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Jack Dorsey is preparing a DeFi app platform based on the Bitcoin blockchain

Photo of: Joseph Stone
by Joseph Stone

Bitcoin is certainly the undisputed leading crypto in the world. But that doesn’t stop some people from blaming Bitcoin for its lack of application. Indeed, compared to other cryptos like Ethereum that have created a real ecosystem, Bitcoin remains … only a means of payment. But that could soon change…

Jack Dorsey is known for being the head of Twitter. For the cryptosphere, he is mostly a lover and a big supporter of Bitcoin! On Thursday, July 15, 2021, Jack Dorsey announced that his mobile payment company Square would launch a new platform. This one would be intended for the development of applications related to decentralized finance or DeFi. The particularity of this platform is that it will be built on the Bitcoin blockchain!

Few details have yet been filtered at this stage. Jack Dorsey simply stated that Square already has “some ideas” on how they want to build the platform. The name of this platform has yet to be chosen and is currently limited to a “TBD” (“to be defined”).

DeFi includes all applications (mostly banking) that work in a decentralized way. These can be, for example, lending, insurance, exchange applications, etc. The DeFi sector is a real success story. For example, the capitalization of DeFi has grown from $2 billion a year ago to over $55 billion today!

The vast majority of DeFi applications are usually launched on the Ethereum blockchain. Indeed, this blockchain appears to be the most adapted for the moment. It allows for example to process a large number of operations per second, even if developments are underway to further improve its performance. Moreover, the Ethereum blockchain is one of the few that can handle “smart contracts”. As a reminder, these “smart contracts” allow the automatic execution of applications without the intervention of a third party.

For the reasons mentioned above, the Bitcoin blockchain could not go into the DeFi field. That’s why Jack Dorsey’s announcement of wanting to build the DeFi platform on the Bitcoin blockchain looks interesting. This platform could give new applications to Bitcoin and further establish its leadership.

Moreover, in November, the BTC blockchain will receive a very important update! Known as “Taproot”, it will facilitate the execution of smart contracts on the Bitcoin blockchain.