Jack Dorsey On Investing In Bitcoin

Well, I spent all of November going to various countries on the continent. I went to Nigeria, Ghana, Ethiopia, and South Africa. The intention was simply to learn as much as I could. I made no plans to meet with media or the government. I was focusing my energy on entrepreneurs and students from high schoolers to college kids. The goal was, as you said, just to listen. What I was incredibly amazed by and also inspired by was just the level of focus specifically on Bitcoin, but broader than that, it was the desire to solve really tangible problems in a super creative way. I just felt like this amazing energy of entrepreneurship and people doing whatever it took to make it work and solving really big problems. Square deals a lot with just moving money around, whether it's transacting from one party to another or through lending or various financial services like payroll, benefits, and whatnot. Just the focus on the foundational work of payments and how much that enables so much on top of it was something I learned in every single conversation I had in every country. The energy was incredible, the focus was incredible, the foundational aspect of what was being built and required in order to build on top of that was awesome to see that early. Just the speed and the creativeness that was being employed, I thought was pretty amazing.

I think the greatest skill that we can build and that served me the best is being able to understand how to solve problems better. Because when you think about it, any organization, any government, any company really exists only for one purpose, which is to solve a problem and solve a problem in a more creative way than its competitors, which is why the solution it creates might be picked instead of various competitors. And again, this goes to companies, it goes to organizations like nonprofits, movements, governments as well. So how do we build that skill of problem solving? One of the ways I built it is learning how to program. Learning how to program was not for me a goal. I didn't want to be an engineer, didn't necessarily want to build massive systems. I wanted to build something that I could demonstrate to someone else so that they could see and potentially feel the idea I was trying to express. What I learned about programming about three or four years in is it wasn't about me becoming an engineer at all. It was about helping me to learn how to solve problems. It helped me learn how to break problems down into smaller parts. It helped me learn how to create a hypothesis and then test it via experimentation. So basic stuff, but the beauty of programming was that it also has this velocity, this speed that allows one to see the results of their work very quickly and more importantly show the results of the work to someone else very quickly. So I think it's really important that you find some method of learning how to solve problems better. Programming was the one that worked for me, but there are certainly other ones. And then it's really just like getting deeper into the question that you're trying to ask as you solve a problem. Like when we started Square, we originally thought we were building a credit card reader. We were building a credit card reader for someone's phone. They could take a credit card from their customer, they could swipe it, it would go through the phone, it would go up to Visa, Mastercard, and the card was charged and they would make money. But we learned in watching sellers use it that the sellers that were using our credit card reader didn't want a credit card reader. They wanted to make the sale. They wanted to be able to accept the form of payment that their customer was using. It wasn't about the credit card at all. It wasn't about the reader. It was about simply making the sale. And if you solve the problem of making the credit card reader, it's a very small company and a not so valuable solution. But if you solve the problem of helping a seller make a sale, suddenly the universe of solutions expands greatly. So we went from just making a credit card reader to help someone make a sale to building a point of sale to help organize their business so they could see their business better, make better decisions, to help them make more sales. Square Capital, which is our lending arm, to lend them money so they could buy a new piece of equipment that would double their sales or buy new marketing or hire a new employee or get a new location to make more sales. So suddenly we became a much more valuable company because we asked a bigger and deeper question than what we started with. We started with people need credit card readers because they need to accept credit cards, but that was actually the wrong solution. People needed to make a sale. The credit card reader was just one solution to that problem.

I think there's similarities, but I think more importantly there's differences. Countries and entrepreneurs in Africa can take advantage of the number one being that there aren't a lot of entrenched players yet in Africa. Certainly there are some, but it feels like the entrenchment is more of a form of government regulation and that not being necessarily the most inspiring regulation to help companies build and to grow. But what we had to deal with in the US was a lot of entrenched banks and networks who weren't incentivized to help a company that's just getting started. And we had to go above and beyond in helping them understand why. And we learned in the process as well, but helping them understand why something like Square would help them. Like our goal was to increase access to the credit card network ultimately. If we were successful, we were enabling more and more people to accept credit cards in the first place and therefore to use credit cards. So we would enrich their networks even more and increase the usage of those networks. So if we just came to them with like, hey, we're the new disruptive Silicon Valley company and we're going to destroy your business and all the bravado and all the arrogance that you might expect from a newer startup, we wouldn't have been able to get to where we've been able to get to. Because we recognized not only the problem that our customers were having or would-be customers, sellers, but the problem in fixing that would also solve another problem for the biggest players out there, Visa, Mastercard, and the banks. And that we could reach a size of seller that they were not able to reach before. They didn't build a system to do so, they couldn't do so, whatever it was. So our purpose was suddenly aligned and our incentives more importantly were aligned. So I guess the biggest thing is to look for opportunities to align those incentives with what you might assume to be adversarial entities, whether that be competitors or the banks or the government. And how do you align those incentives so that you can clearly show that everyone will benefit from this over time. And if you know that the government is there to look out for the people and Bitcoin provides a way to help the people, the goal is to show that path and to show that not supporting it would be against the function or the proposed function of the government. So I think there's a lot of the differences that are important to consider and I do think there are some advantages and certainly some gaps you have to build. But again, like visiting the continent, feeling the energy, feeling the focus, that's just work. It's more of a function of like are we prioritizing the right things at the right time.

Everything makes me excited about it. But I don't think there was just one moment for me because I kind of grew up on the Usenet bulletin boards on the internet. I grew up in St. Louis, Missouri. We had one BBS that happened to be connected to this university called WashU which had part of the backbone of the early internet. And I was able to explore Usenet and IRC. And one of my favorite Usenet groups was alt.cypherpunks. And in Cypherpunks, there was a lot of discussion around cryptocurrency and more cryptography and how it might be used to trade value. And this was 30, 35 years ago. So I was fascinated by the concept. I was fascinated by cryptography and how it might be used for everyday things, like how we trade value, what our money is built on. And there were a lot of ideas being traded around from the cryptographers on that board, in that Usenet group. But nothing that endured as itself. A lot of the ideas probably expressed in those various offshoots probably contributed to what Bitcoin is. So I've always been interested in it. And when the white paper came out, I was like, wow, this is it. And not just because this is a culmination of a lot of what I've been interested in and what we were talking about and what was promised, but the whole thing was just poetry. It was a very short, straightforward, simple white paper. It was principled, it was direct, it was pseudonymous. Like everything about it, I loved. I loved that we didn't know who created it. That it felt like it was a collaboration around the world, but it was more importantly born on the internet and wanting to be developed on the internet. So if the internet were to have a currency, this felt like a really good start to the answer. And as I paid attention to it, I watched it. The community that came around it was just as principled and just as curious and just as interesting and weird as everything I found in alt.cypherpunks. It was a weird community and it was a principled community and it was a really cool community. So all that energy seemed to transfer into this white paper which then transferred into a new community that made this real. And I don't know when I first ran a node or when I first bought or traded it. It was early. I don't know the amounts, but continued to pay attention to it until we started Square in 2009. And in 2014, we added the ability for sellers to accept Bitcoin. Didn't see a lot of usage, but when we added it into Cash App, that's when we really got it right and had something that could contribute to the community but also we could learn a lot from. And I think we've done both.

I hate to say this, but all your audio was like chopped up so I only heard the first part of your question. It was about economic empowerment and Bitcoin. I'm going to have to start reading your lips because it's all like clicky. I don't know if anyone else is having this experience or if you can hear me. But in terms of Bitcoin being aligned with economic empowerment, I think if I think about Square, Square could not be built as an internet company. Like when you build an internet company, you create a website or you create an app and ideally the whole world can use it day one. They can just come to it if they hear about it, they can use it. In the case of Square, we had to go country by country. In each country, we had to find a bank to partner with. We had to pay attention to the local government regulation and it became very, very challenging for us to even expand outside the United States. It took us nine months just to launch in the US because of everything that we had to go through. So if the internet were to have a currency, then we could start Square and Square could act more like an internet company in that we could just launch something and then it could all work right away everywhere in the world. So it helps our business, but also it gives the people easier access to the network and more and more people get at least the opportunity to access it, which is important. But for us as a company, it allows us to move so much faster, allows us to be a global company faster instead of this country by country thing that we have to do. And that's important. And I think it's also important that we recognize this is an open source community. This is not controlled by anyone, person, entity, or company or government. It's not being led by anyone, entity, or person or government. It can't be stopped by anyone, person, or government. And we need to give back to it too. We can't just take from it. We have to give back to it. So we created a small team called Square Crypto which gives back by just working on open source projects within Bitcoin. We opened up our patents to the community so that hopefully other companies that have patents around the Bitcoin space or the crypto space are all putting this in a pool so we can defend independent developers from corporations that would try to take advantage through patent law. And then we invested our own money in Bitcoin, not seeing it purely as investment or currency deflation, but actually seeing this as an investment in the community and a good investment in the community. So all these things add up to our purpose of economic empowerment, increasing access for people, enabling us to move faster as a company and as a business so that we can serve more people faster. I don't know if that was your question, but I just heard economic empowerment and Bitcoin so I just took it in that direction. I think I answered the question. Hopefully. Can you hear me now?

I think it's actually a design problem at this point. I mean, there's a lot of people solving the speed and the efficiency issues and privacy and security. Accessibility is something we're working on with Cash App for instance. But I think there hasn't been a lot of designers who've really gotten in there and looked at the end-to-end what it is and the end-to-end flow and really made it simple for everyday people and made it accessible for people. I think Bitcoin has an incredible brand. I think it's the most resilient out of all of them out there. And I think it wants more designers to make it feel straightforward and simple and make it feel easy and make it feel cool and make it feel like a real product, like make it feel tangible like paper cash feels tangible. And I think that's lacking. Obviously there are some egregious places like key management for instance, but just some of the basics too need to be really thought through and designed and done so in a way that anyone of any age in any country can understand immediately what this thing is, what it's for, and how to use it. I think that goes far.