Facebook Will Investigate Ways to Use Blockchain as Part of New Initiative
The company outlined a wide range of shifts and internal moves – Chris Cox becomes the clear second in command to CEO Mark Zuckerberg, taking on the role as Chief Product Officer of Facebook’s ‘Family of Apps’, Stan Chudnovsky takes over from David Marcus as head of Messenger, Facebook’s News Feed chief Adam Mosseri will move across to Instagram.
Each of these updates has a fairly clear purpose and objective (TechCrunch summarized the moves well in their round-up), but the element which raised the most eyebrows was the appointment of Marcus to a new role overseeing how Facebook might be able to use blockchain technology, and what that might look like.
No doubt you’ve heard about blockchain. The basic summary is that a blockchain is a distributed ledger, made of a system of data ‘blocks’ which, due to the various calculations and linking elements, is almost impossible to cheat. That makes the technology ideal for financial transactions, like Bitcoin, while the open nature of blockchain means that it relies on the oversight of the relative network, not governments and corporations.
If you’re not 100% clear on how it works, don’t fear, not many are, but the general gist is that it enables the online community to create their own transactional data networks, free of outside regulation – and the fees and risks that generally come with it.
There are various concerns about this too, not everyone's convinced that blockchain is the future, but there’s clearly potential in it, which is why Facebook’s examining it in more detail.
And The Social Network is clearly taking it seriously – not only have they put David Marcus, who’s also the former head of PayPal, in charge of their new blockchain team, but they’ve also added Instagram’s now former VP of Product Kevin Weil, who oversaw that platform’s development of its Stories option.
That’s a lot of senior experience looking at the tech – how, exactly, Facebook might use blockchain is not clear, but there are various opportunities, including universal payments (free of fees), data exchange, or a new form of social connection. Given the evolving potential of the technology, no one knows for sure what its capacity truly is, but Facebook clearly sees something there.
That doesn’t necessarily mean a move into cryptocurrency, but it does suggest that Facebook sees a way to help fulfill its mission to connect the world - and definitely, the nature of the blockchain could enable Facebook to build something like an international currency exchange system of their own, expanding cross-border trade potential.
We’ll have to wait and see what Facebook has in store on this front, but the company’s shift into this new arena does give blockchain an extra level of legitimacy. It’s got a long way to go before it becomes mainstream, but who better than the world’s most used social platform to enable just that?
Certainly, a very interesting development to watch.
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