Why Facebook’s Pivot To Privacy And Cryptocurrency Is Both Cynical And Scary
By Rich O'Connell on ALTCOIN MAGAZINE
Mark Zuckerberg Can See Around Corners.
In 2012, when he saw that Facebook was being threatened by the rise of photo sharing apps with image filters, he bought Instagram. It was expensive at the time but now looks like the best acquisition in corporate history. After missing the mobile operating system wave, which Google won when they bought Android, he acquired VR company Oculus. This was to ensure he didn’t miss the next big computing platform. As he saw the rise of a small group, private sharing, he bought Whatsapp for a record $19 Billion (estimates of current value vary, but could be as high as $100 Billion). He clearly knows what he is doing.
Facebook’s (which really means Zuckerberg, as he has majority voting control) move into crypto and privacy is not a reaction to anything that has happened over the past few years. This is a well reasoned and methodical shift, designed to ensure Facebooks long-term success, profitability and to make it an even more central part of our day-to-day lives.
But Privacy Is Good, Right?
In many cases yes. In the case of Facebook though, we need to dig a little deeper. Firstly, it reduces their responsibility to moderate the content on their platform. If all of the content is private and encrypted, why would they need to hire thousands of human content moderators? The headcount cost savings will be in the millions of dollars. Another benefit for Facebook is that it will help to strengthen their “we’re a platform, not a media company” stance. This will further absolve them of responsibility for any content that is shared across their products. Finally, this will make it even harder for law enforcement to use Facebook as a tool in enforcing the law. In the same way that Apple refused to decrypt their hardware to help the F.B.I., Facebook will be in a position to make the same argument about their software tools. This is a trend that should concern us.
So What About Libra, The Facebook Cryptocurrency?
I think this is both a master strategic move by Facebook and a depressing sign of the future world they envision for most of us. I believe this is their hedge against the oncoming regulation, and their response to the widespread job destruction they see coming in the next decade.
It’s not new that many people believe that Artificial Intelligence, and the rise of the gig-economy, is going to lead to some major changes in employment for the middle-class in the coming years. Many silicon-valley luminaries have been preaching that a viable response to this is the concept of universal basic income. In simple terms, it means each gets a small amount of money each month, from the government, to cover living expenses, whether you are working or not. In their own words:
“There is a pretty good chance we end up with a universal basic income, or something like that, due to automation.” Elon Musk, 2016
“Basic income is going to be all the more important.” Richard Branson, 2017
“We should explore ideas like universal basic income to give everyone a cushion to try new things.” Mark Zuckerberg, 2018
Some tech companies are even experimenting with programs to see how schemes like this could be run.
I think the story that Facebook sees playing out here, goes something like this:
- Facebook faces some kind of regulation, likely as a public utility. Zuckerberg has often spoken of the company this way.
- In the long-run this could actually help Facebook's business as now they could collect things like Social Security Numbers, and add that to their data-stockpile.
- At some point, the idea of Universal Basic Income gains traction. A city or a state decides to run a pilot program and aren’t they lucky that a public-utility exists, with a secure payment mechanism for distributing these payments?
This would cement Facebook as one of the most important actors in our civil lives.
The whole concept of universal basic income, means we are throwing in the towel before the race has started. We have had many periods in the past where we had unemployment and economic struggles and we worked through those with job creation and retraining programs like the New Deal post World War One. It has been programmed, and a vision for the country, that are optimistic and progressive that has led to the period of innovation that we have now. Relegating entire generations of children to schemes like Universal Basic Income feels like we are waiving a white-flag already.
So What Should We Do With Facebook?
Regulation is needed, but it should be the right kind of regulation. One piece of legislation, which would increase competition overnight is to force Facebook to allow access to their friends-graph. This is the moat that ultimately stifles competition. If you think about it, how would another social media company attract new users to their new product, if they are already all connected on Facebook? Allowing access to this web of connections, and their data, would cause a whole new wave of social apps to emerge, many of them likely focused on more social good, and less on advertising.
There is a precedent here with the large Telecommunication companies. At one point they had a monopoly in pricing and service offerings due to the fact that they owned the physical cables connected to their customers. Then, the regulation came in saying they needed to allow other companies to access those cables, but they could earn a fee for their usage. This is now happening with high-speed internet infrastructure. All of these companies have thrived and so have a new generation of smaller companies who offer more local, niche services.
This is the kind of competition we should be aspiring to as we work through what to do with Facebook.
