Mark Zuckerberg, the creator of Facebook, hinted that digital currencies may be coming to Facebook.
Early today, in a post on his personal Facebook wall, Zuckerberg outlined his new year’s resolution for 2018 is to fix Facebook.
Zuckerberg remarked that “the world feels anxious and divided, and Facebook has a lot of work to do. Whether it’s protecting our community from abuse and hate, defending against interference by nation states or making sure that time spent on Facebook is time well spent.”
He then went on to say “one of the most interesting questions in technology right now is about centralization vs decentralization. A lot of us got into technology because we believe it can be a decentralizing force that puts more power in people’s hands.”
Next he talks about how, today, the opposite has become true. We see a move towards large tech firms controlling most of the marketplace. The reality is technology has centralized power.
He concluded by saying that there were “important counter trends – like encryption and cryptocurrency …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.”
Nearly one third of the world has a Facebook account, making it a deeply centralized service in the tech world.
Paying with messenger
Facebook recently implemented a payments feature which allows users to connect a debit card to their Messenger app. The feature allows users to send funds through in a message inside the app or make online purchases. The feature, though, has not yet taken off.
The failure of Facebook’s payment function is made even larger by the huge success of its Asian competitors WeChatPay and AliPay.
CNBC reports there are over 556 million mobile payment accounts in China using WeChatPay and AliPay. The apps allow users to easily pay with a QR code. The process is so easy it has almost replaced Cash transactions in the region.
It may be possible that Facebook hopes to capitalize on the popularity of digital currencies and benefit from this by implementing them into the Messenger App.
The potential currencies for Facebook to use
When making a list of possible candidates it may be easier to start with the coins that will likely not make the cut.
The Grandfather of digital currencies Bitcoin, would not be a practical payment solution in its current state due to slow transaction processing and bulky tech requirements. Unless Facebook decides to cash in on the media attention Bitcoin would bring to their platform, this is likely not the best choice.
If Zuckerberg is going to explore decentralized digital currencies, then we can rule Ripple out as well. Although extremely popular, Ripple is sometimes criticized for being highly centralized.
Of the remaining top 10 digital currencies, there are a few possible candidates. One major deciding factor would be scalability. This leaves two possible candidates, Stellar Lumens and Cardano.
Initially designed as a platform for sending remittances, Lumens is incredibly fast. It also has low fees and can handle up to 1,000 transactions per second.
Cardano uses multiple blockchains to drastically boost scalability and speed. The code behind Cardano has been thoroughly vetted by leading mathematicians who claim it is provably secure.
Cardano also runs decentralized applications (dApps). The possibility of decentralized applications running in conjunction with Facebook is a very exciting one: think CryptoKitties inside Facebook.
Although not in the top ten, new digital currency RaiBlocks may be a good choice for Facebook. The currency, although somewhat unknown, boasts zero fees. Further, transaction speeds right now far exceed its competitors.
At this stage, no one knows how deeply Facebook will integrate digital currencies into their platform, if at all. One thing that is for certain is that this tip of the hat, from Zuckerberg, is another sign of the mainstream adoption of digital currency.