One huge potential threat to larger cryptocurrency acceptance is the network that already counts more than one billion users: Facebook.
“Facebook is extremely tight-lipped about its interest in this market,” Fast Company’s Nancy Miller writes in a June 18 piece
“COO Sheryl Sandberg snapped off a crisp ‘Nothing new to announce,’ when the question came up during April's earnings conference call, and company representatives expressed confusion as to our interest. But even JPMorganChase CEO Jamie Dimon and American Express CEO Kenneth Chenault expect Facebook (and Google) to be a future rival of their mega-banks.” February 26:
the $19-billion acquisition of mobile messaging app Whatsapp.
Facebook “is close to obtaining Irish regulatory approval for providing financial services in the form of remittances and electronic money,” writes The Irish Times
that David Marcus is leaving PayPal to take over Facebook Messenger.
“Although the company once considered offering peer-to-peer payments, now that it has more resources, it has a greater interest in diversifying its revenue stream,” Miller writes.
A former senior manager on Facebook's payments team said:
“For example, remittances — money transfers by a foreign worker to family back in her home country — might potentially be "more lucrative than a pure payment play. In the realm of peer-to-peer payments, Facebook has a huge edge because it knows both the payers and the receivers, which is critical in complying with complex financial regulations.”
That last line is crucial. No matter what, if Facebook intends to process payments in fiat currencies, it has numerous legal headaches to deal with that Bitcoin, or Ripple, or NXT, or any other cryptocurrency doesn’t have to worry about.
Facebook’s only real trump card is that a whole bunch more people have bought into that platform than have bought into cryptocurrencies. That’s why it was big news recently when QuickCoin
, Doge Tipping App and Multicoin Tipping App
all made it possible to send and receive cryptocurrencies on Facebook.
“Facebook has tried payments before,” Miller writes, “but the tools were never in place to do P2P payments well.”
"‘WhatsApp is potentially a massive m-payment system,’ says Lou Kerner, a venture capitalist and founder of the Social Internet Fund. ‘If you look at WeChat [a competing messaging platform], it's already a payment system.’ Or perhaps Messenger will become Facebook's payments play. After all, its new chief, David Marcus, is best known as the guy who reenergized PayPal in the last couple of years.
We reached out to several experts in our community to get their thoughts on this potential play by Facebook:
Bitcoin provides many benefits, which are true for Facebook, too. With the current system you need a credit card, which requires a bank account. Many people don't have bank accounts, like in large parts of the developing world, and young people, etc. — both demographics with massive potential.
Furthermore, Bitcoin transaction costs are lower, and it's overall quicker and easier to use (less information to enter, etc).
And beyond all that, if Facebook DOESN'T [adopt Bitcoin], they will be perceived as a company that doesn't move with technology, that's unfit to compete in the current social media realm.
Proprietary payment systems are inherently limited in the amount of innovation they can allow. Just like we're seeing the closed garden of iOS losing market share to the open world of Android, in the long run, a closed garden payment network cannot compete with the flourishing ecosystem of originally innovative companies creating services for everyone in open source Bitcoin land.