Jack Dorsey-led Square is investing $5 million into building a bitcoin mine that runs on solar power, teaming up with bitcoin technology company Blockstream on the project as debate over crypto’s environmental impact intensifies.
While digital payments company Square is backing the project financially, Blockstream is providing infrastructure and expertise for the renewable-energy bitcoin-mining facility. It will be developed at one of Blockstream’s existing crypto-mining sites in the US and be designed to function as a “proof-of concept” to demonstrate that bitcoin mining can be sustainable.
“We hope to show that a renewable mining facility in the real world is not only possible, but also prove empirically that Bitcoin accelerates the world toward a sustainable future,” Blockstream said in a joint statement on Sunday.
Twitter creator and Square CEO Jack Dorsey has argued that bitcoin encourages global moves toward sustainability and renewable energy, and the project is part of the digital payments company’s Bitcoin Clean Energy Initiative.
“Together, we’ll be creating a public-facing dashboard to serve as a transparent case study for renewable energy and bitcoin mining. As we continue to explore the synergies between the two, we’re excited to share our ongoing learnings and real-world data points.” Square said on Twitter.
The project will be open-source, meaning that the code and process behind it will be publicly accessible. All associated economic data will also be shared. The partners said they hope the “open and transparent nature” of the effort will provide a model for other businesses.
The impact of bitcoin mining on the environment is a hotly debated topic in the cryptocurrency industry. Each bitcoin transaction, purchase or sale adds to the blockchain network which therefore requires a constantly increasing amount of energy.
While bitcoin fans share Dorsey’s view and argue that bitcoin mining mostly runs on renewable energy, critics say that the environmental impact is detrimental and contributes to climate change, among other issues.
Environmental concerns are said to be part of the reason for China’s recent crypto crackdown. The vast majority of crypto is mined in China, driving up energy demand in the country and therefore making it difficult for China to reach its net zero emissions by 2060 target.
Twitter and Square CEO Jack Dorsey and Microstrategy CEO Michael Saylor headlined the sold-out Bitcoin 2021 Miami conference on Friday along with a star-studded lineup that included everyone from Tony Hawk to Floyd Mayweather Jr.
In front of 12,000 attendees, with thousands more watching online, the two discussed why they are so bullish on bitcoin, how they got started in the business, their thoughts on recent ESG concerns, and much more.
Here are Saylor and Dorsey’s 12 best quotes from the interviews, lightly edited and condensed for clarity:
“For me, bitcoin changes absolutely everything. What I’m drawn to most about it is the ethos, what it represents. The conditions that created it are so rare and so special and so precious and I don’t think there’s anything more important in my lifetime to work on. I don’t think there’s anything more enabling for people around the world.”
“Whatever I can do, whatever my companies can do to make it more accessible to everyone is how I want to spend the rest of my life. If I were not at Square or Twitter I’d be working on bitcoin. If it needed more help than Square and Twitter, I would leave them for bitcoin. But I think both companies have a role to play.”
“They’re missing everything. They’re not getting out of New York, they’re not getting out of the country, they’re not talking to people. Go to Nigeria for one day and see the struggle that people have to put up with, with their government and with their money. Go to Ghana that has a bunch of transplants from all over the continent and you witness the same thing every single day. Go to India and you’ll see the same.”
“Everything about it is why we’re into it. There’s nothing else that compares to it. And we have no interests other than making sure we are building a native currency for the internet and helping in every way that we can. So all the other coins to me, don’t factor in at all.”
“You just look at the economics of it and, you know, ultimately miners have to make a profit and getting cheap renewable energy maximizes their potential for profit, it’s really that simple. I thought I had some agreement with some notable figures out there and then that seemed to change in a matter of a few weeks…but I believe fully that bitcoin over time and today does incentivize more renewable energy…and gives people more freedom to convert unused, wasted power into something that actually creates value for billions of people around the world.”
“That realization that we finally have a currency that can be traded at any single point on the planet is pretty incredible and what that enables going forward is pretty mind-blowing and I’m going to do everything in my power to make sure that that happens.”
“When I discovered bitcoin I thought this is digital gold on a big tech monetary network and it’s going to grow by a factor of a hundred. Then I thought, well, I should buy as much as I can…I was buying it and I was thinking I have to buy as much as I can, as fast as I can or someone will figure this out and I won’t be able to.”
“Bitcoin is the apex property of the human race. It’s the first time we figured out how to create true property that you can take possession of with full custodial rights that’s least likely to be impaired, that’s most mobile….bitcoin is truly a seminal invention of the human race because for the first time in history we can grant property rights to 8 billion people.”
“I think bitcoin is an extraordinary, disruptive, beneficial technology to the whole energy industry. As I studied it, it became clear that it’s the highest value use of intermittent energy. It’s the highest value use of renewable energy. It’s the highest value use of wasted or stranded energy. And it’s just the highest value use of energy, period. It’s the solution to developing power plants in remote locations, to driving up efficiency of plants and driving down costs…I think as the world understands it, they’re going to embrace it.”
“What I was doing with bitcoin was, I was saying I don’t want to decapitalize the company. I want to keep the capital or grow the capital, but I want to put an asset on the balance sheet. The big breakthrough is I can convert my cash from a liability to an asset and then we realized that if that asset is going to go up by more than 10% a year and you can borrow money at 5% or four, or three, or two, then you should pretty much borrow as much money as you can and flip it into the asset.”
“Bitcoin links together 8 billion people, links together a hundred million companies, it synchronizes the world across political jurisdictions, and it returns rationality to the entire financial system, and it returns freedom and property rights to the entire human race.”
“We say bitcoin is hope. Bitcoin fixes everything…that certainly was the case with our stock….it imbued life into the company…morale was dramatically boosted. We just had the best first quarter we’ve had in a decade.”
Gus Coldebella, who started and led the alliance as the executive director is stepping down. Coldebella, who is the chief policy officer at the investment firm Paradigm, is leaving that post as well.
“With CCI now on its feet, I thought the timing was right to take on a new challenge,” he told DealBook Friday.
CCI was convened by San Francisco-based Paradigm, founded in 2018, which invests in crypto-assets and businesses from the earliest stages of formation through maturity.
The alliance, formed in April, was meant to boost the potential of cryptocurrencies by educating policymakers, regulators, institutions, and individual investors on the benefits of digital assets, which have seen exponential growth in recent years.
It also aimed to debunk many “wrong impressions” the public may have towards cryptocurrencies through government relations, public education, and research publication, according to its website.
The news of CCI’s hunt for new leadership comes as authorities are mulling ways to increase oversight of the crypto space.
Bitcoin tumbled to $42,185 on Monday morning, several hours after Musk replied “Indeed” to a Twitter post saying: “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings.”
The price of the cryptocurrency climbed somewhat when the billionaire clarified that Tesla still holds its stake.
Bitcoin traded lower by 7.9% to $45,064.723 as of 10 a.m. in New York.
Here is where shares of bitcoin-linked stocks stood on Monday morning:
Square reported first-quarter earnings that beat analyst estimates on Thursday, powered by surging demand for bitcoin.
Quarterly revenue from bitcoin grew eleven times to $3.5 billion, from $306 million a year ago, the company said in a shareholder letter. But gross profit from these transactions were only $75 million, or about 2% of bitcoin revenue, making up Square’s fee generation from sales.
Square profits from transaction fees that customers are charged with when they buy or sell cryptocurrencies on its platform, which is smaller in comparison to revenue generated.
Overall quarterly sales for the digital-payments firm came in at $5.06 billion, beating analyst forecasts for $3.37 billion. Net income for the quarter was $39 million, or 8 cents per share. Gross profit more than doubled by rising 79% year-on-year to $964 million.
The company announced a boosted bitcoin stake in February, having invested an additional $170 million. That accounted for about 5% of its total cash, cash equivalents, and marketable securities.
With that investment, Square bought an additional 3,318 bitcoin at an average price of $51,235.68. It had bought 4,709 bitcoin for $50 million in October 2020, currently worth about $263 million.
Square now holds 8,027 bitcoin, according to bitcointreasuries.org, worth about $448 million. That makes it the third-largest publicly-traded holder of the digital asset after MicroStrategy and Tesla.
“We see bitcoin as the internet’s potential to have a native currency, and we want to further that as much as we can.” CEO Jack Dorsey said during an earnings call. “Our focus is enabling bitcoin to be the native currency. It removes a bunch of friction for our business, and we believe fully that it creates more opportunities for economic empowerment around the world.”
Square counted more than 10 million monthly active users of its Cash Card in the quarter. About seven million active users, on average, used its Cash Cards every week in March.
Square’s shares rose 2.5% to $229.55 per share in pre-market trading on Friday.
Bitcoin was last trading 1% lower on Friday, at around $55,800 per coin, but is up 89% so far this year.
Since then, he has led the company through the techlash that has engulfed social media companies, testifying before Congress multiple times.
Dorsey has also provoked his fair share of controversy and criticism, extolling fasting and ice baths as part of his daily routine. His existence is not entirely spartan, however. Like some other billionaires, he owns a stunning house, dates models, and drives fast cars.
Scroll on to read more about the fabulous life of Jack Dorsey.
Rebecca Borison and Madeline Stone contributed reporting to an earlier version of this story.
Dorsey began programming while attending Bishop DuBourg High School in St. Louis.
At age 15, Dorsey wrote dispatch software that is still used by some taxi companies.
He got a job at a podcasting company called Odeo, where he met his future Twitter cofounders.
Odeo went out of business in 2006, so Dorsey returned to his messaging idea, and Twitter was born.
On March 21, 2006, Dorsey posted the first tweet.
Dorsey kept his Twitter handle simple, “@jack.”
Dorsey and his cofounders, Evan Williams and Biz Stone, bought the Twitter domain name for roughly $7,000.
Dorsey took out his nose ring to look the part of a CEO. He was 30 years old.
A year later, Dorsey was already less hands-on at Twitter.
By 2008, Williams had taken over as CEO, and Dorsey transitioned to chairman of Twitter’s board. Dorsey immediately got started on new projects. He invested in Foursquare and launched a payments startup called Square that lets small-business owners accept credit card payments through a smartphone attachment.
Before the pandemic, Dorsey said he worked from home one day a week.
In an interview with journalist Kara Swisher conducted over Twitter, Dorsey said he worked every Tuesday out of his kitchen.
He also told Kara Swisher that Elon Musk is his favourite Twitter user.
Dorsey said Musk’s tweets are, “focused on solving existential problems and sharing his thinking openly.”
He added that he enjoys all the “ups and downs” that come with Musk’s sometimes unpredictable use of the site. Musk himself replied, tweeting his thanks and “Twitter rocks!” followed by a string of random emojis.
“It was a weird state to be in. But as I did it the next two times, it just became so apparent to me how much of our days are centered around meals and how — the experience I had was when I was fasting for much longer, how time really slowed down,” he said.
The comments drew fierce criticism from many who said Dorsey was normalizing eating disorders.
Tweets about his vacation in Myanmar also provoked an outcry.
Dorsey tweeted glowingly about a vacation he took to Myanmar for his birthday in December 2018. “If you’re willing to travel a bit, go to Myanmar,” he said.
This came at the height of the Rohingya crisis, and Dorsey was attacked for his blithe promotion of the country — especially since social media platforms were accused of having been complicit in fuelling hatred towards the Rohingya.
However, Dorsey says he doesn’t care about “looking bad.”
In a bizarre Huffington Post interview in 2019, Dorsey was asked whether Donald Trump — an avid tweeter — could be removed from the platform if he called on his followers to murder a journalist. Dorsey gave a vague answer which drew sharp criticism.
Following the interview’s publication, Dorsey said he doesn’t care about “looking bad.”
“I care about being open about how we’re thinking and about what we see,” he added.
In September 2018, Jack Dorsey was grilled by lawmakers alongside Facebook COO Sheryl Sandberg.
Dorsey and Sandberg were asked about election interference on Twitter and Facebook as well as alleged anti-conservative bias in social media companies.
Dorsey testified before Congress once again on October 28, 2020.
Dorsey appeared via videoconference at the Senate hearing on Section 230, a part of US law that protects internet companies from legal liability for user-generated content, as well as giving them broad authority to decide how to moderate their own platforms.
In prepared testimony ahead of the hearing, Dorsey said stripping back Section 230 would “collapse how we communicate on the Internet,” and suggested ways for tech companies to make their moderation processes more transparent.
During the hearing, Dorsey once again faced accusations of anti-conservative bias
The accusations from Republican lawmakers focused on the way Twitter enforces its policies, particularly the way it has labelled tweets from President Trump compared to other world leaders.
Dorsey took the brunt of questions from lawmakers, even though he appeared alongside Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai.
Dorsey’s dating life has sparked intrigue. In 2018, he was reported to be dating Sports Illustrated model Raven Lyn Corneil.
Page Six reported in September 2018 that the pair were spotted together at the Harper’s Bazaar Icons party during New York Fashion Week. Page Six also reported that Dorsey’s exes included actress Lily Cole and ballet dancer Sofiane Sylve.
He’s a big believer in cryptocurrency, frequently tweeting about its virtues.
In particular, Dorsey is a fan of Bitcoin, which he described in early 2019 as “resilient” and “principled.” He told the “Tales of the Crypt” podcast in March that he was maxing out the $10,000 weekly spending limit on Square’s Cash App buying up Bitcoin.
In October 2020 he slammed Coinbase CEO Brian Armstrong for forbidding employee activism at the company, saying cryptocurrency is itself a form of activism.
At the end of 2019 Dorsey said he would move to Africa for at least three months in 2020.
Dorsey’s announcement followed a tour of Ethiopia, Ghana, Nigeria, and South Africa. “Africa will define the future (especially the bitcoin one!). Not sure where yet, but I’ll be living here for 3-6 months mid 2020,” he tweeted.
Dorsey hasn’t yet commented on how severely these plans may nor may not have been impacted by the pandemic.
Dorsey then came under threat of being ousted as Twitter CEO by activist investor Elliott Management.
Both Bloomberg and CNBC reported in late February 2020 that major Twitter investor Elliott Management — led by Paul Singer — was seeking to replace Dorsey.
Reasons given included the fact that Dorsey splits his time between two firms by acting as CEO to both Twitter and financial tech firm Square, as well as his planned move to Africa.
The deal included a $1 billion investment from private equity firm Silver Lake, and partners from both Elliott Management and Silver Lake joined Twitter’s board.
Patrick Pichette, lead independent director of Twitter’s board, said he was “confident we are on the right path with Jack’s leadership,” but added that a new temporary committee would be formed to instruct the board’s evaluation of Twitter’s leadership.
On April 7, Dorsey announced that he was forming a new charity fund that would help in global relief efforts amid the coronavirus pandemic.
The fund, dubbed Start Small LLC, will first focus on helping in the fight against the coronavirus disease, which has spread across the globe and infected more than 1.3 million people.
The CEO said he will be making all transactions on behalf of the fund public in a spreadsheet.
On July 15, hackers compromised 130 Twitter accounts in a bitcoin scam.
The accounts of high-profile verified accounts belonging to Bill Gates, Kim Kardashian West, and others were hacked, with attackers tweeting out posts asking users to send payment in bitcoin to fraudulent cryptocurrency addresses.
As a solution, Twitter temporarily blocked all verified accounts — those with blue check marks on their profiles — but the damage was done.
Elon Musk said he personally contacted Dorsey following the hack.
During a July 2020 interview with The New York Times, Musk said he had immediately called Dorsey after he learned about the hack.
“Within a few minutes of the post coming up, I immediately got texts from a bunch of people I know, then I immediately called Jack so probably within less than five minutes my account was locked,” said Musk.
Investors in Cathie Wood’s Ark Invest ETFs have had a rough few weeks as a broad sell-off in technology stocks took a toll on performance.
Wood’s flagship fund, the ARK Disruptive Innovation ETF, has fallen 25% since its record close on February 12, based on Thursday’s low of $118. A bulk of the decline has been sparked by a rapid rise in interest rates and the subsequent rotation out of high-growth tech stocks and into more cyclical stocks in the energy and financials sector.
The ARK ETF has no exposure to the energy sector, and just 4% exposure in the financials sector as of December 31.
The volatility in ARK has led to back-to-back record swings in both fund outflows and inflows.
The decline in the Ark’s flagship ETF continued on Thursday, falling as much as 6% as its top holdings Tesla and Square saw declines that outpaced the broader market. Combined, the two holdings make up 16% of the fund, according to data from Bloomberg.
Amid the tech decline, Ark has been selling more stable mega-cap tech names like Apple, Amazon and Alphabet, and has been using the proceeds to buy more shares in less profitable and more volatile stocks like Tesla and Palantir.
In a video posted to Ark’s YouTube channel last week, Wood said she views the recent rotation out of technology stocks and into cyclical stocks as a broadening of the bull market, which is bullish for the long-term. If the market rally were to continue to be solely driven by a narrow rise in technology stocks, similar to what happened during the dot-com bubble, Wood would be more worried.
Whether investors will be able to hold on to Ark’s ETFs amid the heightened volatility is the ultimate question, and fund flow data will provide the answer. Ark Invest has seen its assets under management balloon to more than $60 billion as of mid-February.
The move is set to bring Jay-Z to Square’s board of directors.
Square said it was buying a majority stake in Tidal for $297 million through a mix of cash and stock.
Dorsey said Square would work with artists to grow their fanbases through simple integrations for merchandise sales, new listening experiences, and “complementary revenue streams.”
The Twitter executive thanked Jay-Z for his leadership and vision for TIDAL, and added he will help lead Square and Cash App and Seller by working on Square’s board.
“TIDAL started with the idea of honoring artists by being artist-owned and led, focused on an uncompromised experience of the art. It’s refreshing and right,” Dorsey said in a tweet. “The vision only grows stronger as it’s matched with more powerful tools for artists, inclusive of new ways of getting paid.”
Jay-Z bought Tidal in 2015 for $56 million and proceeded to debut exclusive releases on the platform, such as Beyonce’s “Lemonade” album in 2016. But the platform has struggled to keep up with players like Spotify, Insider’s Kate Canales reported.
“Based on current information, Square does not expect TIDAL’s financial results to have a material impact on Square’s consolidated revenue or gross profit in 2021,” the company said in a press release.
Dorsey had reportedly been in talks to buy TIDAL in December. Dorsey and Jay-Z had previously partnered to start a bitcoin endowment, which would develop the cryptocurrency in India and Africa.
“Jack is one of the greatest minds of our times, and our many discussions about TIDAL’s endless possibilities have made me even more inspired about its future,” Jay-Z said in a tweet Thursday morning. “This shared vision makes me even more excited to join the Square board.”