Cryptocurrency–Where there’s smoke there’s fire. At least that is the view of the cryptocurrency industry towards recent Facebook actions. While the world’s largest social media platform, with over 2 billion users, took a decidedly negative stance against crypto when it instituted an advertisement ban earlier in the year, the company appears to be warming up to the idea of a blockchain and/or cryptocurrency merger onto the social platform.
With the growing presence of online digital payment sources like PayPal and Venmo, pundits have pointed out that Facebook is the perfect medium for developing a new merchant program–whether between users or as an easy method for setting up online commerce.
Facebook has since changed its stance on the cryptocurrency ban, announcing to the community that it will review projects on an individual basis in an effort to induce quality control, albeit at the cost of further centralization. In May, the company announced the formation of a Blockchain team led by Facebook Vice President David Marcus (who until yesterday held a position on the board of U.S. crypto exchange Coinbase). Last month, Facebook’s Director of Engineering Evan Cheng leap-frogged to the same position in the newly formed blockchain group, giving credence to the fact that the social media platform is going all in on blockchain.
On Friday, news broke from Business Insider that Facebook was in discussion with the non-profit organization Stellar Lumens, creator of the XLM currency, to create a Stellar-based blockchain for their own use. While the company has since been adamant to deny any relationship between Facebook and Stellar–or any crypto organization–the fact remains that multiple threads are now tying the social media giant to cryptocurrency. As if the establishment of a blockchain division were not enough, Facebook is now being tied to top cryptocurrency projects. It’s entirely possible that Facebook is looking to develop a cryptocurrency from the ground up for use on its platform, but given the plethora of already established options and the ease of forking a new coin from an existing blockchain, the evidence points to the company pursuing a current project to fill its needs. Rather than attempting to reinvent the wheel, Facebook can instead take an existing crypto and use it as the model for its new currency.
In January, when interest in cryptocurrency was at its zenith and the markets were severely overvalued from a bull run, Mark Zuckerberg issued a statement that paved the way for potential cryptocurrency adoption,
“I’m interested to go deeper and study the positive and negative aspects of these [cryptocurrencies], and how best to use them in our services.”
Not only did Zuckerberg make a commitment to further researching the benefits and pitfalls of cryptocurrency, but he specifically stated at least a desire to integrate crypto onto the social media platform. The benefit of crypto or another distributed ledger platform on Facebook goes beyond simple payment transfer, but as a method for secure information sharing. Facebook has had a tumultuous year with the revelation of massive data-sharing and a general decline in excitement for the world’s most popular social media outlet. It’s no surprise that the company is considering cryptocurrency, which could be the shot-in-the-arm needed to reinvigorate the stock and technology of the platform.