Could the tech giants have ulterior motives for this move?
Earlier in 2018, Facebook published a blog post which set out their new policy on advertisements. This states that ‘ads must not promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings, or cryptocurrency.’ Whilst this decision initially rang the changes in the tech world, Google wasn’t far behind. On 18th March, it released a ban on cryptocurrency ads on both proprietary and affiliated platforms, to come into effect by June 2018. Given the questionable content hosted on Facebook in the past – we are all familiar with Russian sponsored posts on the 2016 US election – and Google’s well known failure to police promoted content on Youtube, could this be an effort of these organisations to turn over a new leaf?
It’s possible. Neither Facebook or Google can continue to ignore the vast amounts of questionable content they have been letting permeate their sites. But the specific targeting of initial coin offerings and cryptocurrencies in these statements could suggest that these technology giants have other motivations in mind.
The Facebook cryptocurrency
It wouldn’t be an outlandish speculation to suggest that Facebook and Google might be getting ready to launch their own cryptocurrencies. As global platforms run by some of the best minds in tech, Facebook and Google are well placed to assess the current buzz around the blockchain. In fact, Facebook has already had a foray in digital cash in the past. Facebook Credits were a virtual currency which enabled users to purchase items in applications hosted on the Facebook platform. Although the system was removed in 2013, it was for a time the only way for game developers to process payments from the users of their apps. With Facebook now hosting a range of app services, and a Marketplace for users to buy and sell items with each other in the real world, a native cryptocurrency payment system could be a smart business option.
What’s more, there already exists at least one popular cryptocurrency which is entirely conceived around the concept of the social network. Steemit, a blockchain powered social network, rewards users with cryptocurrency tokens for posting popular content. The more upvotes a post gains, the more STEEM tokens the user receives. This is a simple yet effective way of generating content that will keep network members coming back to the site. With time spent on the Facebook network down by 50 million hours a day by the end of last year, and the number of daily users in the US and Canada falling for the first time in Facebook’s history, an added incentive to stay on the site would help the social media mogul to cling on to its user base.
A recipe for success
If Facebook did choose to go down the cryptocurrency route, the odds are that it would be a success. It already has several key ingredients essential for entry into the world of blockchain: expert tech developers, a community of followers, and a serious amount of funds. There are over a billion users around the world who are already attached to the Facebook platform, many of whom will have no previous experience in the world of cryptocurrency. User loyalty to Facebook means that the company already has trust and community of followers that is needed when launching a new blockchain product. The same can be said for Google, which – if anything – has an even stronger case for possible user uptake in blockchain.
Furthermore, Facebook and Google already own several popular applications which could easily be integrated into the cryptocurrency world. Cryptocurrency wallets would broaden the functionality of Facebook owned apps such as Messenger, WhatsApp and Instagram, and tighten the company’s hold on peer to peer communications. If you can message, call and send money to your friends via WhatsApp, then there is no need to look elsewhere to rival services. As for Google, their ownership of the Play Store is itself evidence enough for their dominance of the applications market, even without considering the long list of apps which they have themselves developed. The proliferation of Google products and services across the internet gives them significant potential in the cryptocurrency world. It is a potential which may soon be realised.
Jumping on the bandwagon
It might seem like everyone is getting involved in blockchain and cryptocurrencies at the moment, but in the case of Facebook and Google, such a move could really make sense. It is looking more and more likely that Facebook will have to make some significant changes to prevent the slow decline of its core site. Whilst growth in users aged 55 and above appears strong, Facebook is losing considerable ground in the teenage demographic. With young users key to the future success of any social media, Facebook needs to come up with a strategy in order to fight off its competition. As for Google, just like any other ruthless empire looking to expand, they will soon need another area in which to flex their muscles. Launching a cryptocurrency could safeguard their dominance for the next few years, at least.
Are Facebook and Google getting ready to launch cryptocurrencies? What other changes could Facebook make to stay at the forefront of social media? Would you personally use a Facebook or Google platform to buy and exchange digital currency? Comment below with your thoughts and ideas.
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