Jack Dorsey Publishes White Paper Introducing Square’s tbDEX, Is It Truly Decentralized?

On Friday, co-founder and CEO of both Square and Twitter, Jack Dorsey published a white paper describing the plans that Square has for its decentralized Bitcoin (BTC) exchange tbDEX. However, tbDEX unlike most decentralized exchanges (DEXs), will not feature its own governance token seeing as it will not utilize a trustless model. Rather, its protocol is designed in a way that will help build trust relationships without having to rely on a federation to control access.

Jack Dorsey Releases White Paper For tbDEX, Here Are Some of Its Features

The tbDEX might not be a decentralized exchange in the truest sense of the word after all. Instead it’s more like a peer-to-peer platform where users can swap tokens with one another, with Square overseeing the process.

Also, tbDEX hopes to add many more features that make it far less decentralized than a DEX in reality. First off, the protocol puts all participants through a background check called know-your-customer (KYC), to confirm their compliance with relevant authorities and regulations, as required by the user’s region. Only after this can users start swapping coins with one another, after linking their wallets to the exchange.

In addition, the white paper will be featuring the deployment of blockchain analytic solutions either through a third party, or will be built-in to the DEX. This will allow it to keep track of all transactions performed on the platform.

Controversy Around The Analytic Solutions

Meanwhile, the blockchain forensic solutions is drawing mixed reactions and already, a potentially controversial topic. The thing is, a system like that would likely permit authorities to have access to the KYC information of users as they cross-reference public wallet addresses and payment IDs. With this, the authorities can uncover personal identities behind transactions. And, supporters are in full support of such, claiming that this kind of monitoring is necessary to prevent illegal activities.

There’s another interesting aspect in the centalized features of the tbDEX. As discussed in the white paper, there’s  provisions for chargebacks, which cannot be found on most DEXs.  Square is currently encouraging feedback on the white paper on a newly created Twitter account.