Facebook Inc. (FB) has set its sights on blockchain technology, recently announcing the creation of a new unit headed by one of its senior executives, David Marcus. But with little details as to what the social media giant has planned for the technology that underpins cryptocurrencies, the industry is left to speculate.
From payments to privacy, the blockchain industry is abuzz wondering what Facebook has planned, according to the Financial Times . To get a sense of what could be going on industry watchers have turned to Marcus’ resume. At Facebook, he was in charge of Facebook Messenger for awhile and was also the president of PayPal. Marcus also sits on the board of Coinbase, the U.S. based cryptocurrency exchange. All of his current and previous roles have led to speculation that Facebook could be eyeing a payments product using blockchain. One idea being bandied about is that the social media giant will deploy blockchain to create its own cryptocurrency to enable payments on the platform. (See more: Facebook Launches Internal Study on Blockchain .)
Sheila Warren, head of blockchain at the World Economic Forum told the Financial Times Facebook could develop a digital token to enable micropayments on the social media platform. That could, in turn, result in a slew of new applications, she said. It would also be welcomed by publishers who want to get paid when Facebook users share and spread their content.
Blockchain Can Prove A Facebook User’s Identity
On the privacy and data fronts, experts told the paper Facebook could use blockchain technology to enhance privacy for the billions of people that are on its platform any given day. For instance, blockchain could be employed to prove a person’s identity and could be used to provide users with more control over their data. Facebook could create contracts that stipulate who can receive information on the platform. “One of the things blockchain is good at doing is creating trust where trust doesn’t exist,” Warren said in the report. “You set the permissions in such a way that if you say for cat videos, you can take all my data, but for music videos, you can only take my screen name, it is self-executed automatically.” She noted Facebook could also tap blockchain technology to create a public key to match a user’s private information. (See more: Which FAANG Will Win the Blockchain Wars? )
Facebook Announced Blockchain Efforts Earlier In May
Earlier this month Facebook announced it was creating a team to study how the blockchain technology behind bitcoin can be used in developing new products. “I’m setting up a small group to explore how to best leverage blockchain across Facebook, starting from scratch,” Marcus said in a post on his personal Facebook page regarding on his departure from Messenger. Facebook, which recently banned ads related to cryptocurrency and initial coin offerings, has not said how it might use blockchain technology. The move could be to get out in front of the technology before rivals do. After all, Facebook is adept at crushing the competition, acquiring WhatsApp and Instagram. With blockchain, the company can’t purchase it but it can develop it.