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Facebook is no stranger to trying new markets; they now dominate the social media landscape by owning Instagram, Facebook, Messenger, and WhatsApp as well as a few others, but the social networking giant’s next big venture now appears to be a cryptocurrency payment system according to a new report by the Wall Street Journal.
Facebook is recruiting a host of financial companies and online merchants to aid them in launching a cryptocurrency based payment platform. The project responsible for the development of this new platform is called Project Libra. The basic concept is a digital coin (which is already in the works) that users would be able to exchange between themselves or use to make payments across Facebook’s infrastructure and elsewhere on the internet.
A crypto-based payment system by Facebook is somewhat controversial for a few reasons. Firstly, Facebook has had a terrible few years when it comes to their privacy and security reputation. Ever since the Cambridge Analytica scandal broke where it was revealed that millions of users’ data was unknowingly harvested, it seems like scandal after scandal has followed. In the last couple of months alone Facebook has faced criticism for asking new users for their email account passwords and for auto-downloading their contacts from those email accounts. Earlier this year it was also revealed that Facebook has been storing users passwords in PlainText, a huge cybersecurity no no.
These scandals and others have negatively impacted Facebook’s reputation and have lead many to believe that they care more about data harvesting and targeted ads than they care about privacy and security. Facebook has a long way to go to reverse this image and be known as a privacy-focused and secure provider of platforms, but if they can successfully pull this off, it will be a step in the right direction.
Cryptocurrencies have faced problems entering the mainstream where it seems the average person is still cautious of digital currencies. However, if anyone can make it catch on, it’s probably Facebook. Facebook has a huge network of connected people across its platforms and they have the capital to make a system that is straightforward and simple to understand for everyone. Most people have a Facebook account or an Instagram account, or use WhatsApp or Messenger, giving them access to a massive customer base if the initial implementation goes smoothly.
The thing about Facebook is that they’re so ingrained into our habits that even when they do things we don’t like, we tend to grumble and encourage them being fined but don’t leave the platforms in droves. It used to be common to see Facebook pages or polls dedicated to changes Facebook made, for example, a group called “Students against News Feed”, a feature that has survived and is a foundation of the site. There may be an initial backlash to the Facebook cryptocurrency-based payment system but it will likely take hold all the same.