Joel Kaartinen
Sep 2, 2018 · 1 min read

Cryptocurrencies are likely attractive from social network companies perspective in that by using a cryptocurrency the companies can avoid managing aspects of the payments system that invite heavy (and expensive as well as limiting) government regulation.

For starters, just imagine if you had to fill in documentation on the level that a bank requires, just to use the social network. They’d have to require that from their users *before* they could legally offer any payments solution.

They’d instantly lose a lot of their users.

The interest in using Cryptocurrencies for this is that, that way, it’s possible to integrate payments to their network without actually touching the parts of the payment system that invite all of the heavy regulation.

A part of the reason WeChat became so widely used for payment so fast is that most people were already using it and when someone started using it for payments, they were instantly and easily able to pay anyone else who used it.

Psychologically speaking, it’s much easier to accept a payment from someone through a new system than it’s to actually deposit money there yourself to use the payment feature. But either way, it ends up with money there ready to be used to pay someone else and the critical “hey! this actually works!” step is done.

When you’re legally required to KYC every user before you can even allow them to receive payments, that advantage of easy onboarding doesn’t exist. Hardly anyone wants to fill in a KYC questionaire just because someone else wants to pay them in some funny way.

    Joel Kaartinen

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