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Will Silicon Valley Social Media Giants Pave the Way For Crypto?

Marked interest from Facebook and Twitter in the blockchain space is a boost for cryptocurrency; and, in the case of Twitter CEO Jack Dosey, Bitcoin.

Facebook’s sheer size means any foray into the blockchain space could cause reverberations for years to come. The social media giant quietly ‘acqui-hired’ the team behind Chainspace, a small blockchain startup consisting of University College London researchers. Though, to be sure, AirBnB once acquihired the team behind ChangeTip team, a social media tipping service for cryptocurrency, but nothing ever seemed to have publicly come from that.

What is Facebook up to?

The social network conglomerate has around two billion users worldwide and seems to keep an open mind to new technologies, such as blockchain. At the end of last year, Facebook stated that it was looking into the development of its own stablecoin – a form of digital currency tied to the U.S. dollar – as a non-volatile way to transfer money on WhatsApp, Bloomberg reports. The social media giant is eyeing an emerging Indian market which saw $69 billion move through the messaging app in 2017.

Chainspace’s white paper outlines that the team were building a “platform for high-integrity and transparent processing of transactions within a decentralized system”. In a few words, its goal was to improve transaction speeds using blockchain. But Facebook will look for more than this, as scalability will be an important problem to solve with such a large network.

Facebook recently hired Evan Cheng as its first “director of engineering, blockchain.”

Mark Zuckerberg has discussed a privacy-focused vision for social networking and acknowledged the importance of encrypted services.

“Another important issue is the future of privacy and encryption,” he wrote on his Facebook page. People really value the privacy that encrypted messaging brings, and we’ve built the most secure global messaging service in the world. As people increasingly share more privately, we’re working on making more of our products end-to-end encrypted by default, and making more of our products ephemeral so your information doesn’t stick around forever…”

In another post, he mentioned cryptocurrency.

“…With the rise of a small number of big tech companies — and governments using technology to watch their citizens — many people now believe technology only centralizes power rather than decentralizes it,” he wrote.

He added: “There are important counter-trends to this –like encryption and cryptocurrency — that take power from centralized systems and put it back into people’s hands. But they come with the risk of being harder to control. 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.”

Twitter CEO Believes in Bitcoin’s Future

Twitter CEO Jack Dorsey has meanwhile shown a sustained interest in cryptocurrencies. As the CEO of Square, he is responsible for the most downloaded payments app in the world. Square’s Cash.App allows users to buy bitcoin in limited amounts. In fact, a broad overview of the world’s largest cryptocurrency is available for newcomers on its website.

This mirrors what Dorsey is saying on his personal beliefs regarding crypto, added to a notion that Bitcoin can become the native, ubiquitous currency used on the internet.

“It’s a fascinating time in technology because [money] to me was one of the last big centralized and nationalized instruments,” he said, while speaking to Joe Rogan.“When you think about the internet as a country, as a market, it’s going to have its own currency. But the interesting thing about the internet nation is that it’s the whole world. The world gets one currency, one thing to communicate in. I think that’s so freeing and so exciting.”

 

Continued work on blockchain across the board will be helpful to Bitcoin, in the eyes of Jack Dorsey at least. Speaking on the Stephan Livera podcast, he seemed to say that parts of the technology underpinning other crypto coins could be incorporated into Bitcoin. If Bitcoin proves adaptable, more stable asset and begin to sustain an uptrend in the long-term. For good measure, there are 261 million registered account on Twitter.

Reddit

Reddit user statistics are murkier than Twitter and Facebook. Reddit has nonetheless been least opaque in regards to its cryptocurrency interests. The San Francisco-based social networking and news platform hired Ryan Charles to lead its cryptocurrency division.

CEO Yishan Wong detailed on r/blog how the company would seek the creation of a special-purpose cryptocurrency backed by the value of the shares created during its 2014 $50 million funding round.

“We are thinking about creating a cryptocurrency and making it exchangeable (backed) by those shares of Reddit, and then distributing the currency to the community. The investors have explicitly agreed to this in their investment terms.”

Currently, nobody really knows how many bitcoin users there are. There are approximately 30 million bitcoin wallets. There are likely far, far fewer users. Since Facebook and Twitter are both friendly to the concept of digital currencies, we might reasonably assume that Silicon Valley is the impetus of a new stage of digital currency adoption. Keep an eye on Facebook and Twitter.

 

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