In the wake of Cambridge Analytica improperly acquiring the data of up to 87 million Facebook users, the social media giant is exploring how blockchain could decentralize its network to protect user data or even possibly create a cryptocurrency. A new report published today has experts speculating about what Facebook is developing.
CEO Mark Zuckerberg confirmed in his New Year post that Facebook was exploring “counter-trends” to centralized networks, including encryption and cryptocurrency. In the post, Zuckerberg said:
A lot of us got into technology because we believe it can be a decentralizing force that puts more power in people’s hands.
Now, it appears Facebook is, indeed, making moves into blockchain technology, a digital, decentralized ledger which allows secure, encrypted transactions confirmed by peers on the network instead of a central server or authority.
Earlier this month, Facebook appointed David Marcus, the executive previously in charge of Messenger, to helm a team developing blockchain technology for the social network.
“I’m setting up a small group to explore how to best leverage Blockchain across Facebook, starting from scratch,” he wrote in a Facebook post.
Facebook has been tight-lipped, but in a new report out of The Financial Times, experts are weighing in on what the social media giant could be up to.
These experts say Facebook could leverage the blockchain to protect user data, verify identities, or even create its own cryptocurrency for transactions on the network.
Sheila Warren, head of blockchain at the World Economic Forum, said that Facebook’s foray into the tech was a “really smart move.” A cryptocurrency could facilitate micropayments and an “explosion of applications” from developers.
It could also give users more control over their data by letting them set specific permissions about what kind of data the network can store from the blockchain-based transactions.
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 also added:
One of the things blockchain is good at doing is creating trust where trust doesn’t exist.
Competition or Incompatible?
Facebook should also be prepared for competition in the space, namely social networks that will leverage cryptocurrencies to reward users for activity and posts, said Spencer Bogart, partner at Blockchain Capital, despite there not being an “obvious and immediate slam dunk for Facebook in the space.”
Kik is an ad-free messaging service that has developed its own token, and another popular messenger, Telegram, has raised more than $1.7 billion selling its token and has announced plans to launch a blockchain. Bogart said Telegram and Kik’s move into blockchain “clearly stirred waves” over at Facebook.
Tanner Philip, director of corporate development at Kik, said:
Facebook being a hyper-centralized entity, I’m interested to see how that fits with the philosophy of decentralization.
Not everyone sees Facebook’s foray into blockchain technology as a positive change. Eyal Hertzog, co-founder of the blockchain startup Bancor Network, believes that blockchain could cause Facebook to “lose its grip on its users” and presents more danger than opportunity.
Facebook’s power is tied to its centralized database of user content and connections. […] If this becomes decentralized as they access blockchain, Facebook will also lose its grip on users.
Do you think Facebook should use the blockchain on its network or create a cryptocurrency? Let us know in the comments below!
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