What Will Facebook’s Cryptocurrency Mean For Privacy?
By India Bottomley on ALTCOIN MAGAZINE
In recent years, the amount of data websites have access to has become a growing concern for users. From high profile hacks to location information that enables developers to build a clear image of how users live their daily lives, it can feel like consumers are carrying around a little spy in their pocket. When Facebook first launched, it was seen as an innovative way of connecting and staying in touch with people, but since then, it has grown into an almost unrecognizable platform that some fear is geared more towards allowing companies to have access to data that enables them to build ‘data selves’ down to the minutiae. Today, cryptocurrency industry websites are abuzz with talk of Facebook’s own currency that is reportedly due to launch in 2020. The ‘GlobalCoin’ will put Facebook’s fingers into yet another pie and will be a stablecoin tied to a few currencies in order to avoid market volatility.
Facebook has seen its fair share of controversy in the past couple of years, the most prominent being the probe into the influence the platform has following the possible effect adverts on the site had on the 2016 U.S. election. Consumers are growing more cautious about what they share online, and are growing increasingly aware that their data is being used by companies to make money. Whilst Facebook is taking steps to improve consumer confidence, critics have voiced their concerns about how much information the company will have access to if users were paying for goods and services with GlobalCoin. According to the BBC, the stablecoin is likely to launch in some areas as early as the first quarter of 2020, before being launched more widely.
It has been reported by the Financial Times that Facebook founder Mark Zuckerberg has been in talks with regulators in the U.K. and the U.S. to discuss compliance for the proposed system — a step that already sets GlobalCoin on a different trajectory to Bitcoin that launched in a very much unregulated market back in 2009. The launch could be a nail in the coffin for Facebook if they do not take adequate steps to protect users’ data when they use the currency. There are concerns that Facebook’s interest in launching a currency is fueled more by the amount of consumer data that could be collected through being able to closely monitor transactions than from an interest in entering the financial services sector. Facebook would need to adopt a fully decentralized model in order to curb these concerns from the outset.
The chances of GlobalCoin being a profitable venture for Facebook are reliant on a number of factors, but initial information would indicate that profit made directly from this product is not the primary goal at least for now. Consumer confidence will be the deciding factor in whether or not the currency is widely adopted, but the company will need to make it clear from the outset what types of data they are collecting and how it is used in order for consumers to adopt the currency. Let’s not forget that the initial draw of bitcoin for many was the fact that the currency’s movements would not be linked to the person’s real-world identity, something that would, in theory, be impossible for Facebook users. There is also still a level of caution on behalf of mainstream consumers, a category which the majority of Facebooks users would fall into when it comes to adopting cryptocurrency and understanding blockchain technology. If Facebook can launch the new product with sufficient security and privacy provisions, along with educational materials for consumers who otherwise would not be exposed to the world of cryptocurrency, then GlobalCoin could really take off, but ultimately the currency’s success will lay in the hands of Facebook’s 2.38 billion users.