Somewhere on Facebook’s sprawling Menlo Park campus, 50 elite employees are tucked away in a secret office with separate key-card access. Behind these closed doors, a mysterious project is ongoing — one that could have a seismic impact on the world of cryptocurrency.
Although Facebook’s involvement in blockchain is no secret, evidenced by a steady recruitment drive and the recent acquisition of Chainspace, exactly what shape this project will take is yet to be seen.
Speaking in January 2018, Mark Zuckerberg made a forward-thinking comment; calling cryptocurrency an important "counter-trend to the rise of big tech" that needed study on its positive and negative aspects. And, in the months since, Zuckerberg’s intentions have solidified into two key possibilities for Facebook’s first foray into blockchain.
Decentralized digital identities
While much of the furore around Facebook’s supposed plans is pure speculation, based on the words of anonymous sources, Zuckerberg himself has made clear suggestions of the project’s direction.
In a February interview with Harvard law professor Jonathan Zittrain, the Facebook CEO entertained the possibility of decentralizing Facebook Connect — the "social sign-on" system that with one click allows users to verify their identity on sites across the web using their Facebook credentials.
Putting this mechanism on the blockchain, as Zuckerberg suggests, would potentially allow users to control the access they grant third-party apps — a function that might help overturn the social network’s reputation for the indiscriminate sharing of sensitive data.
This idea itself is nothing new, and a number of organizations are working on similar blockchain-based solutions that allow users to own their digital identities, but also permit enterprises to identify and authenticate their customers. Sphere Identity, for example, is soon to release its user platform. Blockstack is another project that aims to allow users to reclaim "fundamental digital rights" by issuing and revoking access on a case-by-case basis, and in a similar way, uPort aims to register internet identities on the Ethereum blockchain. How compatible these models might be with Facebook’s revenue model, however, remains to be seen, and as Zuckerberg admits, despite the interest, he hasn’t yet "found a way for this to work."
Aside from the words of Zuckerberg, several anonymous sources have come forward to tell the world of Facebook’s secrets. Most recently, five unidentified employees speaking to the New York Times revealed Facebook’s alleged plans to release a stablecoin backed by a basket of world currencies. This would be sent between users of a new amalgamation of Facebook-related social media — Instagram, Facebook and Whatsapp.
Though this amounts only to hearsay, the fact that Facebook has filed several virtual currency patents over the last few years suggests the tales could be true. These patents relate to digital currency purchasing flows, systems and methods for providing payment options, and seeding and discounts of credits in virtual currency systems.
Although these patents may relate to Facebook’s ill-fated project ‘Facebook Credits‘, recent staffing changes also suggest a new focus on cryptocurrency. In August 2018, former Paypal president David Marcus stepped down from his position on the board of directors at Coinbase to avoid a potential conflict of interest with his affairs at Facebook, where he had setup the secret blockchain group two months earlier.
If there will be a FaceCoin, how exactly it will be different from competitors projects — like Telegram’s Gram and Kik’s Kin — is unclear. Unlike former project Facebook Credits though, which represented a "micro economy" — a walled garden solely for Facebook users — the anonymous sources claim that Facebook has been in communication with crypto exchanges about listing its new token, suggesting it will be an interoperable cryptocurrency that can relate with the entire ecosystem.
By listing the token on exchanges, Facebook would surrender full control, but this could be necessary if the cryptocurrency is to fulfil what is thought to be its primary purpose: international remittance. According to reports from Bloomberg, again from anonymous sources, the coin will first be tested on the ground in India — the number one receiver of remittances globally.
At over 241 million, India also has the most Facebook users globally — making the country an auspicious location for the social media giant’s first landing into cryptocurrency.