You can now pay with Bitcoin at up to four million merchants. Yes, that is correct. You heard it right. Square, one of the most popular point-of-sale platforms, just rolled out Bitcoin payments.
That means you can pay at your bodega, at your little grocery store, at your favorite arts and crafts store with Bitcoin. Jack Dorsey owns this company. He also owns Cash App. Yes, the neobank fintech company.
There is a lot of stuff that happened this week in the Cash App ecosystem. Jack Dorsey is pushing Bitcoin along, and there's also a couple little controversies. Let's talk about them.
[upbeat music] So Charlie, what's crazy about this rollout with the four million
stores where I can now accept Bitcoin, you could also pay in Bitcoin without even knowing it at anywhere that accepts Cash App now- Yeah...
with this feature where you can pay in USD, but Cash App makes the payment on the back end on the Bitcoin network, either on Lightning or on Mainnet. And we'll talk about the implications of that in a little bit.
But a really massive update from Cash App, a part of a slew of other updates, some of which are not Bitcoin-related and some of which are not crypto-related either. We won't really touch on those as much.
But Cash App leading the charge to kind of get people to pay in Bitcoin and accept Bitcoin.
Yeah, this may sound-- This episode may sound a little bit like the, like us just glazing Cash App the whole time and Jack Dorsey, but this is really huge.
So for context, Jack Dorsey, the billionaire founder of Twitter, he got Bitcoin pilled a number of years ago. He's really into things like Nostr and Freedom Tech. But anyway, he owns this company Block.
Block owns Square and Cash App and other things like Bitcoin mining company Proto. So Square is the point of sale. Pretty much everybody in the US knows it. It's big internationally. There's millions of these merchants.
It's a point-of-sale system. You go swipe your card at these systems, and it does inventory management. So a lot of people use this, have no idea what Bitcoin is, do not care about it.
Well, one of the big questions is, like, when is Jack Dorsey, the Bitcoin billionaire enthusiast, gonna roll out Bitcoin into the Square terminal?
Well, after many years of speculation, it finally happened, um, yes, this week, the twelfth and the thirteenth of November, uh, Jack Dorsey's Square and the sister company, Cash App, rolled out, like, all these crazy features, and I'm looking through them, and there are a lot.
Like, this is very compelling on a number of levels, and, uh, we're gonna just go through a couple of them.
You know, I was having a conversation, Colin, with, um, a friend here in town who's, who's experienced in, like, the point-of-sale world, and he was like, hit me up last night.
He's like, "So you can pay, like, with Bitcoin in Cash App." He's like, "I don't really see how anybody would do that, but it, I mean, it's nice to have." And my response was, "I actually think you're right."
Like, I don't know if just being able to pay with Bitcoin does a whole lot for the average, like, person who is a Bitcoin enthusiast.
But the more I look into it, and the more I talk with you and look at the actual features, there is a lot more going on besides just like, "Oh, let's buy, um, a little, you know, a gallon of locally sourced milk in Bitcoin."
That's really not the big story. The big story is the holistic feature set and the rails upon which are happening. I'll throw it back to you to, to further lead us into this.
I think that there is a sort of novelty period on things like these where Bitcoin users like myself and perhaps you, if there are stores in our area that are using Cash App terminals and accept Bitcoin, I am absolutely gonna go patronize that business.
Yeah. And I mean patronize in the good way. I'm not going to go shout at them. [laughs] Like Steak'n Shake. They-- Steak'n Shake, you can pay with- Yeah... like Lightning and Bitcoin at Steak'n Shake. That's great. Yeah.
They got, uh, five thousand Bitcoiners who are on Bitcoin Twitter to go buy like three meals max. And- Yeah. Yeah. And if In-N-Out did that near my house, I would line up probably that day and go get a burger, for sure.
And how long I would, how many times I would do that, though, is kind of up for debate.
I think there's definitely an argument to be made that there are certain businesses if I were a regular, I probably would pay in Bitcoin sometimes.
But you know, some of these Bitcoiners have credit cards that give them Bitcoin back, right? Yeah. And some of them are like, never spend your Bitcoin.
So sometimes there's, there's kind of this psychological barrier to liquidation, including, you know, the tax implications.
But to your point about there's something being bigger going on here, Cash App is essentially taking the Strike playbook of trying to use Bitcoin, or not trying, of using Bitcoin as a settlement rail, but not denominating purchases in Bitcoin and not even necessarily making the user aware that they're using Bitcoin in the transaction.
And so what Cash App's doing here is not unlike what Strike did when they announced those cross-border settlements in fiat, right?
So this was a largely misunderstood feature that Strike added, where it's like you could send, a user in the U.S. could send a user in the UK or Europe money on Strike.
The, the transaction would settle over the Lightning Network, and it would then, uh, end up in the end user's account in whatever currency they use, dollar- Yeah... euro, pound, et cetera.
Well, this is this on a local level, and this could be a huge benefit to merchants if they want to try to find a way to circumvent transaction fees from credit cards.
I mean, most users aren't aware of this because merchants stomach transaction fees, but a low-end credit card is like two to three percent, probably three percent. Yeah. And Amex used to be as high as five or six.
I've heard they've come down recently. That's per swipe. So like that's, that's their- Every transaction. Yeah. Every single transaction is costing that much.
That's the transaction cost f- of, of, of the chain of custody that's needed and the, and the accounting that's needed to reconcile that credit card with the final end user or, or the merchant, right?Um, so
if you could use Bitcoin, you can completely eliminate those transaction fees for the end user.
And bear in mind, I don't know how the workings of this, the inner workings of this work in Cash App, but, like, Cash App has huge Lightning channels. They also have a lot of Bitcoin.
They can get creative with this in a way where their cost to actually send this Bitcoin is probably minimal because they could just be shuffling internally within their own accounts.
I have no idea how this works, total disclaimer. Um- So there, there actually is a little bit of clarity on that, which I'll get into, uh, later on. Okay. Yeah, I would, I would love to see how that works.
But you're right. I mean, you may... Yeah, but you're right.
It is, it's like Bitcoin under the hood used to settle the internal balances, which basically, um, this is a clear, strict improvement to both Cash App Square, like the, the, the people who process the money, and the user who wants lower fees.
Like, this is cutting into directly the Amex Visa network. This cuts into that revenue source. That is what- One hundred percent. That's what they're taking on. And, and that's the...
This argument's been rehashed for years from a lot of people, uh, who have been longtime, you know, thinkers in the Bitcoin space. I say thinkers with no irony there.
But the guys like Nick Carters and Alan Farringtons of the world, uh, and others have said, you know, ultimately Bitcoin competes with Visa and other settlement networks, and that's what we're seeing here obviously.
And the last thing I wanna highlight with this is, what's interesting about this is this is really... The way Cash App has positioned this for adoption is to make it merchant-first, in my opinion.
In the sense that the user doesn't see anything necessarily differently. They have to choose whether they wanna pay in Bitcoin or dollars.
But if they're u- if they're paying with the Bitcoin in the back end and dollars on the front end, they don't have to do anything extra. They don't even have to hold Bitcoin.
You might see merchants push for this feature in the same way that in local economies you see cash still alive.
You know, my local farmers market and a lot of local businesses, I live in a small town, they don't want credit cards because it increases their costs, and so they want to have cash payments and settlement for things.
And if enough merchants try to move their users towards this, this could be something that actually sparks more usage of Lightning on-chain Bitcoin, et cetera. I, I'm skeptical that it will be...
Will people be willing to go through? It's a small hoop, but it's still a hoop, and will they be willing to do that? Yeah. Time will tell.
But I just think it's, it's important to highlight that the smart move here, people have always said you need to get the users to go to the merchants and say, "Well, I'm gonna pay in Bitcoin."
Like, actually, you need to get the merchants to say, "This is the form of payment we're accepting." 'Cause that really ultimately dictates what ends up being used in certain establishments. If a place says, "I have...
I'm only gonna take dollars," and I like their product, I'm gonna find a way to get dollars to buy what they're selling. [upbeat music] Hey, Will here with Blockspace Media.
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And there's... And I mean, look at the network effect. So we're talking four million, uh, Square point-of-sale merchant devices and fifty-five million Cash App users.
So now, because these are under the same company of Block, owned by Jack Dorsey, your billionaire enthusiast Bitcoiner, uh, he-- they can now really get some synergies going. Like, if you...
And, and, and, and I'll get into this, but, like, Cash App now really leaning into the neobank, really leaning into the fintech angle.
So, like, if more users are driving more volume through Cash App and they're also hitting Square terminals, which have, like, really compatible, totally seamless user experience, like, this is a very compell- This is a very, like, this is a flywheel network effect.
Um, and what's interesting is this doesn't really mean more people buying Bitcoin.
It really just means more Bitcoin settling between users, whether that be on-chain or really, in this case, probably mostly through Lightning Rails. People w- you know, it's gonna be centralized custodial Lightning.
Um, I-- probably, mostly. Uh, but still, like, this is Bitcoin volume exchanging hands, even whether it be internally through, like, one large corporation like Block, but it's still, like, huge.
It-- We're talking lots of volume. If you...
I don't know, I don't actually have the numbers, but think about all of, you know, four million, uh, merchants worth of point-of-sale, like, revenue, uh, gross revenue through that. Like, that is a lot of money.
Ultimately, Square is setting itself up to be a pretty interesting neobank. It's using Bitcoin as an option for payment rails in addition to the ones that are available to the US dollar system. It has stock trading.
It has very limited borrowing, up to five hundred. I'd be curious to see if they find a way to expand in other credit instruments for their users.
And it has this point-of-sale terminal, so you can keep people on both ends of the transaction. You can keep both the users and the merchant inside the ecosystem.
And like you said, I don't wanna turn this into a glazing fest 'cause there's a, I'm sure there's a lot of things to be said about Square and whether or not this is actually gonna succeed, the Bitcoin payment side of it.
Again, I am skeptical. But I have been using Square since 2020. I r- or 2019. I love it, and I really like- In Cash App? Yeah, Ca- sorry, excuse me. Yeah. I've been using Cash App since 2019.
I've used Square before actually as well, um, o- o- as, as, you know, on the merchant side of things.
AndAnd I, I really do love the product stack overall, and seeing them prioritize integrating Bitcoin in a way that is, makes sense and isn't ham-fisted, I think is a breath of fresh air.
The design team clearly is looking at users who have no idea what Bitcoin is and trying to make sure that they're not going to be left behind. I think that's important.
You know why I think this might be a little, uh, a little muted on, like, Bitcoin Twitter and in Bitcoin circles? Um, is because we've seen a bunch of these types of announcements.
Think back, like, over the past five years. We've seen a bunch of these, and never-- none of them really played out. Well, yeah. Think about when the big Twitter integrating Lightning payments. Yeah.
Like, do you remember that? Which they don't even do anymore. Yeah. That was, you know, and that doesn't exist. Yeah. It's gone. And then, and then Strike had all of these announcements.
Strike's still a great product, um, which I, you know, recommend to a lot of people.
But, like, Strike was kind of supposed to be that product, uh, and it really has not achieved the network effects that we've seen with Cash App, clearly. And now...
So it's like maybe, maybe there's, uh, a lot of disillusionment and appropriate, like, expectation metering here. Um, but it's weird 'cause, like, that was my reaction when it first came out. I was like, "Oh, nice. Cool.
I can pay with Bitcoin at a couple places maybe in my town, and that, that's great. I'll go do it." But as I'm looking through this, and as I see other people, the, you know, their takes, I get more and more excited.
Um, yeah. The, the merchants will d- will-- Some merchants will demand this because it will, it's like a few percent that they get back and, um, yeah. So Cash App
has also announced simultaneously a hundred and fifty new features, and there are two new- A hundred and fifty? Yeah, yeah. So this is, this is the...
Yeah, this is why I wanted to, like, do this podcast about it, 'cause it's wild. The... It's-- They have a whole page of features. It's too much. I haven't even made it through. I haven't even read them all.
Um, actually, I think I can pull it up. Okay, if you go to cash, cash.app/new, they have obviously a cool roller video, but then they have all of these, like, explainers of, uh, all the new features they're doing.
Pay with Bitcoin without spending your Bitcoin. They have a little video to describe it. And then they have, um, uh, higher limits for fee overdraft coverage. You can pay at Domino's now.
You can pool money with your friends. Like, you know, it's all, like, neobank-type stuff. Um, one of the features which we -- maybe we just get into this now, um, you can, uh, do stablecoins on Cash App. Here it is.
Move digital dollars globally and instantly. Um, so you can, uh, withdraw stablecoins on Cash App, which one might ask, "Wait a second.
There's not really stablecoins on Bitcoin, not at scale, not at Cash App scale. What are those stablecoins on?" The stablecoins are on Solana. [laughing] You're telling me they're not on Bitcoin? No.
Not on the Omni network? I know Tether's supposed to come, you know, release their token on T- you know, tappered assets or RGB or whatever, but no. Look at this from our favorite, um, Bitcoin maxi, uh, broken clock.
He's either right or he's super wrong. Planeter, um, uh, broke, really broke the news that, uh, Cash App's using -- You can w- you can use USDC, so issued by Circle, on Solana.
You can w-withdraw to the Solana network your stablecoin on Cash App. So that angered a lot of people. Um, I had a, you know, my take on it. I posted a tweet about it, which is really, uh, not, uh, about that.
It was my, my, my take is that this is very obvious, like people demand this. Stablecoins are the most popular products, um, to come out of our industry.
It's one of the most revolutionary trends in traditional fintech and banking. The- they're wildly popular. This is an obvious inclusion into a neobank fintech app like Cash App.
It just so happens that there's a few, you know, a few thousand people on the internet who are really into Bitcoin who think that this is evil that you touch these things.
So, um, I will actually point out that, uh, one of the leads for Cash App and the product lead on a lot of this, Miles Suter, did respond to, um, this criticism.
Uh, he said, "The foundation of Cash App 1.0 is fiat already. Stablecoins are just upgraded fintech rails." I personally agree with this. "Our implementation is chain and coin agnostic.
We are building, quote, Cash App V2 on Bitcoin. If customers want to send us stablecoins, we will happily turn them into bitcoins." Um, yeah.
Yeah, I mean, just to kind of put, like, detractors on blast here, how do you expect Bitcoin to be integrated into traditional finance if we don't have fiat rails to interact with that Bitcoin with, right?
And to Miles' point, stablecoins, next to Bitcoin, stablecoins are arguably the only successful thing to come out of crypto. Some people would probably bristle at that and say, "What about DeFi?" I- What about NFTs?
Well, yeah. Right. Yeah, but those are, those are like niche things. NFTs are speculative. Meme coins are speculative. DeFi is even speculative because the yield actually has to be something valuable. Yeah.
So ultimately, stablecoins and Bitcoin are really the only thing, and arguably the networks that support them, Ethereum and Solana, are the only things that have really proven themselves to be usefulTo people in the real world, and it makes sense that Cash App would evolve its fiat rails to accommodate Solana, which is, you know, arguably probably the best r-rail for stable coins currently, and to bake that into a stack.
It's gonna lower costs for merchants, just like we were mentioning earlier for Bitcoin. Yeah. This is inevitable, and it's-- it shouldn't be surprising.
And any sort of, like, Bitcoin maximalist recoiling is just detached from the reality of people who have no idea what Bitcoin is really and don't re- or if they do, they don't really understand it.
You can't expect to get to where a lot of these people wanna get, I'm saying Bitcoin maximalists, without having to play ball with the system that's in place, or even its permutations within crypto, i.e., stablecoins.
Yeah. And my point isn't even that we should build stablecoins on Bitcoin. I'm kind of agnostic to that. I think Bitcoin is- I don't want stablecoins on Bitcoin.
Yeah, I, I mean, I, I think it-- we, we could do a whole discussion on how it could distort, and it really like, it like really distorts, uh, Bitcoin's incentive to have- Mm-hmm... auxiliary assets on top of it.
But that's another- It creates another headache for potential mining, uh, malincentives. But anyway, sorry. Continue. Yeah, exactly. Um, but yeah. But yeah, my point is like, um, the people really want this. Um,
I don't really even think a stablecoin needs a blockchain. They're just an, it's a, it's a rail for a digital dollar is what it is. And some would say Solana is not even a blockchain. So like- Some would say. Yeah. Yeah.
Some would say, I mean, and, you know, it probably doesn't. But the blockchain as digital ledger-like technology- Yeah... certainly decreases- It's a blockchain. It's an, it's effectively a blockchain. Yeah.
It makes, doesn't make a sense, like, not call it a blockchain. It's just we can debate how decentralized it is.
Anyway, um, but like, so that's just one of the things I, I think we got a little, I think I sniped us into talking about that particular feature for Cash App too much. But there is like a lot of stuff going on.
Um, another one of my favorite features is the, uh, the Cash App map. So did you see this? So, um, you can now do, you can now, uh, there's like maps integrated. Every app's doing a map. Instagram tried to roll out maps.
Snapchat has apps. Cash App now has a map to see who's, uh, who's vending Bitcoin-related goods and services. It's awesome.
Uh, I found one more vendor popping up in my own hometown, uh, just very recently, uh, just in response to this. I'm gonna go eat some good pizza tonight, uh, and pay in Bitcoin.
Uh, so yeah, you gotta, you gotta love a good map. The people love to fly around a map, but I don't know. If you're looking at this column, you see, you see the, uh... I wonder if I can pause it here.
Do you see the, the salacious thing here? Look at that line, "Pay in Bitcoins." Yeah. You see this. You're gonna have to... So this is something we were talking about- Lots of-... before we hopped on. Yeah.
And w- this is an age-old riff in Bitcoin, which is basically how do you- We, we even literally had a writers' room. We had another conversation like this- Yeah... like months ago, where we- When a- For real...
when John Carvalho did his, his bit for this. And so basically- Okay... there's this age-old riff in Bitcoin, it's like how do you denominate, you know, increments of Bitcoin? How do you categorize them?
How do you name them? Satoshis seem to have won out for a while there, although a lot of people rail against this. One Satoshi is one hundred-millionth of a Bitcoin. A hundred million Satoshis equal one Bitcoin.
There's another taxonomy called bits. I'll let you explain. No, I won't, I won't get into it. But there's different, you can, there's different names for each subunit of Bitcoin, just like we have- Yeah...
quarters, dimes, nickels, whatever. Right now, Bitcoin has only been whole Bitcoins or the smallest subunit, the sat or Satoshi. Or, yeah. And- Or point zero zero one five Bitcoin or point zero zero three four.
Yeah, exactly. So Bitcoiners love to always argue about stuff, me included, and so they're always debating what's the best unit. Well, anyway, over the past year,
the Bitcoin developer John Carvalho put out what I thought was the most, one of the most ridiculous proposals ever, where basically you take that
denom- that subunit, the smallest one that we called the Satoshi, and you just rename it to the Bitcoin. You just rename the whole subunit to a Bitcoin.
He even put out a Bitcoin improvement proposal, BIP-177, about this, which we railed on. And guess what? In Cash App, um, I don't know if this is a default setting- No, I, I- But it is familiar to me...
it seems to be the default. I think they made it the default, but you can toggle between this or just BTC, which is just decimal denominated. But otherwise, it will show up a Bitcoin logo, and one sat will be one B.
But it's not one Bitcoin, that's just one Satoshi. And then one Bitcoin will be a hundred million B. Yeah. So, I mean, if we're talking about, like, I get it, sats is confusing to people.
But if you're trying to not, if you're trying to confuse people more, then you just did it. This makes no sense for the average person, I think. Uh, it just- You s- You know?
You say that it doesn't make sense to us now, but it's like, uh, you know, somebody's first introduction to something is often, like they imprint on it like a, like a baby bird and their mother.
Like that will be their reality for what Bitcoin is. And so sometimes there's that, that introduction bias that gets people. I... There's a few different hilarious takes.
One, this is also, you know, this is a BIP, um, BIP one one- one seven seven, to suggest that Bitcoin, the protocol, start referring to the subunits as Bitcoins, and everyone's been poo-pooing it, myself included.
But the funny thing is, I heard someone say, "This is a Square-activated soft fork." [laughs] 'Cause Square just up and, Cash App just up and did it.
And I also like to imagine, um, you know, like a Bitcoin OG who's been s- quietly stacking Bitcoin for forever, and maybe they've amassed, like, a hundred Bitcoin.
You know, someone, uh, I'm imagining some, like, random, you know, new, you know, new pleb Cash App user being like, "You only have a hundred Bitcoin? What have you been doing the past decade? I've got thousands."
[laughs] So [laughs] you know, uh, there's a few different angles. But, you know, uh, I'm curious to see how this, this goes. Um,
over under, do you think Bit- Cash App retains this default denomination a year from now? I'm gonna throw this, throw this at you. What do you think?
I think mo- I think most users will probably not even notice that it's there. And for Bitcoin users, my hunch is the majority of them are gonna go to decimals because that's what they're used to seeing.
I, I think that that's g- probably gonna be-- That's what I'm gonna do. I don't wanna look at this cancerous way to denominate Bitcoin. [laughs] One Bitcoin is one freaking Bitcoin, man,
and there are nearly twenty-one million of them. And if you don't know what I mean by nearly, go look at the Writer's Room backlog. We have an- Yeah... episode on that too.
[laughs] We will have covered every, [laughs] every niche topic in Bitcoin. Um, I think we could probably cut it there. Um, there's a hundred fifty features in Cash App.
Um, I would love to get someone from the Cash App team or Block team on. Miles, if you're listening to this, hit me up in the DMs. Or other folks from the, uh, the top of the Block, uh, team, hit me up.
I wanna come and riff on Cash App, Square, and Bitcoin product design decisions with you.
Otherwise, make sure to follow the Block Space Podcast wherever you get good podcasts, [upbeat music] wherever fine podcasts are sold. Otherwise, catch you all next week. Hey, yo, and hit up my Cash App tag.
Send me five dollars. Y'all have a good weekend. Yeah. [upbeat music]