Facebook has formed a blockchain team staffed with high-profile executives. Blockchain technology could help to restore brand confidence and Facebook could even launch a crypto payments system.
Facebook is a master at keeping their internal projects secret. However, there have been several hints that the company is investigating blockchain use cases.
Yes, this is the same company that sold our privacy for a quick buck. The same company that derives billions of ad revenue from its centralized data monopoly. Could they be working on a blockchain-based, decentralized social media platform?
That’s highly unlikely.
But even though Facebook and decentralization sounds odd, they must at least be looking at it. All big tech companies are investigating potential use cases of the technology, so simply ignoring the trend is not an option.
Even though we don’t know what exactly Facebook is working on, we can make some qualified guesses.
High-profile staffing indicates movement
In May 2018, Facebook has formed a new team dedicated to blockchain technology. It’s a small team, but staffed with high-profile Facebook executives.
David Marcus, who has previously been running the company’s successful standalone messaging app, is heading the team. Instagram’s VP of Engineering, James Everingham, and Instagram’s VP of Product, Kevin Weil, are also on-board.
Hence, Facebook seems serious about it. Why would you have some of your best horses in the race if there was nothing to win?
A decentralized social media platform? Unlikely.
One thing is for sure: Facebook is not going to commit suicide by creating a decentralized social media platform. The company’s entire business model is based on collecting users’ data for targeted ads. They have no interest in storing user data on a secured blockchain which they cannot access themselves.
In fact, Facebook is so blockchain-paranoid, they even banned crypto and blockchain ads on their platform. They have revoked this ban in the meantime, but it’s still hard for blockchain businesses to advertise. All to the benefit of the user … of course!
However, there have been several attempts by other companies to create decentralized social media platforms. Steemit, where users are rewarded with cryptocurrency unites instead of Likes, is the most prominent example. None of these platforms have reached any significant size yet.
Facebook might be looking into the perks which these other platforms offer, and ways how to integrate some of it into Facebook.
Restoring brand confidence
Now that we have discussed what Facebook is NOT going to do, what could they do instead?
A blockchain initiative could be a way for Facebook to restore confidence in the brand.
The company has gotten a hit after the Cambridge Analytica scandal, and lawmakers are looking for ways to regulate Facebook and keep its power in check.
Facebook wants to avoid this at all costs. Thus, blockchain could be a way for Facebook to polish up its corporate image.
It’s therefore entirely possible that Facebook is looking for ways how to improve data security and transparency via blockchain technology.
But make no mistake, they will still try to get your data without telling you how they use it. That’s their core business. But they might give up some of their current practices, or at least pretend to do so.
Facebook could also be looking into a blockchain-based payments platform. The company could build a crypto wallet with its own token, allowing users to pay for products and services which they discover through Facebook ads. This way, Facebook and its partners could sidestep credit card processing fees.
Facebook is reportedly also seeking data partnerships with banks, which indicates the company may have financial services ambitions. Considering Facebook’s scale and technical know-how, that would not be out of reach.
Mark Zuckerberg himself has made statements regarding cryptocurrencies. In January 2018, he mentioned cryptocurrencies when disclosing his annual projects for 2018:
“There are important counter-trends to [the rise of Big Tech] — like encryption and cryptocurrency. I’m interested to go deeper and study the positive and negative aspects.”
David Marcus, head of the newly established blockchain team, has previously worked with PayPal and was sitting on the board of Coinbase. He has recently resigned from this role, citing a potential conflict of interest. He said his decision to resign was “because of the new group I’m setting up at Facebook around blockchain”.
Looking at Facebook’s patent history, the company has already been pursuing the idea of digital currencies in 2007, even before the Bitcoin launch.
At the time, the company has applied for a patent for “giving gifts via a social network and displaying icons representing assets … the assets include real assets, digital assets, and virtual assets.”
Considering Facebook’s massive user base, the company would also have a serious advantage in coin distribution.
Even if we don’t know what exactly they are going to do next, there a many ways how Facebook could use blockchain technology.
Facebook might even take the recent allegations seriously and start rethinking their business model. The company could create blockchain-based applications to fundamentally reshape the way how they deal with data privacy and security on the platform.
Or Facebook’s blockchain team could simply be a PR stunt, or a juicy bit of corporate politics. Only time will tell.
Apple doesn’t sleep either. Find out more in our article. <Apple and Blockchain<