BLOCKHAIN: What could Facebook Coin do?

Source: Facebook

Source: Facebook

Let's get the facts out fast: Facebook's David Marcus used to runFacebook Messenger. He also used to run PayPal, after selling to it one of his startups. And now he is going to run the Facebook blockchain team. Did we mention he is on the Board of Directors at Coinbase? And did we mention that Facebook has a PayPal integration that lives inside Facebook Messenger? So let's test out some ideas.

Idea 1: Bitcoin as a native payments coin inside of Facebook. The social media network doesn't like ICO advertising because that implies promotion of financial products, Bitcoin is very much not a security and has financial industry maturity (see Goldman, CME, CBOE) like no other asset. If you're making an argument for payments or store of value for a Facebook wallet, why not start with Bitcoin and put it into Messenger as a form of payment. This would the PayPal line of reasoning. Our verdict: unlikely, commercially unnecessary and regulatory nightmare.

Idea 2: Empower users with their data in response to Cambridge Analytica and GDPR. Create Facebook wallets and tokens, where the tokens hold all user data on a distributed ledger, and users can control granular permissions about how their data is used and monetized. Perhaps this merges with the Brave browser, such that attention tokens are backed by deep user data. Our verdict: unlikely, undermines core model.

Idea 3: Create unique digital collectibles that are somehow tied to user profiles and interactions that can be purchased, shared or stored. Unlike selling digital goods from a central data base (which can be wiped anytime), a Facebook version of CryptoKitties could work. Casual gaming like Farmville was practically born on the Facebook graph, and the customer segment is correct. The question is, will customers understand that blockchain-based tokens have real scarcity? Our verdict: possible, easy experiment.

Idea 4: Take the enterprise blockchain approach by finding an industry oligopoly and build common infrastructure. For example, create a common platform for advertisers, that uses smart contracts to execute workflows and is transferable between providers. Replace cookies on people's computers with tokens they are paid to hold, which will allow advertisers in the consortium to target audiences better. Our verdict: possible, though coordination problems.

Idea 5: Launch Facebook Coin, like Telegram did. Just copy/paste Ethereum and its top 10 apps into a white paper description, tell a story about how many users you have, and raise $10 billion from venture investors. Out verdict: never going to happen, we hope

Email us anytime David!