When news leaked in May that Facebook was forming a team around blockchain, there was little of substance for the curious to sink their teeth into. It was revealed that David Marcus, the former head of Facebook’s Messenger platform, was stepping down from his board post at Coinbase to lead the team – a natural choice, as former president of PayPal and overseer of Messenger’s chatbot commerce and peer-to-peer payment functions.
There has been minimal additional news – a company spokesperson told TechCrunch that Facebook is “…still in the very early stages [of developing the team] and we are considering a number of different applications for the blockchain. But we don’t have anything else to share at this time.” That has not stopped speculation about what they might work on, however.
Some parties believe that Facebook could introduce its own token and cryptocurrency wallet, which people could use to pay for products linked to through Facebook ads or from partnered businesses. Blockchain makes transaction fees minimal (or even zero), so Facebook could use the increased margin to offer promotions encouraging users to adopt its cryptocurrency. It is uniquely positioned to leverage its relationships – the platform features six million advertisers and 65 million businesses with Facebook pages – and could use its theoretical token to boost sales for customers, who would then be inclined to purchase more ads.
Facebook could also build on its existing system for sending money through Messenger, which currently only supports connected debit cards or PayPal accounts. By offering crypto-based micropayments, the company could increase engagement with the existing 1.3 billion users on Messenger and even expand the offerings to include payments to their favorite content creators. This extension of their new Facebook Stars virtual currency (which allows users to send digital coins in appreciation, which creators can then cash out for one cent each, after Facebook takes an undisclosed cut) could also include a tip system, which would be an effective draw for both users and content creators to their platform.
The company may even be able to ease the convoluted login process for dapps (pronounced dee-apps; short for decentralized apps), which requires long, alphanumeric keys. Facebook has significant experience designing user-friendly platforms – some, like Facebook Connect, use secure, single sign-on systems that allow users to instantly join associated apps without creating or re-inputting information. They also have a strong security record, without the major, hacker-led data breaches that have plagued other tech companies. Combining those traits would lead to a superior user experience, which could further dapp adoption across the board.
Where Facebook goes with their blockchain program is an open question. But with significant resources, some of tech’s brightest talent, and tremendous brand recognition, the tech giant is uniquely positioned to have success with cryptocurrency and blockchain – in whichever capacity they decide to approach it.
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