Should Facebook Pay Everyone Cryptocurrency for Data?
As most revolutionary projects do, it started out as a rumor. Facebook started hiring for a secretive new department, and everyone who joined it was required to sign non-disclosure agreements. Kept sequestered away from the rest of the business, this mysterious new project definitely got tongues wagging in Palo Alto. Of course, as everyone knows, this new project was taking form right about the time that the company was suffering from some of the worst PR it’s ever received. With privacy issues abounding and the #DeleteFacebook taking over Twitter, it definitely wasn’t a great time for the tech giant. But it wasn’t long before the purpose of the new initiative started to leak out into Silicon Valley. Facebook was building its own stablecoin, a type of cryptocurrency tied to the U.S. dollar.
Attracting Some of the Best Tech Talent Around
It’s not hard to see why so many job candidates were drawn to positions in the new department. It turns out that many people in tech want to become a part of the blockchain, which is the next big thing right now. For those who missed out on the mobile revolution, joining the crypto craze may eliminate their FOMO. Furthermore, working at Facebook is a safe way to pursue this passion. It’s the perfect blend of both worlds — a secure position with a solid tech company that’s also working on something groundbreaking in the blockchain world. The best and the brightest are involved with this project, which makes sense. Interest has been piqued so much that an intriguing page on a website called The Block popped up; one of its main purposes is to monitor what kind of positions Facebook is staffing in this new department.
Crunching the Numbers
Recruiting excellent people has been relatively easy and the team already boasts over 30 members, not to mention the 50 engineers who are said to be working on the initiative. Word on the street was that a former Coinbase board member, David Marcus, was resigning from his post so as not to have any conflicts of interest. This was promising news for those who see this new initiative really taking off. The fact that Facebook was able to attract so many good employees during what has been deemed “the crypto winter” is very telling. Even though the market has been down, savvy people still have faith in the power of blockchain technology.
Addressing the Issue of Adoption
One of crypto’s major issues right now is that a lot of people don’t know how to acquire it, use it or store it. After hearing stories of Bitcoin crashes in the news media, many are also afraid of losing their investments. Facebook solves both of these problems. By creating a stablecoin that is tied to the U.S. dollar and other fiat currencies, it eliminates the risk that is usually associated with investing in crypto. Additionally, it makes it easy for people to put crypto to use in the real world. Facebook’s massive network of 2.2 billion users will not have to download complicated crypto wallets or even visit exchanges. Everything will be available to them, ready to go whenever they’d like.
The Crypto Community Reacts with Skepticism
Of course, there are many in the crypto community who do not see Facebook’s move into the crypto realm as a good thing. Many wondered what the point would be, especially since anonymity is crypto’s main selling point for many enthusiasts. Trading crypto through Facebook would depend upon the type of centralization that many in the community do not support. Many pointed out that we have yet to see a stablecoin truly take off thus far. Tether, which is perhaps the most high-profile stablecoin project out there, has been plagued with difficulties. Perhaps the most telling sign of the community’s ambivalence, however, was the fact that many of the big influencers on crypto Twitter failed to post about it at all.
The Biggest Shift Since Mobile
For Mark Zuckerberg, taking Facebook mobile was a complex process that characterized one of his company’s most dramatic transformations thus far. Back in 2017, he wrote that one of his biggest goals was to gain a greater understanding of encryption and blockchain technology. Since then, it would appear that Zuckerberg has done his homework. And he currently believes that creating the new stablecoin will essentially be version 3.0 of Facebook — the first version being the website, the second version being the app and everything that came with it, and the third version making Facebook into what essentially amounts to a payment processor. As with all of his new innovations, he does not plan on settling for second place when it comes to this new era. He’s already put forth a bold vision for Facebook becoming the top payments system in the world. Perhaps it is telling that he chose David Marcus to spearhead the project; after all, Marcus comes from PayPal. All signs would indicate that Zuckerberg is taking this new project extremely seriously.
A Bold Array of Implications
There are a number of ways in which we might see a stablecoin working on Facebook’s platform. First, there’s peer-to-peer. What if, instead of sending you a birthday card with a check in the mail, your grandma was to send you some coin through Facebook? Many people spend a great deal of time communicating on Facebook anyway. Why should they have to leave the platform when they want to go make a payment? Of course, since it’s crypto, trading would be another attractive option, as well as perhaps even lending. People could use the stablecoin to pay for services from their hairdresser, for instance, or even buy a new t-shirt. With so many different implications, it feels as though this coin could really take off. Even if it only succeeds in one area, it will still be considered a rousing success.
WhatsApp, which is owned by Facebook, is now believed to be an integral part of the company’s new blockchain strategy. Confidential sources have been indicating that this is where the coin will be tested first. With its eye on the prize, Facebook has confidently been marching forward. Already meeting with crypto exchanges to discuss listing the coin, it would appear that the project is full steam ahead. It’s worthwhile to note that Facebook isn’t the only game in town at this point. Telegram and Signal, both of which appeal to more advanced techie types than Facebook, have both begun working on their own coins. With so much secrecy swirling around all of these projects, though, it has been difficult to get a real read on what they’ll be offering. Some believe that Facebook is making it a priority to create a coin that can be traded on and off the platform, but it’s too early to tell at this juncture.
A Game Changer for Developing Countries
For people in the United States, the new Facebook stablecoin would probably add a healthy dose of convenience to their everyday lives. But for those in developing countries, the quick access — to a currency that jumps international borders with ease — could transform their lives. Already, some fintech experts are positing that Facebook’s new stablecoin could even become the preferred currency in several nations. At this point, it seems as if this is a wildly lofty vision of the future. However, it’s crucial to note that Facebook has historically moved very quickly when it comes to disruption. Before the Arab Spring, there were many who perhaps downplayed its ability to become a leader on the world stage.
Will Facebook Find Itself Bumping Up Against Regulations?
Not everyone expects this process to be smooth sailing. Although the stablecoin will not be beset by issues that arise with intensive mining, it may find itself the victim of regulatory oversight. With certain altcoins and tokens, the American government has stipulated that it wants them to be classified as securities. It wouldn’t be unusual for other countries to become threatened as well, especially if they see the very existence of their national currency being threatened. One imagines that Facebook is gearing up for the multitude of bureaucratic headaches that could come its way. With so many governments potentially entangled in this new initiative, Facebook will be dealing with unprecedented hurdles. At the end of the day, whether or not they succeed may depend on factors that haven’t even been imagined or considered as of yet.
Facebook’s Brave New World
If Facebook manages to pull off this practically impossible task, its power will increase exponentially. Although the company has run into some bad PR as of late, the fact remains that it boasts the most engaged database on the planet. And with payment systems taking off, such as WeChat in China, the future seems very bright indeed. Although it’s impossible to prognosticate what will happen when those first remittance payments start flying through the WhatsApp system in India, we do know that it doesn’t seem possible for the payment world to go back to the way it was before cryptocurrency became widespread. Whether Facebook trades its stablecoin strictly within the platform or lists the coin on outside exchanges, it would be almost impossible to put the genie back into Aladdin’s lamp. Just as there were many who were betting against Facebook when it went public, there will be naysayers who malign the new initiative constantly. And with so many details of the project still obscured from public view, chances are that there will be more than a few surprises hidden up Facebook’s sleeve. The world will be watching.
