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Is Jack Dorsey’s Bitchat simply a chat application, or is it an exploration of what a digital society could look like without central authority?
Summary
- Jack Dorsey’s innovative messaging platform Bitchat is transitioning from short-range Bluetooth mesh to a location-based chat system, organizing users by geohashes and assigning temporary pseudonyms.
- Bitchat incorporates payment options directly within messaging, offering possibilities ranging from spam mitigation to local trade, while supporting Bitcoin’s ideals of privacy and resilience.
- There are challenges concerning Apple’s in-app payment guidelines, privacy concerns due to repeated geohash usage, the declining visibility of Lightning’s total capacity, and the sustainability of independent Nostr relays.
- The app’s evolution into a functioning local economy or its permanence as a proof of concept hinges on user engagement, platform regulations, and relay economics.
Bitchat transitions from offline mesh to urban communication
On August 21, Jack Dorsey revealed that Bitchat, his novel messaging platform, will introduce “location chat,” enabling users to join local chat rooms according to their geographical area.
The system employs geohashes, which convert GPS coordinates into grid squares that correspond to neighborhoods, communities, or larger areas. Each grid assigns a temporary pseudonym to users, ensuring that their identities remain distinct from phone numbers or accounts.
Messages are relayed through Nostr, a decentralized protocol that Dorsey has endorsed for years, which also facilitates Bitcoin transactions. The update is currently pending review by the App Store.
Bitchat was initially launched just a few weeks prior, on July 6, when Dorsey released the beta version through Apple’s TestFlight along with an extensive white paper.
The inaugural version permitted message transmission via Bluetooth within approximately 300 meters, creating mesh networks that function even without internet or cellular connectivity.
The technical design incorporated Curve25519 for key exchanges, AES-GCM for encryption, alongside features like file fragmentation, duplicate suppression, and an emergency mode that deletes all data instantly.
On July 9, Dorsey acknowledged that the code had yet to undergo an independent security audit, emphasizing that the project was still in its nascent stage.
With the upcoming feature, Bitchat is evolving from limited offline messaging to a broader, location-driven communication approach, reflecting the same fundamental principles that guide Bitcoin (BTC), such as open participation, foundational privacy, and independence from a single entity for system operation.
A system supported by three independent components
To grasp how Bitchat functions, it is essential to examine the three core elements that sustain it: geohashes, Nostr relays, and Bitcoin payment channels. Each plays a distinct role in maintaining the system.
A geohash is a straightforward concept. It transforms your latitude and longitude into a concise code composed of letters and numbers.
Instead of pinpointing an exact GPS location, it locates you within a grid. The length of the code determines the size of the grid.
For instance, a six-character geohash encompasses about one square kilometer, sufficiently grouping individuals within the same neighborhood while safeguarding their precise locations.
In Bitchat, this grid can be visualized as a chat room, where all participants receive a new pseudonym that resets upon moving elsewhere. After entering a room, messages are transmitted through Nostr, an open protocol for decentralized messaging.
Unlike WhatsApp or Telegram, which rely on corporate servers, Nostr depends on independently operated relays. Anyone can manage a relay, and users have the freedom to select which relays they wish to connect to.
If a relay fails, the network remains operational because there is no central server to deactivate. This model is designed for resilience and open accessibility.
Payment functionality is already integrated into this framework. Nostr has established standards known as NIPs, two of which are particularly significant here. NIP-57 outlines “zaps,” Lightning tips recorded as events on Nostr, while NIP-47 discusses “Nostr Wallet Connect,” enabling secure communication between apps and a user’s Lightning wallet.
This means that if Bitchat permits payments, users could provide tips, incur minor posting fees, or facilitate micro-transactions in real-time utilizing Bitcoin’s Lightning Network.
These components—geohashes for location, Nostr relays for message transportation, and Lightning for payments—constitute the foundational aspects of Bitchat.
All of these are proven ideas. Geohashes are commonly used in mapping, Nostr has been operational since 2020, and Lightning processes millions of small transactions every month. What Bitchat aims to achieve is the integration of these elements into a singular, practical application.
What cryptocurrency offers that standard chat applications cannot
While Bitchat could operate as a conventional messenger, its significance in the cryptocurrency realm lies in the fact that payments are inherently part of its foundational protocol.
Nostr, which Bitchat reportedly uses for message relaying, natively supports Bitcoin’s Lightning Network, opening new use cases that typical chat applications cannot provide without incorporating external services.
A clear illustration of this is spam control. Most messaging services combat spam through phone number verification, identity checks, or moderation teams.
On Nostr, users frequently utilize “zaps,” small Lightning tips starting at just a single satoshi. Certain communities already mandate a minor fee to post, which is negligible for authentic users but deters bots and mass spam.
In Bitchat, this could work at the level of local chat rooms, where a refundable micro-fee is sufficient to maintain clean conversations without needing central moderation.
Another potential area is local commerce. In 2024, Nostr clients such as Damus processed millions of Lightning zaps, indicating that users are comfortable sending minimal payments within applications.
When applied to location-based chat, this behavior might transform into tipping street performers, compensating neighbors for services, or posting small bounties for quick assistance.
Since Lightning transactions are settled instantly and can be as minimal as a fraction of a cent, they are well-suited for casual exchanges that traditional banking systems find too insignificant.
This model could also enhance resilience during outages. In regions with restricted or unreliable internet access, Bluetooth mesh can still convey messages over short distances, while Lightning facilitates value exchanges without needing to wait for banks to recover.
Historical events have highlighted the necessity for such tools. During the 2019 protests in Hong Kong, there was a significant surge in downloads of mesh apps like Bridgefy due to their functionality without cell service. A system like Bitchat could theoretically provide the same advantage, but with integrated financial capabilities.
Furthermore, transactions on Nostr are becoming increasingly private. Certain wallets are now utilizing Cashu, which generates anonymous Bitcoin-backed tokens. This has the potential to allow Bitchat users to make payments within location rooms in a manner as untraceable as exchanging physical cash.
The practical challenges that will determine Bitchat’s future
For Bitchat to transition from an experiment to a practical tool, it must navigate several real-world obstacles.
The first concern is platform policies. In 2023, Apple mandated that the Damus client, another Nostr-based application, remove Lightning “zaps” from individual posts on iOS.
Apple only approved tips to be sent at the profile level, contending that payments linked directly to content could circumvent its in-app purchase regulations.
If Bitchat enables pay-to-post or tipping within location rooms, it may encounter the same limitations. Without a workaround, Apple’s policies could inhibit the app from delivering the features that distinguish it.
The second challenge involves privacy and safety regarding location. Although geohashes are designed to obscure exact GPS points by aggregating users into larger areas, studies have demonstrated that consistent activity within the same grid can still disclose patterns over time.
Even if precise locations remain concealed, ongoing engagement could reveal where an individual resides or works. Bitchat attempts to mitigate this by assigning a new pseudonym for each geohash; however, safeguarding anonymity at scale will prove more complex than it seems.
Additionally, there are concerns about the current visibility of Lightning. Public channel capacity has declined from approximately 5,400 BTC in 2023 to around 3,800 BTC as of August 2025.
Critics argue that this indicates weakening usage, while developers suggest that capacity is not the most accurate indicator, given that modern wallets route payments more effectively, maintaining success rates above 98%.
Both perspectives hold significance. While the network operates successfully, external commentary regarding decreased capacity may shape how others view the reliability of payments on Bitchat.
A further challenge lies in the economics of relays. Nostr is reliant on independent servers, or relays, to transmit messages. Temporary events, such as those used for geohash chat, lessen storage requirements but still necessitate recurring bandwidth and uptime.
If only a few well-resourced relays dominate urban traffic, the system risks reverting to a centralized model. The method through which these relays sustain themselves—be it through fees, contributions, or integration with Lightning payments—remains to be determined.
Consequently, the application will need to find solutions to align with platform regulations, safeguard user privacy, uphold trust in payments, and ensure that relay operators have incentives to sustain the network.
Overall, these challenges frame the experiment clearly. Bitchat will reveal whether it’s feasible to intertwine local interactions with Bitcoin payments in a private, robust, and practical manner.
If user engagement increases, payment systems function reliably, and platform obstacles are navigated, the application could mark a significant step towards establishing a social layer built on the same tenets as Bitcoin.
If not, it may remain a proof of concept—valuable for its insights but not yet suitable for widespread adoption.
