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What could Facebook’s focus on blockchain mean in the near future
Photo by Glen Carrie on Unsplash
Photo by Glen Carrie on Unsplash
Facebook has had a rough time lately. Even before the broader market crash began last year, Facebook stock was already significantly down from it’s All Time High of $218. The constant privacy leaks and data controversies have rocked investor confidence and the #deletefacebook movement picked up steam, with even ex-Facebooker and WhatsApp co-founder Brian Acton tweeting the same during his departure. Something needs to change if the Facebook story is going to get a better ending.
There has been a love/hate relationship with Crypto and Facebook. When Facebook banned all crypto ads, it seemed very straightforward that they would not be taking part in the crypto madness of 2017, even if it meant missing out on a healthy revenue source. However, that all changed when they lifted the ban on cryptocurrency ads and also created their own blockchain group.
There have been a few moves and rumors that confirm a recent surge in blockchain activity at FB HQ. Is there something really going on or is it all a ploy in a an attempt to boost short-term stock price? Lets take a look at what is likely to happen, what might happen, and what definetely wont happen.
Facebook launches a Stablecoin using WhatsApp, targetting the Indian market first
This was first reported as a possibility by Bloomberg
Facebook has the largest user-base in the world. Issuing a cryptocurrency would bring about a huge push towards adoption throughout the world. WhatsApp could start to get WeChat like features, where users could pay for things directly from their phones or send money to their family around the world. Facebook currently has 40 employees with the word blockchain in their title according to LinkedIn. Apparently sources are saying that
Why this would happen: Instant user base and little to no execution risk. Stablecoins don’t even need to be on a blockchain and Facebook has done something similar when they had Facebook Credits
Why this wont happen: They HAD Facebook Credits. And it failed miserably, officially cancelled in 2013. Any StableCoin would resemble this and there really is no need for it, but we’ve got plenty of that around the blockchain space.
Likelihood: 3/10
Facebook Acquires Coinbase
This was first reported as a possibility by the Economist
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Thrilled to join the @Coinbase Board! Looking fwd to doing my best to help @brian_armstrong and the amazing team he's assembled, continue to democratize access to cryptocurrencies, and deliver on the mission to create an open financial system for the world https://t.co/CDGPu4RhYO
What we know for sure is that David Marcus, who used to Head up Messenger at Facebook, is now in charge of the Blockchain team at Facebook. He used to be on the board at Coinbase and he used to work at PayPal. Coinbase was recently valued at $8Billion, and this was even during the downturn in the crypto market. Facebook has had a bad history with acquisitions, with the founders of WhatsApp, Oculus, and Instagram all appearing to not have enjoyed their time at the House of Zuck.
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I'm calling it now...Facebook will buy Coinbase and integrates it to serve their $2+ Billion users to accelerate the digital currency revolution.
Why this would happen: As Anthony Pompliano points out, it would accelerate the adoption of cryptocurrency and Coinbase is the best retail on-ramp there is in the US. Coinbase has a great history of being compliant and in good standing with US regulators which would definitely help streamline the interation. Plus they already have the white and blue theme.
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As predicted: the on ramps and off ramps (exchanges) are going to start censoring not only companies, but also individuals. @coinbase has now banned both Gab's merchant account and Andrew Torba's personal account. Decentralized exchanges are the future.
Why this wont happen: Coinbase is doing really well, and they are expensive. An acquisition outside of Facebook’s core competency would be very risky at these levels, especially with the uncertainty of the market as it is today. Plus Coinbase has recently had their own issues with censorship after shutting down the accounts of Gab and it’s founder. Add to that that their recent acquisitions havent ended on the greatest terms and this seems like a great match we wont see anytime soon.
Likelihood: 5/10
Facebook starts there own Identification Solution for Blockchain
One of the key areas that Facebook leads in is identification and easy sign-in processes with the Facebook login API. Plenty of blockchain projects like Civic and Evernym are tackling this problem. With not only the world’s largest user-base but also the most used sign-in process for other services, Facebook is in a unique position to take the lead in blockchain identity solutions.
Why this would happen: No one is better at doing this than Facebook is and it’s an area that most agree fits nicely into a blockchain solution. It’s necessary and it needs the blockchain. KYC and login could become even easier, and this could extend into more offline services like Driver’s License and Passports. It’s a large industry with little competition to Facebook’s dominance.
Why this wont happen: Facebook isn’t in the best place with public perception and data/privacy trust. This might have been a great move a year ago, but today the stories are still fresh. The monetization model isn’t as apparent as the previously mentioned opportunities and probably not as big.
Likelihood: 7/10
Facebook launches a Proof-of-Work coin
With the largest user-base in the world, Facebook has alot of manpower at their disposal. By studying gigantic amounts of user data, they can figure out exactly what real work looks like and what a bot acts like, helping bring a new version of Proof-Of-Valuable-Work. Users could mine coins by labelling photos correctly, helping the A.I. vision industry, or provide corrections to translations for translation software. The micro task army can support a truly decentralized currency for the world where everyone contributes to mining.
Why this would happen: I don’t know
Why this wont happen: There are way too many flaws in this logic, but it’s a great sci-fi story isn’t it? I hope you were entertained with it as much as I was in writing it
Likelihood: 0/10
What does BitcoinTalk think:
Facebook Is Developing a Cryptocurrency for WhatsApp Transfers, Sources Say
Going through the thread you’ll see alot of skepticism that Facebook will do anything, let alone something that would be accepted by this crypto-savvy crowd. A few people say they would never use a Facebook-anything-chain. Some think it will be great in driving adoption.
FaceCoin, ZuckBucks, or BlockBook was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.
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