Jack Dorsey’s Vision

Jack Dorsey has spent the last decade seeking to eliminate intermediaries in communication and finance. He believes Twitter would have been better as a protocol rather than an app, which led him to support Nostr—an open-source, permissionless, and censorship-resistant social network.

Introduction of Bitchat

Recently, Dorsey and a team developed Bitchat, a Bluetooth-only messaging app that was quietly launched in the Apple App Store. This app creates a low-energy mesh network with nearby phones, enabling text messages to be sent without relying on cell towers, routers, or remote servers. It functions similarly to an offline version of Signal, but its true innovation lies in its pairing with ecash, a revived concept that allows Bitcoin to be transmitted directly between phones.

Ecash vs. Bitcoin

Bluetooth was not designed for payments; however, with Bitchat and ecash, an offline digital bearer instrument can be established. A Bitcoin developer, Calle, filmed demonstrations of phones transmitting satoshis using the Bitchat mesh without needing the internet. The ecash tokens can later be settled and converted into on-chain Bitcoin.

Ecash originated from David Chaum’s 1982 paper on blind signatures, which allowed banks to verify transactions while preserving privacy. Although it was commercialized in the 1990s, it did not gain traction.

Bitcoin resolved the double-spending issue using a global ledger, but this came at the cost of speed and privacy found in physical cash. Chaumian ecash combined with Bitcoin rectifies this by allowing local finality and immediate token movement without internet access.

Many might mistake Chaumian ecash for an altcoin since its tokens circulate outside the Bitcoin public ledger. However, each token is a direct claim on Bitcoin held in a mint, with a strict cap of 21 million tokens, just like Bitcoin. While ecash improves transaction speed, it does introduce counterparty risk through reliance on the mint.

Clearing vs. Settlement

To understand ecash’s distinction from Bitcoin, one can reference conventional finance, where clearing precedes settlement. For example, the Clearing House Interbank Payments Systems (CHIPS) records proposed transactions, while the Federal Reserve settles these transactions later. Bitchat functions like CHIPS; when two phones exchange ecash tokens offline, the sender gives up their claim, and the receiver can spend it immediately. However, true settlement only occurs when the holder redeems the token with the mint.

Last-Mile Sovereignty

The Bitchat and ecash system expands Bitcoin’s usability without altering its monetary policy, enabling it to be efficient in environments where quick payment is necessary, even without internet access. The ecash tokens are bearer instruments tied to a secure base.

For successful adoption, mint implementations need strong reputation management and proof-of-reserve features to convey counterparty risk to users. The end-user application must simplify ecash payments for everyday interactions, similar to how Nostr aims to enhance speech freedom—totaling accessible payment systems at the edges of daily life.