Jack Dorsey’s crypto plan has problems, says ethereum founder Vitalik Buterin

Jack Dorsey and Mark Zuckerberg may be making big plans in the cryptocurrency space, but Vitalik Buterin doesn’t see them as likely to gain much traction.

The engineer widely recognised as the inventor of ethereum, the world’s most-used blockchain, cast doubt on Square CEO Dorsey’s plan for the company to create a new business focused on decentralised financial services that uses bitcoin. The largest cryptocurrency, Buterin said in an interview on Bloomberg Television, did not really have the functionality to do that as it was designed largely to be a “currency of the house”.

“On ethereum, there’s native functionality that allows you to essentially directly put ETH or ethereum-based assets into these smart contracts, into these lockboxes, where there’s then arbitrary conditions that can govern how those assets get released,” said Buterin, who is one of crypto’s most well-known developers.

“Jack is basically going to have to essentially create his own system that enforces those rules.”

Zuckerberg’s idea to turn his Facebook into a “metaverse company” was also met with scepticism by the crypto mogul. “Metaverse” refers to a vision of an internet-enabled virtual world where people have avatars and interact with digital assets and even corporeal objects via augmented reality.

Zuckerberg is clearly trying to anticipate the next phase of the internet “before the rest of the world goes in some different direction and Facebook is sort of left in the dust,” Buterin said. He noted that Zuckerberg has also been involved with the widely scrutinised Facebook-backed cryptocurrency project Libra — now called Diem. 

There’s “just a huge amount of mistrust” about Facebook, Buterin said, so constructing its own platform could prove ill-fated. He recommended Zuckerberg build on the existing blockchain instead.

Blockchain and crypto have grown rapidly over the past decade, with concepts that are beginning to challenge dominant players in areas like finance, technology and consumer products. Established companies from Facebook and Twitter to JPMorgan Chase and Goldman Sachs have been working on ways to incorporate blockchain into their existing businesses. But many young-fast-moving companies have sprung up in the space that show potential for disruption.

Buterin says blockchain technology poses a major threat to Facebook, Twitter and other social networks. He said we could see the established companies eventually losing out to the upstarts.

And he continues to have big plans for the ethereum network. When asked where he sees it in five to 10 years, Buterin replied, “hopefully running the metaverse.”

Bloomberg News. More stories like this are available on bloomberg.com