- Jack Dorsey is a Bitcoin maximalist who believes crypto could unite the world.
- Dorsey thinks Bitcoin could be the digital currency of the future, replacing today's "predatory" financial system.
He says the community is deeply principled, but also weird as hell.
The cofounder of Twitter and CEO of Block (formerly Square) is a big fan of Bitcoin (BTC). In fact, Jack Dorsey is regularly described as a Bitcoin maximalist -- someone who believes in Bitcoin and only Bitcoin. Dorsey believes that Bitcoin could one day replace the U.S. dollar and be the currency of the future. And he's devoting a large portion of his time to making that happen.
What Jack Dorsey thinks about Bitcoin
Dorsey first got involved with Bitcoin in the early days. He said the community was one of things that attracted him because it reminded him of the internet when he was young. Speaking at the B Word Conference last year, he said, "It's deeply principled, it's weird as hell, it's always evolving."
Plus, his experiences in building Square, the payment solutions provider that recently rebranded to Block, showed him the flaws in the financial system we have now. "We encountered this crazy, predatory system that was slow, that was obtuse." Dorsey says the current system is not relevant to today, never mind the future, especially when you consider the needs of the rest of the world.
READ MORE:Best Places to Buy Bitcoin
For Dorsey, Bitcoin offers a potential solution. "When I saw Bitcoin in 2009, you see a chance to replace the whole foundation," he said. He sees it as the native currency of the internet. If you're not sure what that means, imagine a global currency that's accessible to everybody, decentralized, and not controlled by any single entity. That's a pretty powerful concept.
He's not blind to Bitcoin's faults -- many criticize the granddaddy of cryptos for being slow and clunky, with relatively high transaction costs. But Dorsey pointed out in a discussion on Twitter earlier this year, that this is par for the course. "There is that deliberate, yet slow, development cycle for Bitcoin because the developer community around it is very cautious, because this is meant to be a global monetary network," he explained.
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How the Lightning Network solves some of Bitcoin's issues
The Lightning Network is a layer 2 solution, something that sits on top of Bitcoin's existing blockchain to improve its performance. The idea is to reduce fees and speed up transaction times, making it a more realistic form of payment.
Spiral is one of Block's subsidiaries that's dedicated to advancing Bitcoin usage worldwide. At the end of last year, Spiral put out a Lightning Development Kit. The project makes it easy to integrate Lightening into your Bitcoin wallet -- essentially making Bitcoin more accessible to ordinary people.
Dorsey tweeted last year that he thinks Bitcoin could unite a deeply divided country, and eventually the world. Making the lead crypto more accessible and improving its functionality will certainly be a necessary step if it's to have a chance of creating the cultural and social shifts Dorsey believes are possible.
Should you invest in Bitcoin?
It probably isn't easy to be a Bitcoin maximalist in a world with 18,000 cryptocurrencies. However, if you decide to invest in cryptocurrency, Bitcoin is arguably the most established and "safest" crypto. There's a lot we don't know about how this market will evolve, but Bitcoin has the longest track record and makes up about 40% of the total crypto market cap. Many financial experts advise keeping a large chunk of your crypto assets in Bitcoin because it's best placed to survive for the long term.
Dorsey's perspective on Bitcoin is a useful one for investors. He's not talking about where Bitcoin's price might be in 10 years, he's talking about the ideological reasons for supporting the original cryptocurrency. If you're new to crypto, understanding those ideological arguments will help you understand the coin's long-term potential. As such, it's a good area for further research.
Sadly, ideology alone can't drive financial decisions. Buying Bitcoin also depends on your financial situation and investment goals. For example, before you invest in Bitcoin, make sure your emergency fund is in good shape and you're on top of your retirement savings. If you're trying to pay down debt, do this before you invest. And, finally the golden rule: Only invest money you can afford to lose. That way if Bitcoin's price does collapse, it will be disappointing but not financially devastating.
Cryptocurrencies get a lot of bad press. People criticize the scams, the environmental damage, the potential for money laundering, and there's justification for those concerns. All the same, Dorsey's passion for Bitcoin is an inspiring and sometimes useful reminder that it can also be a force for good.
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Emma Newbery owns Bitcoin.
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