Historically, Facebook has done a great job of staying on the cusp of technological advancement through investing heavily in new technologies and smart acquisitions. From WhatsApp to Oculus, the company has used its bulging bank balances to stay one step ahead of consumer trends by snapping up tech and talent. And, after last week’s internal announcement that Facebook would be investing heavily in a new blockchain technology research wing, headed by David Marcus, one of the company’s top execs, leader of its Messenger platform and a former CEO of PayPal, it is quite obvious which new emerging technology the company has its sights set on now.
Blockchain technology — and its incorruptible, decentralized digital ledger — could offer the accountability and transparency needed to pull Facebook out of its recent data security quagmire, which saw CEO Mark Zuckerberg dragged in front of the United States Congress following the Cambridge Analytica scandal. On the flipside, the decentralized nature of blockchains would make it difficult for Facebook to continue with its most valuable business model: harvesting user data and targeting users with advertising based on their online behavior.
So, with this conundrum in mind, how might Facebook be planning on using the blockchain, and how will this affect the overall development of blockchain technology?
What Is the Plan?
I would argue that there are three potential incentives for Facebook in building out its blockchain capabilities:
The first, and most obvious, is that Facebook is aiming to publicly align itself with a technology which is most famous for providing transparency and offering users control of their own data in the aftermath of the Cambridge Analytica scandal. The scandal has left many users questioning Facebook’s management of user data and the platform’s transparency and privacy terms, which blockchain applications could potentially alleviate.
The second is that Facebook wants to continue drawing developers to create apps on its developer platform by capitalizing on the popular trend of coders moving en masse into the crypto space. If Facebook can