Facebook Gets Serious about Crypto
Facebook is planning on leveraging blockchain technology to create its own cryptocurrency, a virtual coin that will enable its over 2 billion users to make electronic payments.
It was announced last week that former Paypal President, Coinbase board member, and Facebook Messenger VP David Marcus would be leading a team of less than a dozen employees dedicated to exploring blockchain technology. Now that news has broken out about Facebook’s virtual token plans, cryptocurrency development may become a key part of the team’s mission.
According to Cheddar, Facebook is “very serious” about using blockchain and crypto for infrastructure, security and identity verification as well. Because of Cambridge Analytica and numerous other privacy concerns, security has been at the top of Facebook’s priority list.
Blockchain may help the company improve their backend security and improve user privacy. Crypto is only the latest in a long string of efforts Facebook has made to try and ramp up security. Ironically, the company also banned cryptocurrency ads as a way to deter crypto-jackers and improve security.
Facebook’s Crypto Timeline
Facebook only started formulating ideas for blockchain about a year ago so they are still very much in the early stages. Creating cryptocurrencies and setting up payments is a long, arduous process so the timeline for this project will be lengthy. We may not see a Facebook virtual currency manifest for several more years.
Facebook is not planning on holding an initial coin offering and according to Cheddar, they will likely need to acquire companies currently operating in the crypto space. Marcus, also an early bitcoin investor, stated in February that Facebook didn’t have any plans to integrate crypto into its apps. He also mentioned,
“Payments using crypto right now is just very expensive, super slow, so the various communities running the different blockchains and the different assets need to fix all the issues, and then when we get there someday, maybe we’ll do something.”
Even though Facebook will be venturing into crypto slowly, it’s clear now that they are committed to making their own virtual currency a reality.
Blockchain and Crypto Goes Mainstream
In March, Google announced that they would be dipping their toes into the blockchain waters by developing their own blockchain related technology to support its cloud business. Dozens of brands like Overstock and Expedia have already started to embrace crypto and now the major tech companies are following suit.
By adopting blockchain and funneling money into various crypto and blockchain developments, tech giants like Google and Microsoft and major brands are giving the budding technology more legitimacy.
The banks, formerly staunch opposers of virtual currencies, are also starting to warm up to it. Earlier this month, Goldman Sachs announced that they would be opening Wall Street’s first bitcoin trading desk. There’s a chance that Goldman’s decision to trade bitcoin may create a domino effect in the financial world.
When you take all of these recent developments and company adoptions into consideration, it’s evident that Bitcoin and blockchain have become more than just a passing trend. According to Charles Bovaird, a contributor at Forbes, bitcoin has managed to hold on to much of its value. It remains the top virtual currency and has shown resilience while other cryptocurrency markets have fallen.
Because blockchain and crypto is decentralized, it’s likely that Facebook see’s an opportunity to become a global payments infrastructure for users. The ability to transact easily across borders is alluring and is one of the reasons bitcoin and blockchain have gained so much traction. Banking on blockchain and crypto is a gamble but so is banking on most emerging technologies.
Facebook is the most popular social network in the world and owning a virtual currency could help them sustain their longevity and attract global virtual coin users. In a nutshell, crypto is here to stay and Facebook isn’t about to miss their window of opportunity.