Facebook, Cryptocurrency and The Future of Mobile Commerce

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It is the beginning of a new year and, instead of focusing on the here and now of our fast moving mobile sector, I would like to take a few steps back and look at the implications of deeper changes in the technology landscape. & Nbsp; Here is the great idea that I would like to unpack the baggage: in 2018, Facebook started to make progress to become the biggest cryptocurrency player in the world and to build a mobile payments platform that could rival Visa and even one day interrupt the banking system global itself.

It sounds crazy, especially in the context of 2018, probably the worst year in Facebook's history. & Nbsp; Cradled by the Cambridge Analytica data breach, by the revelation of Russian disinformation during the 2016 elections, by the improper use of its platform to incite violence against Rohingya Muslims in Myanmar, and a campaign to conceal the tones and smears of PR against George Soros, Facebook has gone from a scandal to the other. & nbsp; The cumulative blow to Facebook's credibility gave rise to a potentially existential threat while a movement among users started at #deletefacebook.

In the midst of this crisis, Facebook has quietly launched an in-house launch, one focused on blockchain technology and cryptocurrency. & Nbsp; Last spring it was announced that David Marcus, head of Facebook Messenger and former president of PayPal, would lead this new initiative. & Nbsp; 8 months later, the start took over 40 people, with several former key executives of PayPal. & Nbsp; & nbsp; & nbsp; The group was extremely reserved, forcing potential employees to sign NDA before revealing details of the project. & nbsp; When Marcus stepped down from the board of Coinbase, one of the world's largest cryptographic companies, due to "conflicts of interest," during the summer, it could be said that things were becoming serious.

Last week, Facebook finally became public with ad of their first encrypted product – a digital stablecoin anchored to the legal currency – to be used for remittance payments in India. & nbsp; & nbsp; Payments will be enabled on Whatsapp, the messaging platform with over 200 million Indian users. & Nbsp; The strategy is compelling: India accounts for over 10% of the global $ 613 billion remittance market and the reduction in transaction costs and friction, while the addition of currently unassigned users could be a case of winning use in the real world.

We can also see the contours of the larger image take shape. & Nbsp; As I wrote in the past, Facebook suffers from "WeChat Envy:" with over 600 million users of WeChat Pay and millions of vendors and service providers on its platform, WeChat has turned a messaging app into a commercial portal universal mobile. & Nbsp; As Connie Chan of A16Z wrote: & nbsp;WeChat users in China can access services to call a taxi, order food delivery, buy movie tickets, play casual games, check in for a flight, send money to friends, access data from fitness tracker, book a medical appointment, get bank statements, pay your water bill, find geo-targeted coupons, recognize music, search for a book at the local library, meet strangers around you, follow news about celebrities, read magazine articles and even donate to charity … all in one integrated app.

Facebook would like to diversify from its revenue model based on commercials and exploit its installed user base of over 2.5 billion euros to generate revenue based on payments and transactions. & Nbsp; Getting started in India is a good idea as they have a huge and growing mobile population, there is no major operator like WeChat, and international payment platforms like PayPal have less presence.

Analysts they postulated where Facebook can go with a dollar-based digital currency: start with peer-to-peer payments, then drive online vendor adoption. & nbsp; In the end, Facebook could use its currency / wallet as an option "Pay with FB" for any online seller in the same way that Facebook Login works for the identity. & Nbsp; Finally, as WeChat does today, the currency could be used as an uninterrupted payment option for offline merchants by scanning the QR code.

Especially for mobile-first / mobile users in developing countries, a Facebook-based stablecoin and a digital wallet would not only be a universal system of mobile commerce, but a more stable reserve of their local currency. & Nbsp; We could even imagine how at some point Facebook could start an online bank for digital natives in these emerging economies.

It is a lot to be realized, of course, and the irony is that to guide the adoption of a digital currency, Facebook needs the only thing that currently has a shortage: trust. & Nbsp; Here is a potential dilemma of eggs and chickens: by focusing on more transactional revenue driven by user utility than by ad sales, Facebook can rebuild trust. & Nbsp; But it must have some confidence to guide the initial adoption. & Nbsp; This is why the Facebook movement in blockchain / cryptocurrency can be seen as a game of both defense and offense at the same time.

Facebook has already reinvented itself twice, moving from a single social media platform in the desktop era to a disaggregated collection of mobile apps. & Nbsp; Becoming a mobile commerce ecosystem with its own native currency would be a fantastic third act for the company. & Nbsp; Despite the beating of this year, I would not have bet against Facebook. & Nbsp; They have the capital, the users and some very smart people who accept the challenge.

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It is the beginning of a new year and, instead of focusing on the here and now of our fast moving mobile sector, I would like to take a few steps back and look at the implications of deeper changes in the technology landscape. Here is the great idea that I would like to unpack the baggage: in 2018, Facebook started to make progress to become the biggest cryptocurrency player in the world and to build a mobile payments platform that could rival Visa and even one day interrupt the banking system global itself.

It sounds crazy, especially in the context of 2018, probably the worst year in Facebook's history. Cradled by the Cambridge Analytica data breach, by the revelation of Russian disinformation during the 2016 elections, by the improper use of its platform to incite violence against Rohingya Muslims in Myanmar, and a campaign to conceal the tones and smears of PR against George Soros, Facebook has gone from a scandal to the other. The cumulative blow to Facebook's credibility gave rise to a potentially existential threat while a movement among users started at #deletefacebook.

In the midst of this crisis, Facebook has quietly launched an in-house launch, one focused on blockchain technology and cryptocurrency. Last spring it was announced that David Marcus, head of Facebook Messenger and former president of PayPal, would lead this new initiative. 8 months later, the start took over 40 people, with several former key executives of PayPal. The group was extremely reserved, forcing potential employees to sign NDA before revealing details of the project. When Marcus stepped down from the board of Coinbase, one of the world's largest cryptographic companies, due to "conflicts of interest," during the summer, it could be said that things were becoming serious.

Last week, Facebook finally became public with ad of their first encrypted product – a digital stablecoin anchored to the legal currency – to be used for remittance payments in India. Payments will be enabled on Whatsapp, the messaging platform with over 200 million Indian users. The strategy is compelling: India accounts for over 10% of the global $ 613 billion remittance market and the reduction in transaction costs and friction, while the addition of currently unassigned users could be a case of winning use in the real world.

We can also see the contours of the larger picture that takes shape. As I wrote in the past, Facebook suffers from "WeChat Envy:" with over 600 million users of WeChat Pay and millions of vendors and service providers on its platform, WeChat has turned a messaging app into a commercial portal universal mobile. As Connie Chan of A16Z wrote: WeChat users in China can access services to call a taxi, order food delivery, buy movie tickets, play casual games, check in for a flight, send money to friends, access data from fitness tracker, book a medical appointment, get bank statements, pay your water bill, find geo-targeted coupons, recognize music, search for a book at the local library, meet strangers around you, follow news about celebrities, read magazine articles and even donate to charity … all in one integrated app.

Facebook would like to diversify from its advertising revenue model and take advantage of its installed user base of over 2.5 billion euros to generate transaction-based and payment-based revenue. Getting started in India is a good idea as they have a huge and growing mobile population, there is no major operator like WeChat, and international payment platforms like PayPal have less presence.

Analysts they postulated where Facebook can go with a dollar-based digital currency: start with peer-to-peer payments, then drive the online vendors' adoption. Ultimately, Facebook could use its currency / wallet as an option "Pay with FB" for any online seller in the same way that Facebook Login works for the identity. Finally, as WeChat does today, the currency could be used as an uninterrupted payment option for offline merchants by scanning the QR code.

Especially for mobile-first / mobile users in developing countries, a Facebook-based stablecoin and a digital wallet would not only be a universal mobile commerce system, but a more stable value reserve than the local currency. We could even imagine how at some point Facebook could start an online bank for digital natives in these emerging economies.

It is a lot to realize, of course, and the irony is that to guide the adoption of a digital currency, Facebook needs the only thing that currently has a scarcity of resources: trust. Here is a potential dilemma of eggs and chickens: by focusing on more transactional revenue driven by user utility than by ad sales, Facebook can rebuild trust. But it must have some confidence to guide the initial adoption. This is why the Facebook movement in blockchain / cryptocurrency can be seen as a game of both defense and offense at the same time.

Facebook has already reinvented itself twice, moving from a single social media platform in the desktop era to a disaggregated collection of mobile apps. Becoming a mobile commerce ecosystem with its own native currency would be a fantastic third act for the company. Despite the beating of this year, I would not have bet against Facebook. They have the capital, the users and some very smart people who accept the challenge.

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