Facebook Moves into Blockchain and Here’s Why
Facebook is moving into the blockchain or at least studying the technology in the larger and deeper perspective. According to Recode, the company is setting up a dedicated internal team to explore blockchain technology. While the team is very small at launch, the people within the team are some of the heavyweights within the organization.
Former PayPal CEO, David Marcus, who heads Facebook’s standalone messaging app, Messenger, will lead the team. He’ll be joined by the top level executives like Instagram’s VP of Engineering, James Everingham, and Instagram’s VP of Product, Kevin Weil. The team is dedicated with a single mission of exploring blockchain, its potential, and above all, finding the right opportunities for Facebook in the blockchain.
Why is Facebook Studying Blockchain?
While the announcement remains vague at large, a number of analysts are curious at the core objective, given the involvement of notable executives like Marcus. In his 2018 mission statement, Mark Zuckerberg did write that he was interested in studying the "positive and negative aspects" of the decentralized technologies like blockchain and cryptocurrencies.
So far, there are three opinions.
First, blockchain is a big threat to Facebook as it’s totally opposite to its nature – centralized vs decentralized. If blockchain becomes widely accepted or social networks powered by blockchain become popular, Facebook has a lot to lose. This is particularly true following the success of Telegram – the messaging app, both in terms of attracting (over 200 million) users and securing huge funding via ICO.
Secondly, the recent controversy involving Facebook and Cambridge Analytica has hit the company’s credibility and ability to protect consumer data. One potential area of interest (for Facebook) could be to explore the data protection opportunities that blockchain offers. Can it help Facebook avoid a similar episode in the future? What if the company offers users full and unrestricted control over their data?
Tertiary, Facebook may want to explore some product development opportunities using the blockchain. Who knows a version of the social network with centralized stuff and the other with complete control of users in their hands?
Whether blockchain can exist on Facebook or not is still a question. A digital payment solution for its messaging apps (Messenger and WhatsApp) could be another starting point. Taking a note from Telegram, it could help users buy and sell goods/services using the same without leaving their app. With FinTech background, David Marcus could surely come up with something truly innovative.
What Does It Mean for the Market?
Facebook’s decision to pursue blockchain technology is a very positive news for the market, and will most certainly add some validity to the crypto industry. While there’s no indication of the social networking building own currency, but its pursuit of the technology will increase trust and potential adoption by enterprises.
If we specifically talk about data encryption and security, blockchain could of extreme help, and a number of leading organizations are studying it from a pure security perspective. Moreover, such a move could set a trend in the social networking companies to develop a deeper understanding of the technology and its potential for their respective platforms.