[ad_1]
By Alex Heath and Tanaya Macheel
The small blockchain Facebook group has ambitious plans to potentially disrupt the entire payment industry, but the company is also facing recruitment challenges amid its numerous public scandals.
In recent months, the largest social network in the world has tried to recruit product managers, engineers, academics and legal experts with experience in cryptocurrencies and payments, according to people who are familiar with the effort. Nearly 40 employees, including several former PayPal executives, work in the Facebook blockchain Facebook group ($ FB) and the company recently appointed a business development manager to oversee acquisitions and deals in space.
Since it officially formed its blockchain group just eight months ago, Facebook has sent staff to cryptographic conferences around the world to recruit researchers, cryptographers and top academics in the field. During a private dinner held by Facebook during a recent encrypted conference, one participant told Cheddar that Facebook employees launched the idea of creating a decentralized digital currency for the 2 billion users of the social network.
The Facebook job announcements say that the "ultimate goal of the blockchain group is to help billions of people with access to things they do not have now", which "could be things like fair financial services, new ways to save or new ways of sharing information "In May, Cheddar reported that Facebook was exploring the creation of its cryptocurrency, a virtual token that would allow its billions of users around the world to make electronic payments without the need for a traditional bank.
To kick off his plans, Facebook has shown interest in recruiting teams behind nascent cryptocurrency and blockchain projects, according to people familiar with the issue. Some of the projects in which Facebook has shown interest are far from the level of production or implementation – an indication that Facebook is eager to quickly acquire talent in the industry.
But that hunt for talent was not easy.
Despite his interest in several encrypted start-ups, Facebook has encountered problems with recruitment due to the negative perception of its brand and many public scandals, according to people who have had discussions with the blockchain group in recent months. Many in the crypto and blockchain industry see highly centralized and hungry companies of data like Facebook as the same entities that they are trying to interrupt.
When asked for a comment, a Facebook spokesperson told Cheddar that the blockchain company's efforts were still early and referred to a previous statement:
"Like many other companies, Facebook is exploring ways to harness the power of blockchain technology – this new small team is exploring many different applications – we have nothing else to share."
A team of former PayPal executives
While Facebook's efforts in blockchain and cryptocurrency are less than a year old, the group has already assembled a roster of star managers led by David Marcus, former president of PayPal ($ PYPL) and vice president of Messenger on Facebook.
The leaders of other divisions of Facebook, such as the former head of Instagram products Kevin Weil and the head of the engineer James Everingham, have joined the fold blockchain in similar roles. Geoff Teehan, a longtime Facebook employee who was previously the product design director for the News Feed, recently modified his LinkedIn profile to read "Head of Product Design, Blockchain".
A further indication that the group focuses on the disruption of the financial sector, about half a dozen of the executives Marcus has hired for his blockchain group shares his connection with PayPal.
Tomer Barel, vice president of risk and operations for Facebook blockchain, previously managed all fraud and risk management as PayPal's executive vice president. Facebook's product manager for blockchain, Meron Colbeci, has led the management of PayPal's personal payments products. And the head of the group's brand and marketing, Christina Smedley, managed global communications and brand marketing on PayPal.
In addition to the talents for payments transferred from PayPal to Facebook this year, BitGo co-founder Ben Davenport advises the Facebook blockchain team, according to a person familiar with the issue. BitGo is an encrypted portfolio of asset and blockchain security company that Davenport left at the start of this year.
Other employees of the Facebook blockchain group have past experience working on payment products to other high-tech companies, such as Google Pay and Samsung Pay. And Facebook has found a public link to Washington, D.C. in Lee Brenner, who previously was a manager for a category association called the Global Blockchain Business Council.
According to LinkedIn, Facebook has six recruiters working to expand the group with more engineers, product leaders and PhDs.
Secret that ruffles feathers
The more than a dozen people Cheddar talked about in this story said that Facebook was left speechless about the entire scope and timing of its blockchain plans.
Non-employees are asked to sign non-disclosure agreements before they can know the details of the project, and even those who have been actively recruited by Facebook have not been fully informed about the details of the group's strategy.
The stealthy approach adopted by Facebook to explore the blockchain – an industry based on the concepts of decentralization and information transparency – has already caused irritation.
In a recent academic conference called Scaling Bitcoin in Tokyo, Facebook hosted a private dinner, only for invitations, to recruit participants the same evening as an official event organized by the conference.
The organizer of the conference, Anton Yemelyanov, stated by e-mail to Cheddar that Facebook was not an official sponsor of the event and was therefore excluded from any "commercial activity such as marketing and recruiting".
"We will issue a stern warning to all Facebook employees who will participate in the next event," he said.
A digital economy for 2 billion people
With over 2 billion users, experts say it's not surprising that Facebook can attempt a sort of native payment solution, especially in developing markets with less advanced banking and payment systems.
"They have a large base of installed users," said Drew Hinkes, an adjunct professor at the New York University School of Law, specializing in blockchain and cryptocurrency. "They are probably looking at China and they are seeing how popular mobile commerce is and wondering why we can not do it."
And just like WeChat, the "messaging app" at the basis of Chinese digital life, Facebook has the opportunity to offer financial services beyond payments, ie loans and bank accounts, from which it could profit.
The fact that Facebook is actively recruiting academics and looking at early-stage encryption projects suggests "they want to develop their new network instead of relying on someone else" according to Hinke.
In a post at the start of 2018 announcing his plans to solve Facebook's misinformation problems, CEO Mark Zuckerberg made it clear that the concept of decentralization could counter the bad will that big tech companies are facing.
"With the rise of a small number of large technology companies – and governments that use technology to look at their citizens – many people now believe that technology centralizes power rather than decentralizing it," wrote Zuckerberg. "There are important counter-trends to this – like cryptography and cryptocurrency – that take power from centralized systems and put it back into people's hands."
To build their own decentralized network of payments, experts say that Facebook would need a robust identity management system and a significant number of users, which it has.
But blockchain technology has historically suffered from a scalability problem. While Bitcoin's original vision was a peer-to-peer electronic cash system, it failed to reach the Visa or Mastercard level, and now the race is about to build a viable blockchain network for cross-border payments.
Facebook tried to have its virtual currency years ago. In 2009, the company released Facebook Credits, which could be used to purchase virtual goods in popular games such as "Farmville". But the functionality never got enough traction and Facebook closed it two years later. Since then, Facebook has integrated PayPal into the Messenger app and has started supporting payments through local banks on WhatsApp in India.
For a company like Facebook, blockchain technology could also have other applications outside the cryptocurrency. And the company's blockchain group will probably explore other applications outside payments.
Facebook tried to buy the new digital identity Distributed Systems, based on two people familiar with the issue, before Coinbase purchased it at the start of this year. The move suggests that Facebook may want to decentralize and substantially return the data it collects from users. Currently, Facebook collects data based on user activity and charges advertisers to be able to target users based on that data.
"I think Facebook is concerned that their business model can be overturned by decentralized technology platforms in the future," said Ari Lewis of Grasshopper Capital, a company that invests in blockchain-based digital assets.
[ad_2]Source link
