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Square Inc’s (NYSE: SQ) purchase of Jay-Z’s Tidal could lead to a boost of the cryptocurrency ecosystem.
What Happened: Square CEO Jack Dorsey said Thursday on Twitter that just as the company created ecosystems of tools for sellers and individuals it would do the same for artists.
“We’ll work on entirely new listening experiences to bring fans closer together, simple integrations for merch sales, modern collaboration tools, and new complementary revenue streams.”
New offerings by Square could capitalize on emerging technologies such as blockchain and cryptocurrencies, which are viewed favorably by Dorsey, Reuters reported.
“You need the applications to drive the new economy,” said Gartner technology analyst Avivah Litan.
“No one’s going to just go get a cryptocurrency wallet if there’s nothing to buy,” said Litan, as per Reuters.
Why It Matters: Square purchased a majority stake in Tidal for 7 million in a cash-and-stock deal and cited “economic empowerment to a new vertical: musicians” as a motive.
Dorsey supports decentralization technologies like blockchain because of their potential to circumvent reliance on big tech companies which profit as gatekeepers, noted Reuters.
Non-fungible tokens could reportedly be used to establish ownership of digital media by Square and Tidal.
Litan pointed that NFT could be used to verify the authenticity of autographs and memorabilia.
On Wednesday, a group of cryptocurrency enthusiasts burned a 2006 Banksy artwork titled “Morons” in order to auction it as an NFT.
Not everyone is enthusiastic about NFT, with Litecoin (CRYPTO: LTC) creator Charlie Lee dismissing the hype surrounding the technology.
Price Action: BTC traded 8.37% lower at $46,589.44 at press time. Square shares closed nearly 6.7% lower at $218.41 on Thursday and fell almost 3.4% to $211 in after-hours trading.
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