This week, as he endured a bitter hearing before the US House Financial Services Committee, it felt as though Zuckerberg’s cryptocurrency project Libra was on trial. As they did in July, lawmakers railed against Libra, worrying it could facilitate money laundering and terrorist financing. They questioned Facebook’s CEO about his company’s unchecked expansion and expressed fears that Libra could threaten the US dollar.
But while Zuckerberg endured another public humiliation, he demonstrated exactly what not to do for companies contemplating a crypto strategy. Creating private money (like Libra) is not the answer. The CEO of another social network realizes that.
Although he’s also pursuing a crypto future, Jack Dorsey, CEO of both Twitter and Square, hasn’t absorbed a beating. He’s actually been celebrated by the open-source software community. That’s because, unlike Facebook, he’s not reinventing the wheel and trying to profit off it.
Rather than propose a new digital currency as the savior of the financial system, Square has embraced what already exists: bitcoin. Over the last year, the company has hired a team to contribute to the original cryptocurrency through Square Crypto. And while they’re technically employed by Square, these engineers are working on bitcoin virtually as a public service. Square Crypto is focusing on perhaps less thrilling but critical issues like code reviews, ensuring that GitHub contributions are free from performance and security bugs. They’re thinking about how to make the open financial system—the heart of bitcoin—work for everyone, not just a club of corporate elites. Dorsey believes that money ought to be free-flowing, much like the internet itself, he said in a June interview with TheNextWeb:
An internet company can launch something and it’s available around the world. Whereas with payments, you have to go to each market and pay attention to regulators. You need a partnership with a local bank. This is a very slow process in any new market. The Internet having a native currency will enable us (Square) to be more like an Internet company.
It’s not surprising that Facebook doesn’t get this. Everything you do on the social media website—every click, every like, every poke—is supposed to enrich the company’s shareholders. Today, Mark Zuckerberg is the fifth-richest person in the world. (And I’m guessing, he’d probably like to stay there, if not move up.)
Given that he is also a billionaire, it’s perhaps surprising that Dorsey is different, that he has the open-mindedness to bet on bitcoin, which realistically, he has no control over. He seems to envision a future where Square and bitcoin can coexist, even thrive together.
“The creation of [bitcoin] was very pure, and focused on a public good, rather than any other particular agenda,” Dorsey told Quartz in June. “The fact that it’s meant to be deflationary, meant to incentivize savings instead of spending, I think is a net positive for the world and how we think about consuming. Because it is a scarce resource, it has a probability of always increasing in value, which makes you consider a lot more how you spend it.”
So how does Jack view Libra? He offered his perspective yesterday (Oct. 24) at the Twitter News Summit:
Indeed, if Mark Zuckerberg—or the members of the Libra Association (past or present)—actually want to make a difference, they’d probably be better off following Square’s lead. Dorsey can point them in the right direction.