Jack Dorsey is stepping down from Twitter to focus on his other start-up, Square. In some senses, the choice between Twitter and Square boils down to a simple one: political clout versus profit. At $97 billion (£73 billion), Square, a payments platform co-founded by Dorsey in 2009, is over three times the current valuation of Twitter. Square, on the other hand, will never be recognised with the “Twitter revolution” or create headlines by banning a former president.
Cryptocurrencies and payment platforms are receiving a lot of funding from venture capital firms. Twitter, on the other hand, has always been known for its political effect rather than its economic pull, having only begun to become profitable in 2018. However, Twitter, like the rest of the social media business, may be nearing the end of its boom cycle. Twitter is no match for industry behemoths like Facebook, YouTube, WhatsApp, Instagram, and TikTok in terms of commercial reach.
Twitter isn’t the only social media company looking to capitalise on these potential. Meta, Facebook’s parent corporation, has been trying unsuccessfully to establish a cryptocurrency that could be distributed globally using Facebook products. In comparison to Twitter’s clear microblogging service, this change makes more sense for a network like Facebook, which has long offered a patchwork of services such as video, photo, fan pages, gaming, buying and selling, and so on.
Dorsey is a cryptocurrency enthusiast as well. He is a big supporter of bitcoin, claiming that it would one day “unify a severely divided society” behind it and become the world’s “one currency.” Square’s cash app accepts bitcoin payments but not other cryptocurrencies. Square just published a white paper proposing a decentralised bitcoin exchange network that appears to lock out other cryptocurrencies.
Dorsey is also a doomsayer when it comes to fiat currencies, which are ones that are issued by governments. “Hyperinflation is going to change everything,” he predicts. It’s taking place.” This is completely false. Recent inflationary pressures are real, thanks to Covid’s increasing production and transit expenses, as well as unusual weather patterns. In the global economy, however, there is no hyperinflation. Given Dorsey’s fame and potential impact on investors, it may be seen as a risky statement, but it also embodies the peculiar worldview of all bitcoin supporters.
It is unlikely that Dorsey’s dream of a single global cryptocurrency will come true. And, as economist Yanis Varoufakis has pointed out, if bitcoin were to supplant fiat currencies, it would be devastating. In the event of a crisis, the “bitcoin community” would have no motivation to increase the money supply.