Digital Assets: Jack Dorsey’s Square Proposes Decentralized Bitcoin Exchange tbDEX (Whitepaper)
In a whitepaper, TBD, Square’s bitcoin business proposes a protocol that will improve the on-ramp rails into bitcoin.
Bitcoin’s creator’s vision was for an economy that allowed all participants to freely transact their business without the need for trusted intermediaries. TBD announced today a whitepaper setting out their vision for taking bitcoin to the next level in the global economy facilitating decentralized finance. (TBD)
“The current state of Bitcoin and other crypto technologies is still beyond the reach of everyday people. For instance, gaining access to your first cryptocurrency generally involves going through a centralized exchange. Accessing decentralized financial services then requires multiple asset transfers and transaction fees each step of the way. Aside from gatekeepers and cost, the complexity and sheer unintelligibility of this process today is a prohibitive barrier to entry for most.”
What will the proposed bitcoin exchange do?
“It provides the infrastructure necessary to create a ubiquity of on-ramps and off-ramps directly between the fiat and crypto financial systems without the need for centralized intermediaries and trust brokers. This makes crypto assets and decentralized financial services more accessible to everyone,” says the whitepaper.
The protocol seeks to promote global financial inclusion “without the permission, participation, or benefit of financial intermediaries.”
“Globally, 1.7 billion adults lack access to the banking system, yet two-thirds of them own a mobile phone that could help them access financial services,” the paper says.
“Decentralized and trustless systems create a world that empowers individuals — one in which the right to engage in payments is neither subject to proving creditworthiness and the ability to pay account fees, nor subject to censorship when an intermediary’s values do not comport with the payer or payee.”
However, transaction fees will apply on tbDEX – only they will depend upon the transacting parties’ participation in the negotiation of trust for consummating the transaction.
“Transaction costs are ultimately driven by risk. At maximum anonymity, transaction costs will necessarily be higher; at maximum disclosure, they should be lower. This approach to price discovery allows the marketplace to find the right balance,” said TBD.
Related Story: Square Mulling A Hardware Wallet For Bitcoin
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