value has dropped sharply since then amid fears of a regulatory clampdown and warnings of a bubble. Yesterday it was trading at $8,803.
Mr Dorsey insisted that virtual currencies built using distributed ledgers would be the next big breakthrough decentralising technology.
“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”.
As bitcoin became more widely used, it was up to payment processing companies such as Square to make sure it was widely accepted, he added.
Mr Dorsey is a bitcoin investor himself and this week was revealed as a funder of a start-up called Lightning Labs, which specialises in a technology that can potentially make bitcoin cheaper and faster to use. His comments highlight a debate among bitcoin enthusiasts about how best to transform it from a store of value into a means of quick and easy payments. Mr Dorsey accepted that bitcoin “does not have the capabilities right now to become an effective currency”.
“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,” he said.
The entrepreneur is in London this week to promote Square and declined to answer questions about Twitter. He co-founded Square as a mobile payments company in the US in 2009 and brought it to the UK last year. It is known for its small white credit and debit card readers that plug into smartphones and tablets. It offers next-day settlements to merchants in competition with the legacy card payment firms such as WorldPay and Barclaycard and rival start-ups such as iZettle.
Square is launching an instant deposit service. Merchants can use it to get funds into their bank accounts about 20 minutes after a transaction.
Mr Dorsey said that cashflow was a huge issue for small businesses and the ability to get paid instantly was crucial in enabling many of them to restock.
Source: The Times