Report: Facebook could be launching its own version of bitcoin

With other companies like Google moving into blockchain, Facebook needs to get a move on 
Amelia Heathman14 May 2018

Facebook is reportedly looking into launching its own cryptocurrency like bitcoin, according to sources close to the matter.

People familiar with the plans have told US publication Cheddar that Facebook is “very serious about” launching a cryptocurrency.

The virtual token would be aimed at allowing Facebook’s two billion+ users around the world to make electronic payments.

The news comes as the head of Facebook Messenger, David Marcus, said he was leading a new team at the social media company to “explore how to best leverage blockchain across Facebook, starting from scratch.”

What is blockchain?

Blockchain is also known as distributed ledger technology. It’s like a distributed database, that millions of computers (often called nodes) around the world have access to and are constantly updating.

All data put into the blockchain must be verified and cannot be corrupted or deleted.

Marcus is leading a team of around 11 employees working on blockchain at the social network. A representative at the company has said the team will be exploring many different applications.

Rumours about a Facebook-branded virtual currency have been swirling for a while. Earlier this year, CEO Mark Zuckerberg said he would be studying cryptocurrencies and decentralising technologies like blockchain as part of his plans to improve Facebook.

At the time, he said: “There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralised systems and put it back into people’s hands.

“I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

And Facebook using cryptocurrency for payments makes sense. There are billions of people around the world that use the social media both for work and in their free-time.

Facebook has made a lot of its money from advertising; selling ads for products to these two billion users. The company would stand to gain if it allowed people to directly make payments for these products, using its own infrastructure based on the blockchain.

Before then, the company has a lot of work to do. The sources told Cheddar that it's likely Facebook will need to make acquisitions in the blockchain and cryptocurrency space in order to develop its own virtual currency.

And, it’s going to take a while. Marcus told CNBC earlier this year that as payments using cryptocurrency are expensive and slow at the moment, a lot of issues need to be fixed first before Facebook will do anything.

With companies like Google moving further into the blockchain space, Facebook needs to get a move on.

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