Jack Dorsey Plans To Launch Decentralized Exchange (DEX) For Bitcoin

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It’s no secret that Jack Dorsey, CEO of Twitter and Square, is a fan of the grandfather of all cryptocurrencies – Bitcoin.

In July, Square announced that it would be creating a decentralized crypto trading unit focused on Bitcoin, although additional details are scarce. Since the exact nature and form of these details had yet to be “determined”, they cheekily named the division TBD.

On Friday afternoon, TBD Square chief executive Mike Brock posted a string of tweet, noting: “There has been a lot of speculation about what TBD is and isn’t.” He then added, “This is the problem we were going to solve: making it easier to fund a non-custodial wallet anywhere in the world through a platform to create ramps in and out in Bitcoin. You can think of it … as a decentralized exchange for fiat. “

Dorsey rang the bell a few minutes later, confirming this important announcement with a tweet to her 5.6 million followers which announced that TBD would help “build an open platform to create a decentralized exchange for Bitcoin”.

A Decentralized Exchange (DEX) is a type of cryptocurrency exchange that allows peer-to-peer transactions, such as borrowing, lending, and trading, without a loan officer or broker in the middle. DEXs operate on conditional bits of computer code called “smart contracts”. These automated contracts run on a transparent and tamper-proof blockchain that eliminates fun financial affairs and fraud.

One of the reasons this is unique is that the underlying Bitcoin blockchain network is slow and unscalable to handle thousands of transactions per second, like what might be required for a commercial exchange – decentralized or otherwise. The Bitcoin network was primarily designed for a limited peer-to-peer payment use case. These programming limitations have largely relegated Bitcoin as a premier store of value and inflation hedge – it is not known for its ability to handle high volume throughput.

For example, the DeFi Prime website notes that over 90% of all decentralized finance (DeFi) projects currently operate on the highly adaptable and programmable Ethereum blockchain network, while Bitcoin only has 10%.

DEX and DeFi require similar amounts of speed and scalability, which Bitcoin lacked – until now. Having the backing of Square developers and local Twitter users could shift that balance significantly to Bitcoin. However, the TBD team recognizes that there are a lot of questions that need to be answered.

“Some of the gaps we’re seeing right now are around cost and scalability. [Network] solves this problem with payments. We need a solution for the exchange infrastructure between digital assets, like stablecoins, ”Brock tweeted. “And here is the question and the challenge: What projects exist today to help us solve these problems natively in Bitcoin? Now that we’ve determined our direction, you’ll hear a lot more from us as we move forward. But for now, thank you Bitcoin Denizens! “

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