Bitcoin News Today: "Bitcoin Meets Bluetooth: Dorsey's BitChat Redefines Offline Privacy"

Jack Dorsey, the former CEO of Twitter and Block Inc., has launched an experimental messaging platform called BitChat, designed to facilitate offline Bitcoin transactions and location-based communication. The app leverages Bluetooth mesh networks to enable message sharing without relying on internet or cellular connectivity. On July 6, 2025, Dorsey released the app in beta via Apple’s TestFlight program, accompanied by a detailed white paper outlining its technical architecture [1].

BitChat’s latest feature, announced on August 21, 2025, introduces “location chat,” a functionality that organizes users into chat rooms based on geohash codes. These codes represent geographic areas—such as neighborhoods, cities, or countries—offering a privacy-preserving method of connecting with others nearby without revealing exact GPS coordinates. Each user is assigned a temporary pseudonym within a given geohash, and the identity resets when they move to a different area [1]. This design allows users to communicate locally while maintaining anonymity, a core principle aligned with Bitcoin’s emphasis on privacy and decentralization.

The messaging infrastructure is built on Nostr, a decentralized protocol that supports Bitcoin’s Lightning Network for real-time payments. Nostr relays, independent servers operated by users, ensure message delivery without a central authority. This setup enables features like “zaps,” or Lightning-based tips, and Nostr Wallet Connect, allowing apps to interface with a user’s Lightning wallet. These integrations mean BitChat users can perform micro-transactions, such as tipping or paying for small services, without requiring third-party platforms [1].

BitChat’s offline capabilities make it particularly relevant in scenarios where internet access is limited. For instance, during crises or outages, Bluetooth mesh networks can maintain communication over short distances, while Lightning payments allow for the immediate exchange of value. This dual functionality has historical precedents; during the 2019 protests in China Hong Kong, similar mesh networking apps saw increased usage due to disruptions in cellular service [1].

However, BitChat faces several hurdles before it can achieve mainstream adoption. Platform policies, particularly on Apple’s App Store, pose a challenge. In 2023, the Damus app—a Nostr-based messaging client—was required to remove Lightning “zaps” from posts due to Apple’s in-app payment rules. If BitChat enables similar features such as pay-to-post or in-chat tipping, it may face similar restrictions, limiting its unique value proposition [1]. Additionally, concerns have been raised about privacy, as repeated participation in the same geohash could reveal patterns of movement and location, undermining anonymity [2].

The broader Bitcoin ecosystem is also observing the project closely. The Bitcoin Lightning Network’s public channel capacity has declined from 5,400 BTC in 2023 to approximately 3,800 BTC as of August 2025 [1]. While developers argue that efficiency improvements have maintained high payment success rates, the perception of declining capacity could affect confidence in BitChat’s payment infrastructure. Furthermore, the sustainability of Nostr’s relay system remains uncertain. Relays, which are essential for message distribution, depend on community support or Lightning-based incentives to remain operational.

BitChat’s potential lies in demonstrating whether decentralized communication and Bitcoin-based payments can coexist in a user-friendly, privacy-preserving environment. If it can navigate regulatory and technical challenges while maintaining user trust, it may serve as a foundational tool for a new kind of decentralized social layer built on Bitcoin principles. Conversely, if adoption remains limited or platform restrictions prove insurmountable, the project may remain a conceptual proof of idea rather than a widely used application.

Source:

[1] title1 (https://crypto.news/jack-dorseys-bitchat-neighborhood-bitcoin/)

[2] title2 (https://finance.yahoo.com/news/jack-dorsey-teases-bitchats-teleport-075817620.html)