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Jack Dorsey says Square will launch bitcoin DeFi platform

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Jack Dorsey on Thursday put his mobile payment company Square at the center of one of the most talked about innovation areas in finance and announced that it would create a platform for developers to create “decentralized finance” projects based on Bitcoin.

In a Twitter thread, Dorsey said Square was planning to start a “new company” with the “aim of simplifying the creation of non-liability, license-free and decentralized financial services,” in one of the company’s first major projects. would be of its kind in the emerging market.

Decentralized Finance, or DeFi, is the name given to the growing number of cryptocurrency projects that seek to build an interlocking financial system based on cryptocurrencies that excludes traditional middlemen.

Proponents say it will provide new access to financial services ranging from lending and trading to insurance and savings products.

Dorsey, CEO of Square and Twitter, said Square has “some ideas around the first platform primitives we want to build.”

However, it is unclear what exactly the company would offer potential developers or how it could be monetized. Let it be TBD until a name is chosen.

“We’ll do it completely openly. Open Roadmap, Open Development, and Open Source, ”Dorsey said, adding that Mike Brock, a manager who worked on Square’s foray into cryptocurrency, would lead the platform.

Private investors have backed more than 70 DeFi companies this year, and while the area remains small, its value has soared along with the cryptocurrency bull market. Net worth in DeFi products has grown from about $ 2 billion a year ago to more than $ 55 billion today, according to DeFi Pulse.

The space has also caught the attention of regulators, who have raised concerns about the safety and accountability of projects, as well as the potential for fraud. Dan Berkovitz, commissioner for the US Commodity Futures Trading Commission, has claimed that many DeFi apps could be illegal.

Many DeFi projects are built on top of the Ethereum blockchain because it makes it easy to create smart contracts – essentially computer code that is automatically triggered when certain conditions are met. However, Dorsey said the platform’s “primary focus” would be on Bitcoin, the oldest and most popular blockchain.

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The Bitcoin blockchain has historically been considered slower and less efficient than its counterpart in Ethereum. However, in November it will receive its first major upgrade in several years, known as Taproot, which will make it easier to create smart contracts on top of the log.

Square was founded in 2009 and started out as a digital payments company, but Dorsey has signaled far-reaching ambitions for the group. Earlier this year, the company acquired a controlling stake in Tidal, Jay-Z’s ailing streaming platform, for $ 297 million, making an unexpected entry into the music industry and putting the rapper on the Square board.

TBD would be the latest in a series of cryptocurrency bets placed by Dorsey, a passionate bitcoin advocate. Square’s revenue more than doubled in 2020, in part due to a surge in Bitcoin-related transactions made through its Cash app, its peer-to-peer mobile payment option.

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Cryptocurrency

Cryptocurrency may be tender of choice in future, but is risky investment now | Opinion

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Cryptocurrency is taking the nation by storm, with digital currency attracting the attention of large companies and meme traders trading based on popular internet trends. Some financial advisors advise their clients to buy in, while others are not as optimistic.

Although crypto is likely to grow in importance in the future, it currently remains a risky investment as it is too unstable and overshadowed by many uncertainties.

Crypto was developed as a payment method that can bypass traditional banking systems. New crypto is created through mining, a process by which computers solve difficult math problems. There are thousands of flavors of crypto, but Bitcoin is dominant, taking almost half of the market share.

One problem with cryptocurrency is that certain coins are available indefinitely, which means that an infinite amount of crypto could be mined at infinite time. This has led to inflation in the crypto markets, which can also happen with physical currency.

This problem alone is not enough to warrant a hold or sell rating, but what is even more worrying is that cryptocurrencies are being propelled by meme trading. This trading style is named after an online community of merchants who have gathered around “stonks” like GameStop and AMC Entertainment Holdings who have supported low-value companies through the Reddit site r / wallstreetbets.

When meme traders focus on one company, they are quick to invest to drive the stock price higher. Then, when the stock appears to have peaked, investors quickly sell their holdings in a process known as “pump and dump”. This type of trading is detrimental to the markets and can result in significant losses for both large companies and individual traders. Crypto has become a preferred investment for meme traders, making it riskier and less reliable.

Another factor to consider before investing is how quickly crypto values ​​can go up and down. When Elon Musk tweeted about the Dogecoin cryptocurrency, the price fluctuated sharply. This is a bad sign for cryptocurrency coins because if negative news got out about them, their prices could go down and the investment would be lost.

Some companies are optimistic about crypto as an investment, including the El Salvador government, which introduced Bitcoin as its national currency. The move showed that cryptocurrencies are likely to be widely used in the future, but it also highlighted some of the risks associated with investing at this early stage.

When El Salvador started using Bitcoin, the government had to take its e-wallet offline for several hours when the server was overloaded, which revealed a bug in the system. Crypto is only good if it can be used, and if the servers are overloaded it cannot be used. In the future, this problem could be resolved, but until then, crypto is still an unreliable and dangerous investment.

Another major problem with crypto platforms was uncovered when they mistakenly gave users nearly $ 90 million worth of various crypto coins during a routine update in late September. The error was caused by a bug in the computer code and prompted the workers to recover the lost coins.

Both incidents show that this technology is too new and unreliable to be a safe investment. There are thousands of other investment options with far less risk and almost the same return, including stocks and options.

For now, investors should stay away from crypto, but it will become a viable investment in the future. Technology is improving rapidly and culture is changing. One day cash may be a thing of the past and crypto may be the king of currencies, but that day is not here yet.

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Bitcoin price: cryptocurrency scams rort Aussies out of $328 million

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Bitcoin is booming again, and thousands of Australians are investing in hopes of making a fortune – but that one factor has caused losses of more than $ 328 million.

If you are careful, bitcoin is everywhere. It’s on the news, on TV, and flooded our social feeds.

And why shouldn’t it be? Bitcoin is widely regarded as the king of cryptocurrencies, accounting for about half of the market capitalization of all cryptocurrencies available worldwide.

The fact that few people really understand how Bitcoin works and what drives its value means that it is ripe for scammers and scammers.

In 2020, Bitcoin investment scams caused losses worth a staggering $ 328 million from Australians alone – and they’re just what we know of.

Despite the fact that almost one in five Australians own some type of cryptocurrency, there is no formal regulation of crypto trading in Australia, so it is important to do some research before committing.

“Anyone can accept Bitcoin payments from anyone, anywhere in the world, anytime. This opens up amazing opportunities for investors, but is also fertile ground for scammers, ”says Adrian Prezlozny, CEO of Independent Reserve, one of Australia’s largest cryptocurrency exchanges.

“As with any financial product, it pays to take the time to protect yourself and your investment. The best way to do this is to know what to avoid and who to trust.

“The most important thing is that you are not guaranteed to get rich quick just because Bitcoin is a digital currency. There is no such thing as free money – if the offer sounds too good to be true, it generally is, ”he says.

How to spot a Bitcoin scam

There are many types of cryptocurrency scams – what to look for and what to avoid.

• Ponzi or pyramid schemes: often sounds tempting because they promise you a regular return. You may be told that money is generated through Bitcoin trading activity, but in reality there is no real investment.

• Bitcoin Flipping: Usually involves the claim that if you pay an initial startup fee to exchange bitcoins for money, you’ll double your money overnight. If it sounds too good to be true, it is.

• Offshore Broker / Investment Sites: Cryptocurrency is a volatile asset. Companies that promise big returns on a small, low risk deposit are lying. As simple as that.

• Large Account Unlock: After an initial investment, scam sites can show you a large amount of credit that they have accrued by “investing” or “trading” your deposit. They will then give you reasons to deposit more money before they can “release” your money.

• Anydesk: A broker or consultant who asks you to install screen sharing software, particularly Any Desk, is almost certainly a scam. It doesn’t require a real company to see your desktop screen. It’s usually a trick to get your account information.

• Blockchain Scam: Do not trust anyone who claims to have “found” a large amount of cryptocurrency that is yours on the blockchain. They usually charge a “release fee” to withdraw your funds, but you can guarantee they will walk away with your money.

• Recovery Services: Cryptocurrency transfers cannot be reversed. Any recovery service that asks for money upfront is almost certainly a scam and should be avoided.

Protect yourself and your investment

“The best way to protect yourself and your investment is to choose an established online trading platform that you can trust,” says Adrian.

“A reputable exchange should be able to easily answer your questions about managing your trades and storing your bitcoins. It’s important to ask about things like security, data integrity, cold storage, fees, consumer protection, and available coins.

“A crypto exchange with a solid track record that many customers trust and that has the right checks and balances is your safest bet,” he says.

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Economics Professor Warns ‘Cryptocurrencies May Contribute to Monetary and Financial Instability’ – Economics Bitcoin News

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Cornell University economics professor and former head of the IMF’s China division, Eswar Prasad, warned that “cryptocurrencies can contribute to monetary and financial instability.” He added that if the industry is not regulated and there is no investor protection, then the risk is compounded.

Economist sees crypto as a risk to financial stability

Eswar Prasad, Nandlal P. Tolani Senior Professor of Trade Policy and Professor of Economics at the Charles H. Dyson School of Applied Economics and Management at Cornell University, shared his opinion on cryptocurrency in an interview with CNBC published on Wednesday.

Prasad is also a Senior Fellow at the Brookings Institution, where he holds the New Century Chair in International Economics, and a research fellow at the National Bureau of Economic Research. Previously, he was Head of Financial Studies in the Research Division of the International Monetary Fund (IMF) and Head of the China Division of the IMF.

He said:

Cryptocurrencies can contribute to monetary and financial instability, especially if they spawned a large and unregulated financial system that lacks investor protection.

His statement echoes a report recently released by the IMF warning that the rising popularity of cryptocurrency could pose a threat to financial stability. In addition, Bank of England Deputy Governor Jon Cunliffe said this week that regulation is urgently needed as the crypto industry is growing rapidly and there are some “very good reasons” to believe it poses risks to the country’s finances could represent stability in the future, even if the risks are currently limited.

Professor Prasad was also asked how cryptocurrencies could increase economic inequality. “Cryptocurrencies and their underlying technology promise to democratize finance by making digital payments and other financial products and services easily accessible to the masses,” he replied. “But with existing inequalities in digital access and financial literacy, they could end up worsening the inequality.”

In addition, he emphasized that “all financial risks resulting from investing in cryptocurrencies and related products could ultimately fall particularly heavily on naive private investors”.

The Cornell Professor of Economics also discussed central bank digital currencies (CBDCs), stating:

I think central bank digital currencies are the way of the future. But every central bank will want to make sure that their money is not used for illegal purposes so that transactions are verifiable and traceable.

However, Prasad noted that “if every payment you make, even for a cup of coffee or a sandwich, can be viewed by a government agency, it is an uncomfortable proposition.” The economist concluded, “In a more dystopian world, you could Let the government decide what kind of goods and services their money can be used for. “

Do you agree with the economics professor? Let us know in the comment section below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation to make an offer to buy or sell, or a recommendation or endorsement of any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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