Blockchain industry analyzes recent Facebook moves
A recent acquisition and various data shenanigans have industry watchers wondering what Mark Zuckerberg’s blockchain strategy is for Facebook. Two blockchain executives share their thoughts.
Ryan Fang, COO and Co-founder of Ankr, the distributed cloud computing network that harnesses idle computational power to make data sharing more efficient and far more cost-effective:
“Mark Zuckerberg’s growing interest in the potentialities of blockchain should come as no surprise. With Facebook’s recent acquisition of four members of Chainspace’s founding team and rumours of a stable coin in development, it’s clear that a considerable investment in effort and resources have been made in exploring blockchain’s utility for the social media giant. As we continue to navigate an increasingly digital world and more of our lives are lived online, it’s crucial that users have the autonomy and the freedom to control how and to what extent their data is shared. Given its history of data privacy scandals, Facebook would benefit from a system truly devoid of intermediaries and if done well, coupled with its other intended forays in implementing blockchain-based solutions, it would potentially boost both its enterprise and social media market share. Admittedly, the sheer size and volume of Facebook’s network will be a true test for the scaling capabilities of today’s blockchain projects. As the industry works towards building platforms with innovative scaling solutions to better manage the data storage and sharing needs of tech conglomerates, perhaps a decentralised future is well on its way to becoming a reality.”
Benjamin Scherrey, CTO of HotNow, the first gamified online-to offline economy for users to derive real-world value from a virtual world:
“We can’t be sure what Mark Zuckerberg’s plans are but I know what I might be thinking about were I the owner of the world’s largest consumer database and also in the middle of a giant political storm.
Facebook is being attacked for fake ads, fake news, and fake accounts. When you give accounts away for free and make your money by selling users’ attention, knowing which accounts are owned by legitimate users is a fairly expensive effort. That cost also happens to be quite similar to the “know your customer” efforts that crypto trading systems are building to comply with government regulations. If I was Zuckerberg, and was afraid that I may share a fate like MySpace’s due to a loss of a fickle user base, I’ve got to find a way to make having a Facebook account bring real value to the account holder.
A great way to do that is to become a reliable crypto wallet that satisfies the KYC requirements necessary to satisfy governments. Given how much information Facebook already has on its users, the incremental cost to Facebook is relatively small.
Now Facebook has already been investing in becoming an online marketplace in its own right. Recently, in Thailand, the country with the highest Facebook user penetration per capita, the social network has partnered up with online real-estate sites to provide a new channel for buyers, renters, and sellers. I’ve even heard rumors of some elements of crypto ledgers as being part of this effort.
So if you have a wallet that’s properly KYC’d, having your own cryptocurrency is the next natural step. This is a fairly straightforward value proposition for Facebook that really has no downside while shores up the value that users might place on the FB accounts.
The real impact of decentralized crypto ledger applications, however, is to eliminate the large centralized services like Facebook and Uber who sell themselves as methods of connecting people and producing a so-called “shared economy”. A true decentralized system that is federated across thousands of distributed computers enabling millions of users to have finer control over their personal information is what will ultimately replace the business model for these huge centralized businesses. The impact of the advent of such systems will seem like a tsunami. One moment Facebook and Uber will have multi-billion dollar valuations when suddenly all their value is washed away into the vast crypto ocean because cryptoledgers undercut the rent economy and put power back into the hands of the creators.
The only question is whether or not Zuckerberg can foresee and catch this wave that is most certainly coming or, instead, try to stand against it and get wiped out like Kodak did with digital photography.”