Facebook is reportedly building a cryptocurrency based payment system. The social media giant is recruiting financial firms and e-commerce companies to help launch the payment platform. Users would be able to send a digital coin to each other and use that currency to make purchases on Facebook and online. Facebook’s plans may also include ways to financially reward users who watch with ads. Reports have even surfaced that the company has recruited the help MIT crypto professor Christian Catalina. So, What is Facebook up to in the secret project?
Cryptocurrencies have seen a very public boom and bust but that doesn’t mean they ‘re going away. The underlying technology behind them is solid. Facebook’s interest in developing crypto coin of their own is shrouded in mystery. What will the coin be used for and how will it impact our daily lives?
According to The Wall Street Journal, Facebook is currently looking for partners to invest over a billion dollars into a fund that will provide financial backing for Facebook’s stable coin. This is an attempt to dampen the erratic nature of most cryptocurrencies as dictated by surges in supply and demand. The plan seems to be a currency that Facebook uses within its own market place.
In order to get merchants on board, Facebook appears to be willing to offer lower fees than credit cards. This means that Facebook will be sacrificing the short term return in order to get people spending more time on the platform and that’s really the aim of the game facebook at the moment, they don’t want your money they want your time because that’s worth a lot more.
At facebook recent F8 developer conference Zuckerberg & Co
Facebook’s marketplace is probably where most of the action of the new Libra projects will occur, it makes perfect sense why Facebook will try and incorporate their own digital currency in order to make the interaction between currency and their services more streamlined but should we be excited, I don’t think so.
At the same conference Zuckerberg presented the future of Facebook as a privacy-focused Social platform something he immediately admitted was not one of Facebook’s strong points, due to the recent scandals involving the company if your memory is rusty this includes Cambridge Analytica scandal, as well as, other numerous projects that Facebook helped governmental organizations with one particular program, was the NSA’s Prism program which was publicly revealed by Edward Snowden and caused Snowden to flee the U.S.
Now, sure other companies such as Google, Microsoft, and Youtube also participated in the program, but this is simply highlighted that while Facebook may say that they want to ensure privacy historically. This is not been in the case even though Zuckerberg is admitting this still bears the obvious question, Why should we trust Facebook with our money and our transactions? Is the company liable to release our spending habits or personal transactions to governing bodies or firms like Cambridge Analytica are the main contentions is simply the facebook’s coin will make it easier for governments to access this information?
If facebook coin becomes a major form of payment it may force people to abide by Facebook’s guidelines simply to buy and sell things. This is unlikely but it’s not a good sign that this is even a possibility. A much more likely scenario is simply that Facebook’s coin will be a parallel payment method to the fiat currency we all use today, because of this businesses are unlikely to make their payment method exclusively. This type of currency but inside Facebook’s online marketplace it’s up to make the rules and in this market, if you don’t agree with Facebook’s values you may be excluded from it altogether.
This kind of thing reminds me of an actual technocracy where tech companies begin to govern society although they already do in a way adding a payment system into the mix makes things a little more serious. The simple solution is just not to use Facebook’s currency on Facebook, Instagram or any of their platforms and that is the big question, Will people use it?
Maybe not in Western Market but I could definitely imagine such a system being huge in developing markets. It is a pivotal time for Facebook with growing public distrust will the company be able to convince people to use their currency and more importantly how will the coin be used and on another note or if another company like Amazon released its own currency.
Perhaps if the facebook coin works out is going to further legitimize cryptocurrencies for more organic and private uses that’s what we can hope for.