Square’s stock price has enjoyed a major boost since it began letting users buy and sell bitcoin on the company’s Cash payments app. But the feature only got there because Square founder and CEO Jack Dorsey joined a company hackathon, intent on finding a way to put bitcoin on his Cash payments card.
The firm had been letting merchants accept bitcoin payments since 2014, but uptake was weak, with only two or three bitcoin payments made daily. But Dorsey had grown increasingly convinced that bitcoin would be the “native currency” of the internet, as he followed conversations around it on Twitter.
He spotted an opportunity to try meshing bitcoin into Square’s services during a company “hack week” last January. Dorsey, who shared the backstory of the Cash app’s bitcoin feature at Consensus, a digital currency conference going on this week in New York, said he got an engineer named Mike Brock to join him in the hackathon—although it took about a day for Dorsey to convince him to take part.
Their task, Dorsey said, was this: “Can we build a system where using my Cash Card, which was on Apple Pay at the time, can I have bitcoin [on the card] and go across the street to the Blue Bottle in the Twitter building and buy a cappuccino with my bitcoin?” Dorsey also is CEO at Twitter, another company he co-founded, and famously walks between the two firms’ offices (paywall) in San Francisco.
The Square hackathon started on a Monday; the duo had a week to reach their goal. But Dorsey and Brock failed. “We worked all week—he mainly did the work—but we ran into deployment issues, so we didn’t get the goal on Friday. But we did get it on [the following] Tuesday,” Dorsey said. “It felt amazing, it felt electric, and it felt like something we needed to explore a lot more.”
After that cappuccino, Dorsey asked Brock to start building a bitcoin feature into the firm’s Cash app. Brock now leads a team, including several engineers in Sydney, who work on the app’s bitcoin brokerage features. Dorsey said he would visit the team next week.
Dorsey also revealed that he had a longstanding fascination with the cypherpunk movement—which believes in using cryptography to preserve freedoms like individual privacy—while growing up in St. Louis, Missouri, which would feed his later interest in bitcoin. “We had a huge hacker community there,” Dorsey said. “I grew up on this newsgroup called alt.cypherpunks and I was really fascinated by cryptography.” It would be on a cypherpunk mailing list that the mysterious bitcoin founder Satoshi Nakamoto would publish his paper describing the mechanics of his digital currency.
Dorsey said he didn’t initially understand the significance of the bitcoin paper when it was published, but he appreciated the “philosophy” behind it, and how Nakamoto published it under a pseudonym. “What was really interesting was this sense of a currency, a currency based on cryptography. It was the ultimate application of cryptography,” he said.
Square’s embrace of crypotcurrency is still hotly debated in its boardroom. “On our board we have people who are pretty knee-deep in the financial industry,” he said, a reference to former Goldman Sachs CFO David Viniar and former US Treasury secretary Larry Summers, “so we have healthy debates about cryptocurrency.”
Dorsey claims he’s still figuring out how Square could integrate cryptocurrency features more deeply, saying he was “resting in the I-don’t-know” for awhile. But he said the firm was committed to upholding the principles of decentralization that bitcoin is built on, noting that “no corporation or governing body can or should own” the technology behind cryptocurrencies.