Last week Facebook’s lead blockchain player left the board at Coinbase. David Marcus had been on the board since last December, and has left to avoid a conflict of interest. They have been very cagey about their intentions in the blockchain space, but this move by David Marcus may herald the beginning of a bigger Facebook presence in the online payments space.
David Marcus has a history in the online payments industry. Before taking up an office at Facebook, he worked with PayPal and also with the Facebook Messenger team. Now he seems to be moving forward with a project at Facebook, though there has been little information shared about what it could be.
After his departure from the board at Coinbase, David Marcus commented to BI via a Facebook representative on the move,
“Because of the new group I’m setting up at Facebook around blockchain, I’ve decided it was appropriate for me to resign from the Coinbase board.”
Facebook isn’t alone in potentially pursuing an online payments platform that uses blockchain and a messenger service. While they have a lot of money to work with, their reputation is far from stellar at the moment. A series of scandals has plagued the company, and whether or not the public will trust Facebook with their money is an important question for them to address.
Facebook Holds a Unique Position
The formation of the Facebook blockchain team that David Marcus heads is very recent. After being announced in March of this year, there hasn’t been much news coming out of the company about what they might do with blockchain. Now that they have met with Stellar, and denied a partnership, an online payments platform is looking increasingly likely.
Although Facebook has been embroiled in controversy surrounding user privacy, blockchain could help them shore up their public image in the wake of major scandals. Depending on how a blockchain-based payments platform is implemented, it could allow them to demonstrate its commitment to the strong language that has come out of the company concerning user privacy over the last few months.
Unfortunately for Facebook, there is more damaging information emerging all the time. According to a report that was reproduced by The Burning Platform blog, they claimed in 2011 that their platform could be used
“as a market research tool and as a platform for ad saturation (that) can be used to change public opinion in any political campaign.”
Now we all know how Facebook was probably going to make good on this offer. They were more than willing to sell highly sensitive data to firms like Cambridge Analytica. In all likelihood, Cambridge Analytica was one of many, many, entities that were able to buy private data from the mothership, which could have been used for just about anything.
People Have Many Other Options
There are numerous other options being developed for people that want to use a messenger-based payments platform. While Facebook struggles with its public image, there are start-ups like Zulu Republic that are working with the Telegram messaging platform to create secure payment systems for crypto users. Their Litecoin Lite.im feature will allow Telegram users to trade Litecoins over the Telegram platform, and use RSA encryption and the user’s private password to secure the data.
Zulu Republic pointed out the necessity of a secure platform, saying that Telegram is, “the most secure messenger in the world,” and that on Telegram, privacy is “built in by default.” Most people don’t want a platform to track their every move, and then use that data to manipulate the masses. Sadly for Facebook, their total lack of regard for privacy will probably continue to haunt them, especially in an area like online finance.
One of the biggest questions that Facebook needs to address is how they will reestablish confidence in their brand, and compete with other platforms that don’t have a gaggle of privacy scandals following them around. Blockchain could be part of their confidence solution, but it could also be far too little, and way too late.