Did Jack Dorsey outsmart Saxo Bank's Outrageous Predictions?

Jack Dorsey, co-founder and, until recently, president of Twitterhas been a staunch supporter of bitcoin (BTC / USD) for years. In 2009, Dorsey founded the payment service provider Square, which in 2021 was buying bitcoin for its balance sheet, while also offering bitcoin brokerage through the Cash App for many years. Square, a company listed on the New York Stock Exchange she announced that he is going to create a hardware wallet for bitcoin.

About the author

Mads Eberhardt, Cryptocurrency Market Analyst, Sax Banks. Cryptocurrency Market Analyst at Saxo Bank. He gained experience as a trader at Bitcoin Suisse AG and founder http://BetterCoins.dk (website taken over by Coinify).

On December 1, the company increased its commitment to bitcoin informing that its parent company changes its name from Square Inc. na Block Inc. (SQ: NYSE), as was the case with Google and Alphabet and Facebook and Meta. Square argued that the new name evoked numerous associations: "Blocks, blocks of flats and local companies, communities participating together in block events with energy music, blockchain technology, code section, as well as obstacles to overcome". During the change of its OU, Block changed the name of its fully bitcoin-focused entity from Square Crypto to Spiral; the entity develops bitcoin-related products for the company. Even though the company did not openly say it, the renaming from Square to Block seems like a tribute to bitcoin and a strong focus on this cryptocurrency in the future.

November 29 - just a few days before the name change announcement - Twitter informed that Jack Dorsey would step down as president, which would give him more time to concentrate fully on his role as president of Block.

Block owns the Tidal music streaming platform

In May 2021, Block acquired a majority stake in the Tidal music streaming platform for about USD 300 million - this package previously belonged to the well-known musician Jaya-Z. Tidal is a small company in the music streaming industry, compared to giants such as Spotify (SPOT: NYSE) and Apple Music (AAPL: NASDAQ), with which it has not been able to compete historically.

In the context of our Shocking Outlook for 2022, the renaming of Square is an interesting phenomenon. One of the aforementioned forecasts concerned streaming music. Basically, it assumed that in the future artists would distribute their songs directly to listeners using non-exchangeable tokens (NFT) technology, bypassing any intermediaries such as labels or platforms Spotify or Apple Music. With performers only receiving 5-25% of music streaming revenue, the current industry model seems to favor middlemen over content creators, and the industry may be ready to transform towards fair revenue distribution.

Will Tidal decentralize?

With the parent firmly focused on bitcoin, the question that might be asked is whether Block will ultimately aim for Tidal to build a more decentralized framework of operations, which would align with our Shock Prediction that artists would be accounted directly to the chain over time. real, without the need to involve other intermediaries such as labels. Although this is pure speculation, there are some indications that this platform should be decentralized.

It has been trying to compete with Spotify and Apple Music for years without success. While the latter two continue to expand, Tidal appears to be stagnant. However, some of the top performers have publicly expressed their dissatisfaction with the distribution of streaming music revenues. For example, in 2014-2017, most of Taylor Swift's songs were not available on Spotify due to the singer's unsatisfactory profits through this platform.

By leveraging NFT technology to significantly increase performers' revenue, Tidal has the potential to contribute to another wave of dissatisfaction with established music streaming platforms, with famous artists removing their tracks from other platforms demanding more fairness regarding revenue distribution. As a result, other streaming platforms will come under considerable pressure as consumers choose those with the widest selection of songs. Since Tidal's minority packages still belong to such renowned performers as Beyoncé, Calvin Harris, Kanye West, Rihanna and JAY-Z, the platform may have the necessary support from them to implement such a plan.

However, despite this support, the artists will be bound by contracts with labels for many years, which means that they will not be able to publish their works directly on the streaming platform before the contract expires, which will significantly extend the transformation process.

Doubts about bitcoin

The decentralization of the Tidal platform is hampered not only by contractors' contracts with record labels. The views of Jack Dorsey are also a problem. He is such a staunch supporter Bitcointhat some might even describe him as a maximalist. It is mainly because Dorsey Block does not focus on any other cryptocurrency.

There is a problem with such a strong focus on bitcoin because, unlike ethereum, it does not offer developers the ability to create tokens and smart contracts on its network for decentralized applications and NFT. Therefore, given the current technological potential of bitcoin, it is not possible to create these decentralized music streaming frameworks. If the Tidal de facto will seek decentralization, it will have to either include another cryptocurrency, such as ethereum, or wait for bitcoin to start providing the mentioned support for tokens and smart contracts within its network. Even though Jack Dorsey published a White Paper on a Decentralized Bitcoin Exchange, it will be a long time before the network provides support for an appropriate technological framework to enable music NFT sharing, if at all. 

Meanwhile, ethereum and other cryptocurrencies are taking the lead in smart contracts, NFT and scalability, effectively making it harder for Bitcoin to catch up. As the transition to a specific cryptocurrency such as ethereum through Tidal is unlikely, it is doubtful whether this platform will implement a decentralized framework in the foreseeable future - but it is worth following the turn of events.

You can read all ten Shocking Forecasts for 2022 here.