Square has grown to be the payment processor with the closest ties to cryptocurrencies. Founded by Twitter CEO Jack Dorsey, Square has provided support for cryptocurrencies for years. With the company enjoying dividends from its crypto support, it has continued to expand its involvement in the industry - especially with Dorsey at the helm.
One of the most interesting developments coming from Square is the development of a hardware Bitcoin wallet for users.
The Need for Assisted Self-Custody
Dorsey announced this new product in early July, explaining in a tweet that the payment processor had started working on it. The billionaire first teased the possibility of Square launching a Bitcoin wallet back in June, explaining on Twitter that the wallet will be an open-source product that Square and Bitcoin community members will develop.
Speaking on his rationale for his Bitcoin hardware wallet, Dorsey explained in a Twitter thread that self-custody remains the best and most secure way to hold crypto. The billionaire added that for all its benefits, self-custody remains a challenge for many investors. So, it is important to create an app that offers a seamless user experience for people.
As Dorsey explained, assisted self-custody is the best way to simplify the user experience and make it easier for crypto holders to manage their wallets.
“Custody doesn’t have to be all-or-nothing. We can probably simplify custody through 'assisted self-custody.' Assisted requires great product design: minimal setup time, relying on existing devices, and end-to-end reliability,” Dorsey explained.
The Square CEO also pointed out that the hardware wallet will incorporate several other features that will make it easier for new crypto holders to use the assets. One of them is layer-2 - a network that operates atop an existing blockchain and helps the latter to improve efficiency and scalability.
Time to Act for Square
Dorsey’s tweet earlier this month confirmed that Square is already on the project. He will spearhead the project with Jesse Dorogusker, the hardware lead at Square. Speaking on the project, Dorogusker explained that Square is looking to make Bitcoin custody more mainstream. He added that the company has several questions and issues to deal with, but that a direction for the project will be key.
Custody has become one of the most critical areas of use in crypto for the past few years. While it is convenient to leave your coins with an exchange, experts recommend that holding your coins is better. Hardware wallets are perhaps the most secure wallets, as they help you to hold your assets on external devices that are left offline.
But, average users still have problems with using these wallets. By bridging the gap between security and ease of use, Square could be able to tap into a significant market.
The Next Focus of DeFi
Even with the hardware wallet on its way, Square continues its commitment to crypto in a massive way. Earlier this week, Dorsey announced that the company will launch a new division that will focus on building decentralized finance (DeFi) services that will run on the Bitcoin network.
Ever since it grew into the limelight, DeFi has been criticized for being too reliant on the Ethereum blockchain. Most protocols are built and launched on the blockchain, and this has led to a congestion of the network. Several blockchains have tried to steal this crown, but Ethereum remains dominant.
Now, Square is looking to change that. The company hopes that the Bitcoin blockchain will become compatible with DeFi, increasing its allure even more. As Dorsey explained, the new DeFi division will be an “open developer platform” that will make it easier to create permissionless, non-custodial, and decentralized financial services.
The billionaire named Mike Brock, an engineer at Square, will lead the project. Brock previously led a development team that integrated Bitcoin features for Square’s Cash App. he was instrumental in turning Square into the Bitcoin powerhouse that it is at the moment.
DeFi is expected to be more vibrant as the market looks to regain its bounce. If developers can now build on the Bitcoin network, it would be interesting to see if its blockchain can lure more of them from Ethereum than any of the other names that have tried.