{"id":18732,"date":"2020-02-18T13:00:03","date_gmt":"2020-02-18T13:00:03","guid":{"rendered":"http:\/\/ci027cfe7190032697"},"modified":"2020-02-18T13:00:03","modified_gmt":"2020-02-18T13:00:03","slug":"for-square-crypto-the-way-to-bitcoin-mass-adoption-is-open-source","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/culture\/for-square-crypto-the-way-to-bitcoin-mass-adoption-is-open-source","title":{"rendered":"For Square Crypto, the Way to Bitcoin Mass Adoption Is Open Source"},"content":{"rendered":"
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When Jack Dorsey founded Square in February 2009, Bitcoin was all of one month old. In fact, Satoshi Nakamoto<\/a> and Dorsey were likely laying the groundwork for their respective creations concurrently in the year prior. Ten years later, the two would converge in what now seems like an inevitable collision. <\/p>\n

Square launched its Venmo-like payment service, Cash App, in 2013. The application features common stock investing, and in June 2019, it added bitcoin to the mix of assets you can purchase on the app.<\/p>\n

But a few months before this, in March 2019, Square established an additional business arm: Square Crypto. But don\u2019t let the general \u201ccrypto\u201d moniker fool you. This auxiliary venture\u2019s purpose? To work on Bitcoin-specific development full time.<\/p>\n

“Square is hiring 3\u20134 crypto engineers and 1 designer to work full-time on open source contributions to the bitcoin\/crypto ecosystem. Work from anywhere, report directly to me, and we can even pay you in bitcoin,” Dorsey tweeted<\/a> at the time.<\/p>\n

Its first hire was Steve Lee, a former Google project manager and a sometimes Bitcoin developer with a handful of commits to his name on GitHub<\/a>.<\/p>\n

This seminal hire would be followed by positions for prolific Core contributor Matt Corallo; Lightning Labs developer Valentine Wallace; Google software engineer Jeffrey Czyz; and Arik Sosman, a former architect behind Facebook\u2019s Calibra wallet for the libra digital currency<\/a>.<\/p>\n

Each of Square Crypto\u2019s hires have some experience developing Bitcoin and its adjacent technologies. Its Twitter account often tweets<\/a> out maximalist takes with a bullish tinge. The only link in its Twitter bio is to the Bitcoin white paper. And its bio, instead of some boilerplate message lauding its parent company Square to the world, reads \u201cBitcoin for all.\u201d<\/p>\n

That bio sums it up. Or as Lee put it while speaking with Bitcoin Magazine<\/em>,<\/em>\u201cWhat we aim to do is make bitcoin a widely-used global currency.\u201d<\/p>\n

The Square Commitment to Bitcoin: Open-Source Software and Noncustodial Solutions<\/h2>\n

With the exception of Corallo, Square Crypto\u2019s recently-outfitted team came from legacy tech companies. And most of these poached employees were Bitcoin tenderfoots \u2014 they may have had a little bit of experience coding Bitcoin but not as much as a veteran like Corallo.<\/p>\n

Learning the ins-and-outs of Bitcoin wasn\u2019t an issue. What could have been, however, was a lack of cohesion among the team. Most open-source developers (and Bitcoiners here being no exception) are used to a fair degree of autonomy; Corallo, for example, had been the recipient of grants for undirected work on Bitcoin Core before.<\/p>\n

But most of these hires were, as Lee put it, accustomed to working on focused projects while at their former FAANG employers.<\/p>\n

\u201cFrom the outset, we had to decide our model and approach and how we were going to organize the team,\u201d Lee said. \u201c[In] traditional companies you work as a team and focus on a project. In open source, that\u2019s not common, per se. Each individual contributor is ever independent and usually anonymous. We decided that we wanted to work as a team.\u201d<\/p>\n

And what would they be working on? Lee emphasized that the team is \u201cfocused on open source and the broader ecosystem,\u201d in particular noncustodial and key management solutions. <\/p>\n

\u201cWe feel like custodial solutions will be naturally invested in [by financial investors], but there is a long-term risk for Bitcoin when the user experience gap between custodial and non-custodial user experience will widen due to under-investment in non-custodial [solutions], because there\u2019s not a strong business model associated with that,\u201d Lee explained.<\/p>\n

Indeed, custodial options proliferate in the bitcoin market. According to figures estimated by Nic Carter based on Coin Metrics data<\/a>, roughly 4.4 million bitcoin are held on exchanges (this data, Coin Metrics cautions, is not exhaustive and is a lower-bound estimate. The figure Carter gave Bitcoin Magazine <\/em>includes bitcoin custodied by Coinbase, while the initial Coin Metrics data he drew from does not). This is nearly 25 percent of bitcoin\u2019s outstanding supply and more has entered custody more quickly than bitcoin\u2019s supply is inflated. <\/p>\n

For the average user, storing on an exchange or a hedge fund-like custodian is simpler than storing their private keys themselves. Lee\u2019s fear is that, if Bitcoin continues to catch fire, more bitcoin will fall into the hands of third-party guardians than today\u2019s figures. As exchange hacks<\/a> in the past have shown us, this makes Bitcoiners\u2019 holdings kindling for potential disaster.<\/p>\n

Lightning Development Kit<\/h2>\n

In order to ameliorate this perceived issue, Square Crypto\u2019s team has chosen an area of the ecosystem that features perhaps the most custodial solutions available: the Lightning Network.<\/p>\n

More abstruse and technically challenging than running Bitcoin Core, the Lightning Network requires a full node to run precisely as intended. Failing this, you can run a lightweight wallet with the Neutrino protocol or use a custodial wallet \u2014 typically, the latter option provides a less-frictioned user experience. <\/p>\n

\u201cLess-frictioned\u201d because the Lightning Network, exciting as it is, is still nascent and clunky. Announced at the end of January 2020, Square Crypto\u2019s Lightning Development Kit (LDK) is being designed to make it easier for developers to build on Lightning. In turn, this will hopefully improve the UX for Lightning\u2019s growing user base.<\/p>\n

For Square Crypto, it\u2019s a chance to make a big impact in one of the smaller sectors of the Bitcoin development economy. <\/p>\n

\u201cIt lets our relatively small team team have an outsized impact over most of the areas in Bitcoin that need to improve for it to be a widely used currency,\u201d Lee said. \u201cWe chose the LDK because that\u2019s the best way we can leverage our team. If we\u2019re successful, the LDK will lower the barrier to entry for a developer building on Bitcoin.\u201d<\/p>\n

When asked if Square\u2019s Cash App would integrate Lightning using the LDK, Lee emphasized that his team is \u201cindependent of Square.\u201d <\/p>\n

Of course, he would love to see Square adopt the solution when it\u2019s released, \u201cbut at the same time,\u201d he continued, \u201cwe\u2019d love to see Coinbase use it and we\u2019d love to see BitGo and Bitstamp and other companies to use it. Strategically, we want to increase the chances of Bitcoin\u2019s success to accelerate that as much as possible. If we\u2019re able to contribute to that, I think that Square as a corporation will be happy and feel like the investment will be a success.\u201d<\/p>\n

But whether or not this project wows Square\u2019s corporate echelon isn\u2019t phasing Square Crypto\u2019s project plan. Dorsey gave the team a budget to solve problems for the Bitcoin ecosystem, so that\u2019s what Lee is determined to do.<\/p>\n

\u201cWhat Jack has told us is we\u2019re free to decide what we think is best for Bitcoin. Square’s commercial interests don\u2019t influence us,\u201d he said. \u201cThe Bitcoin ecosystem is our boss (not Square) and the community is our customer.\u201d<\/p>\n

Where Corporate Meets Open Source<\/h2>\n

Lee makes it seem like Square Crypto is made up from the vestiges of Square\u2019s corporatism, which dissolved and resolved itself into an independent body that more closely resembles the slap-happy, open-source groups of Bitcoin\u2019s cypherpunk faithful than it does the exit-seeking technocrats that dominate Silicon Valley.<\/p>\n

BTCPay Server<\/a>, an open-source and decentralized bitcoin payment processor, comes to mind. In fact, the BTCPay team, which works entirely on a volunteer basis, received one of the first of Square Crypto’s open-source grants. This $100,000 grant was succeeded by another grant for an undisclosed amount to anonymous Bitcoin developer ZmnSCPxj.<\/p>\n

This is part of Square Crypto\u2019s two-front strategy to march Bitcoin toward mass adoption: On one front, it will develop the LDK; on another, it will pass the buck to independent developers and projects to advance Bitcoin\u2019s growth.<\/p>\n

\u201cFor some developers this can be an awesome opportunity \u2014 to work on something that they\u2019re very passionate about and not really have a boss,\u201d Lee said. He stressed that these grants will be \u201chands off,\u201d so teams should have a project plan in place and a clear direction forward if they want to receive funding. <\/p>\n

Square Crypto has more grants in the works, though Lee wouldn\u2019t disclose the forthcoming recipients. He did say that Square Crypto would hopefully give out a dozen grants per year.<\/p>\n

He also clarified that these grants don\u2019t need to be related to what Square Crypto\u2019s core team is doing. In fact, the projects eligible for grants don\u2019t even need to be highly technical. Though Square Crypto is looking for proposals related to privacy (ones that would, say, advance new technologies like Snicker<\/a> or older ones like CoinJoin<\/a>), they can also be for design work, project management or UX work.<\/p>\n

Returning to Square Crypto\u2019s focus on the \u201copen-source and broader ecosystem,\u201d Lee recognized that the road to making Bitcoin function smoothly on a mass scale will be long \u2014 but Square Crypto\u2019s goal is to make bitcoin a widely used currency, so it will take this road in stride.<\/p>\n

\u201cIt\u2019s a marathon \u2014 not a sprint,\u201d Lee concluded.<\/p>\n","protected":false},"excerpt":{"rendered":"

Building \u201cBitcoin for all\u201d<\/p>\n","protected":false},"author":2566,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[403,749,2629,2630],"class_list":{"0":"post-18732","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-culture","7":"tag-open-source","8":"tag-square","9":"tag-square-crypto","10":"tag-steve-lee"},"author_data":{"id":2566,"name":"Colin Harper","nicename":"colin-harper","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/MjEwMTYzMzc3Njg5ODYzNjQ2-96x96.webp"},"featured_image_url":null,"_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/18732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2566"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=18732"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/18732\/revisions"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=18732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=18732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=18732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}