Facebook, the savior of Blockchain?
Cryptocurrencies have gone through a hard time. ICOs launched before or after the crash in have slipped into a valley of insignificance. Bitcoin, the most used decentralized currency, has lost more than 80% of its all-time high value. Despite this horrible price drops, cryptocurrencies have developed further since January 2018. New use cases, positive approaches from authorities, overwhelmingly positive assessments from plenty of governments around the globe show that Blockchain is here to stay. Nevertheless, all this has not been enough to turn the market sentiment around or we better say, not yet! If we have a look at strategic plans of Facebook, it is more likely than unlikely that Facebook will play a decisive role in bringing Blockchain back on the winning track.
David Marcus – The man behind the scenes
In August 2018, entrepreneur David Marcus has surprisingly left Coinbase’s board of Direction to take over a unit a Facebook. Marcus justified his resignation after only 1 year at Coinbase’s Board of Direction with the fact that he was able to create his own Blockchain unit at Facebook. Therefore, his resignation at Coinbase was interpreted as an indicator that Facebook is starting to step up their own Blockchain ambitions in the near future.
What are Facebook’s plans?
This is probably one of the best-kept secrets in Silicon Valley. Even big investors and prominent venture capitalists do not know what Facebook is planning to implement into their Social Media platform. Despite the unclarity, rumors are going around that Facebook intends to introduce their own cryptocurrency. This would enable 2 billion people to instantly and securely exchange values without the need of a central intermediary. Banks like Western Union are making billions of dollars with international remittances. Immigrants working in the US or Europe are usually sending parts of their income back home to financially support their families in undeveloped countries. To realize such transactions, sender and recipient have to go through time consuming and expensive procedures. In the 21st century, paying rip-off fess is usually the only way for these people to get their hard earned money moved from one country to another. But while people in undeveloped countries have no access to bank accounts, they often do have access to internet, smartphones and social media channels. Facebook is extremely popular in third world countries as it enables poor families to connect with other family members abroad for free. This means in effect, that most beneficiaries are already registered as users on the platform and could immediately take advantage of Facebook’s cryptocurrency. Additionally, corporate customers could purchase Facebook’s fee-based services directly via their in-house cryptocurrency which would eradicate transaction costs and management costs all at once.
With regards to recent data breaches and security holes it seems as well not unrealistic that Facebook wants to change its infrastructure at the basic level. Blockchains instead of central servers could reduce the risk of data breaches and hacker attacks. The question remains if laws, privacy standards and the users themselves are ready to experience Blockchain on a daily basis. The future will show how and when Facebook introduces Blockchain-based solutions.
impacts on the Blockchain industry
It’s difficult to make exact estimations about the scope of such an announcement. Nevertheless, it is clear that Blockchain would with one strike no longer be an unknown but a mass-adopted technology used by billions of peoples in their daily lives. Such an event would probably blast everything seen in the history of cryptocurrencies. 2 Billion Facebook users would immediately get access to Blockchain. Moreover, all of them are going to actively experience and use cryptocurrencies. This would finally be the demonstrate the advantages of Blockchain to everyone and will most likely affect the whole industry in a highly pleasing way.
Written by Ato Herzig