Bitcoin on Twitter: The Promise and the Problems

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Jack Dorsey, the Bitcoin maximalist CEO of Twitter, put his money where his mouth is this week. His company rolled out “Bitcoin tipping” to its 300 million active users, a service that will let anyone send or receive Bitcoin by sharing a wallet address or using an app called Strike. And to top if off, Twitter also announced a plan to let users connect their Bitcoin wallets to NFTs tied to their identity.

Where to begin? For starters, this might be the most mainstream moment in Bitcoin’s history. That’s because Twitter isn’t just a mega social media platform used by political and sports figures, but also a major force in media that helps drive the news of the day. Tying crypto payments to all this could spur tens of millions of people to use Bitcoin for the first time.

The Bitcoin integration means Twitter has already done something other tech giants could not: Build a borderless payment system right into its app. You may recall Facebook sought to do that three years ago with a new type of stablecoin called Libra, but regulators all but killed the plan. Twitter is more likely to avoid that fate since it doesn’t wield Facebook’s monopoly power and because it is relying on an existing global currency—Bitcoin—rather than trying to mint its own money.

Bitcoin tipping also coincides with the launch of a number of other new (non-crypto) Twitter products, including newsletters and a live forum called Spaces, that are designed to let artists and creators connect directly with their audiences. In practice, this means that a comedian in Mexico could perform on Twitter and instantly receive tips from people in Madrid, Buenos Aires and New York. The company has even set up an invoicing system.

The world has been waiting for something like this. For decades, media and culture have been borderless, but payments have not. Sure, we’ve been able to use credit cards (and crypto) internationally, but there’s still no easy one-click tool plugged directly into the apps we use every day. Twitter’s Bitcoin tipping feature could change that, and also spur the likes of YouTube, TikTok, and others to follow suit. Meanwhile, adding NFTs as a form of identification, as Twitter has pledged to do, could help make crypto communities even more mainstream.

If people use the features.

First, Dorsey has to show he can pull this off. And that’s an open question. Twitter delighted cryptoland by launching Bitcoin tipping—you can see how it works here—but that doesn’t mean it’s going to work as planned. For one thing, the reliance on Strike could mean trouble, since the app and its obnoxious founder don’t appear ready to deal with the regulatory issues that go along with launching a global payment network. Strike was also the partner for the El Salvador government’s bumpy Bitcoin rollout. And speaking of governments, the tax rules surrounding Bitcoin remain a mess, especially in the U.S., and it’s possible that those who use Twitter tipping will find themselves with an unpleasant surprise come tax time—something that will certainly chill adoption.

Then there is Dorsey’s decision to embrace Bitcoin and Bitcoin alone. This has already ruffled the feathers of Ethereum fans, and led Decrypt‘s founder Josh Quittner to wonder if Dorsey excluded Ethereum over fears it would threaten Twitter’s centralized platform. Whatever his motives, Dorsey’s Bitcoin-only path will create political opposition from DeFi diehards the project could really use on its side.

Then, there are the practical problems with Twitters’s plan, especially when it comes to NFTs. The company says it will let users display NFT-based badges that are tied to their wallets, but the Bitcoin blockchain doesn’t appear up to this task, and Twitter refuses to explain how exactly this will work. Never a good sign.

The bottom line is that Twitter’s Bitcoin initiative is full of promise, but fraught with peril. Hey, let’s not judge just yet—the company has just pushed forward with a Bitcoin feat the world has never seen before, and for that it deserves kudos. Have a great weekend.

This is Roberts on Crypto, a weekend column from Decrypt Editor-in-Chief Daniel Roberts and Decrypt Executive Editor Jeff John Roberts. Sign up for the Decrypt Debrief email newsletter to receive it in your inbox in the future. And read last weekend’s column: Solana’s Growing Pains.

25 September 2021 15:01

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