Facebook has set up a small, high-powered team to explore the potential of blockchain technology, recode reports. Given the many potential uses of decentralised, cryptographic ledgers, the move has sparked speculation over what the social media giant might be up to.
The team will be headed by Facebook executive David Marcus, who has until now been in charge of the Facebook Messenger app – the standalone application that allows users to create group conversations and send private messages. It will consist of fewer than a dozen people, including two Instagram executives, VP of engineering James Everingham, and VP of product Kevin Weil.
Facebook’s blockchain ambitions
The decision to appoint Marcus as Facebook’s blockchain explorer in chief is significant. He joined the board of leading cryptocurrency trading platform Coinbase last year, saying at the time that he was “convinced that what the company is working on has the potential to materially change the lives of people around the world”.
That alone is not enough to suggest that Facebook has cryptocurrency or payment platform ambitions – whether that’s creating its own coin for use on the social network, or allowing users to spend or trade other cryptocurrencies. But as a long-term strategy, it would make perfect sense.
With two billion users, over one billion of whom are regularly active on the platform, Facebook’s entry into the space could have dramatic implications for the financial services sector.
Whatever the long-term plans may be, it is certainly a vote a confidence for the concept of digital money, and lines up with comments from Facebook founder and CEO Mark Zuckerberg earlier this year.
In his 2018 mission statement, he wrote of technology’s ability to democratise power, adding that “encryption and cryptocurrency” were “important counter-trends… that take power from centralised systems and put it back into people’s hands.”
Could Blockchain solve Facebook’s security issues?
Facebook’s mass data ‘leak’ and its subsequent weaponisation for political ends by Cambridge Analytica has rightly been the biggest technology story of the year so far. As a result, there is speculation that Marcus and his team may be exploring ways in which blockchain technology could better protect Facebook users’ information.
In theory, decentralising a social platform would make it more difficult for data to fall into the hands of data-mining organisations. However, as the bulk of Facebook’s revenue comes from how it stores and sells information on Likes and online behaviour, it’s not obvious how that would fit into its current business model.
Atomising a user’s private data across a blockchain ledger may also cause more problems than it solves, particularly with regards to incoming GDPR legislation. It’s not clear how a citizen could exercise their right to be forgotten when their actions and data are stored on an immutable blockchain.
As Marcus says in a post on his (where else?) personal Facebook page, “I’m setting up a small group to explore how to best leverage blockchain across Facebook, starting from scratch.”
It may well be that “starting from scratch” is the giveaway here, that this is a journey of exploration towards an unknown destination.
Internet of Business says
Facebook’s move is both intriguing and predictable. For the social network to become a platform for cryptocurrency-based commerce – purely hypothetically – it needs to do one thing more than any other: reinforce people’s trust in its own brand name.
At root, money is a trusted system of exchange, and whether Facebook could ever sit at the centre of such a network when its reputation for consumer trust – always shaky at best – has been undermined by its own actions is in doubt. This is particularly the case as Facebook’s users are, essentially, its product.
But whether blockchain or other distributed ledger systems – such as the lighter, smarter Tangle or Directed Acyclic Graph (DAG) solution favoured by the IOTA Foundation – could help Facebook with its trust and security problem is another matter.
A whole range of possible outcomes present themselves, such as a social network that rewards people for offering up their processing resources.
But GDPR and the possible emergence of similar US regulations pose a much bigger challenge to these concepts than many people realise. Distributed ledgers and the right to have data permanently erased from computer systems are, on the surface at least, mutually exclusive concepts.
Additional reporting: Chris Middleton.
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