Facebook Bullish about Blockchain
Yes, you heard that that right. “The” Facebook is getting serious about blockchain and cryptocurrencies. Earlier last year, it was reported that Facebook set up a team dedicated in exploring blockchain technology – to investigate how they can get into it.
Mark Zuckerberg even mentioned cryptocurrency when disclosing his annual project 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.”
Typical Zucks move right? Addressing Facebook’s greatest threat like it did when it spent 1 billion dollars to aquire Instagram (1 BILLION DOLLARS for a barely 2 year-old company with no revenues) and a whopping 19 billion dollars to acquire WhatsApp.
David Paul Morris | Bloomberg | Getty Images
Don’t expects Facebook to do crazy large scale multibillion dollars moves with blockchain yet.
Facebook has already started working on a new cryptocurrency for global payment through WhatsApp in a form of a stablecoin – a cryptocurrency meant to hold stable values unlike Bitcoin or Ethereum for example, which are highly volatile. This stablecoin will run on a blockchain platform that Facebook will build from scratch. It has been reported that they plan on implementing the use of this stablecoin starting with India, enabling its WhatsApp users to make small payments via the network. The plan won’t come to fruition anytime soon as they’re still strategizing and testing different use cases of this technology.
Okay, why the heck is Facebook into blockchain?(My speculations and that of tech commentators)
• For one, in the short term at least, blockchain pauses no threat to Facebook and the technology is not yet mature, but it could be in the future.
• They might leverage the technology to create some sort of identification service backed by blockchain.
• Facebook has billions of users. With the implementation of a service that enables people to make payments using a stablecoin through Facebook, imagine the value they can create for all those people…Especially to the hundreds of millions of people who are unbanked.
• Facebook might be getting into blockchain as a way of combating the stigma that it’s a big company that keeps on profiting at our expense. Issuing tokens to their users might give or at least give some appearance of power to its users.
• The cryptocurrencies payment method is most efficient method to make micropayments. This will prove the best way to send micropayments for services or payments to content creators. Imagine if all of your Facebook friends and/or followers had the means to pay you for making that funny meme…
Challenges
• They’re having difficulties finding talented recruits in the blockchain ecosystem, this is understandable because the blockchain space is still in its infancy.
• A lot of people don’t trust the Facebook brand, especially people in the blockchain/crypto world. A lot of them got into this industry because of the misuse of data by big players such as Facebook and Google.
• It will take a while before Facebook actually build a blockchain from scratch because of reasons stated on the first bullet point (Who knows? Maybe they will pull another acquisition move by buying out established or promising blockchain companies).
• Scalability issues – self-explanatory if you’re familiar with how blockchain works.
You’re probably wondering what the big deal is. Facebook is getting into the long train of major tech players that are getting into or at least are showing some serious interest in blockchain. Amazon, IBM and Alibaba are just few examples of those major players. This reassures us (entrepreneur, developers, civilians) that blochchain technology must be taken seriously and we must each invest in it in a long term, I don’t mean by buying crypto (which you can if you want) but I mean by investing deeply and getting the know-how, finding out about how you can contribute or improve the technology. We’re seeing signs that it will get adopted at a mass scale, it’s only a matter of time.
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