Facebook Plans to Create Its Own Cryptocurrency
Facebook Plans to Create Its Own Cryptocurrency
By Alex Heath May 11, 2018 Updated 2h ago
Facebook is exploring the creation of its own
cryptocurrency, a virtual token that would allow its billions of users around
the world to make electronic payments, people familiar with Facebook’s plans
told Cheddar.
“They are very serious about it,” said one of the people,
who asked not to be identified discussing unannounced plans.
Facebook started studying blockchain almost a year ago,
when a member of its corporate development team, Morgan Beller, began looking
at how the social platform could use the emerging technology.
At the time, Beller was the only Facebook employee
devoted to studying blockchain, the digital and decentralized ledger that
underpins cryptocurrencies like Bitcoin and Ethereum.
Her work was thrust into the spotlight this week when Facebook
announced that the vice president in charge of the Messenger app, David Marcus,
would lead a new team to “explore how to best leverage blockchain across
Facebook, starting from scratch.”
Marcus leads a team of less than a dozen Facebook
employees working on blockchain. Before joining the company, he was the
president of PayPal, which facilitates transactions between users in Facebook’s
Messenger app.
Marcus is an early Bitcoin investor, and in December he
joined the board of Coinbase, which runs one of the most popular cryptocurrency
exchanges.
Recode first reported the creation of Facebook’s
blockchain team earlier this week.
Executives at the company regularly talk about future
initiatives with their employees, and they tout the company’s 10-year roadmap
in public presentations. But plans for blockchain have been omitted from that
roadmap, and top executives have been tight-lipped about any plans for crypto,
the people familiar with the discussions said.
In an internal post earlier this week announcing the
blockchain initiative to Facebook employees, CEO Mark Zuckerberg didn’t explain
what specifically the team would be working on.
“Like many other companies Facebook is exploring ways to
leverage the power of blockchain technology," a Facebook spokesperson told
Cheddar after this story was first published on Friday. "This new small
team will be exploring many different applications. We don’t have anything
further to share.”
Facebook’s work on blockchain technology and
cryptocurrency will likely take years to materialize. People familiar with the
matter said the social network doesn’t have plans to hold a so-called initial
coin offering (ICO) by offering a limited number of virtual tokens for the
public to buy at a set price.
Facebook will likely need to make acquisitions in the
blockchain and cryptocurrency space to develop its own virtual currency, one of
the people said. Blockchain technology could also be used to help Facebook
verify the identity of accounts and encrypt data.
The social platform has experimented with virtual
currency before. In 2009, the company released Facebook Credits, which could be
used to purchase virtual goods in popular games like Farmville. But the feature
never gained traction, and Facebook shut it down two years later.
During an interview at a conference in February, Marcus
said Facebook didn’t have plans to integrate cryptocurrency into its apps
anytime soon.
"Payments using crypto right now is just very
expensive, super slow, so the various communities running the different
blockchains and the different assets need to fix all the issues, and then when
we get there someday, maybe we'll do something,” Marcus said.
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