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Square Plans to Build a Decentralized Bitcoin Exchange

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the staff of the Ridgewood blog

Ridgewood NJ, Square CEO Jack Dorsey has announced that Square is working on a new decentralized exchange called TBD. TBD will be a fully permissionless and decentralized exchange built around Bitcoin that will let users fund any kind of Bitcoin wallet using fiat currency. Square aims to develop the project using only Bitcoin infrastructure. There is no timeline for when Square plans to launch TBD.

DeFi is short for “decentralized finance,” an umbrella term for Ethereum and blockchain applications geared toward disrupting financial intermediaries.

DeFi draws inspiration from blockchain, the technology behind the digital currency bitcoin, which allows several entities to hold a copy of a history of transactions, meaning it isn’t controlled by a single, central source. That’s important because centralized systems and human gatekeepers can limit the speed and sophistication of transactions while offering users less direct control over their money. DeFi is distinct because it expands the use of blockchain from simple value transfer to more complex financial use cases.

Bitcoin and many other digital-native assets stand out from legacy digital payment methods, such as those run by Visa and PayPal, in that they remove all middlemen from transactions. When you pay with a credit card for coffee at a cafe, a financial institution sits between you and the business, with control over the transaction, retaining the authority to stop or pause it and record it in its private ledger. With bitcoin, those institutions are cut out of the picture.

Direct purchases aren’t the only type of transaction or contract overseen by big companies; financial applications such as loans, insurance, crowdfunding, derivatives, betting and more are also in their control. Cutting out middlemen from all kinds of transactions is one of the primary advantages of DeFi.

Before it was commonly known as decentralized finance, the idea of DeFi was often called “open finance.”

One thought on “Square Plans to Build a Decentralized Bitcoin Exchange

  1. Please explain relevance of a pineapple gazing out to sea.

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