Some time ago, it became apparent that Facebook is serious about its blockchain development. Now, after a few rounds of hiring and building of their team, it seems that the future of blockchain is certain inside of the company. What is new is the fact that slowly, the analysts are getting to a point where they understand what the project is all about.
More importantly, they are starting to grasp the potential of the same blockchain division inside of one of the biggest media empire in the world. As it stands now, the same position has a shot of generating billions for the social media company and doing the same in a modest time period. In other words, the Facebook coin could become the most important digital currency on the face of the planet.
The reported stablecoin that the Facebook blockchain division is developing could be a significant source of income for the business. This comes from Ross Sandler, a Barclays analyst who got some insight into the project. According to him, the Facebook cryptocurrency efforts could lead to a revenue jump of anywhere between $3 billion and $19 billion.
The same hike in profits could take place as early as 2021, which is an incredibly fast time period, even for a crypto project. The numbers are impressive even when they are compared to the profit generated by the entire company. In 2017, Facebook generated revenue of $40 billion and from that number $39.9 billion came from advertising. Yet, the success of the payment processing system that uses blockchain is not certain.
In fact, the entire estimate hinges on the possibility of the company to reinvigorate the micro-payment process used for content distribution. Sanders also believes that the company faces two challenges. First, it needs to demonstrate the actual coin value for the users that differ from current payment means. The second is the process of gradual extraction from the unpleasantness and bad press of 2018.
CEO of Facebook, Mark Zuckerberg, seems to be well aware of the problems his company faced in the wake of Cambridge Analytica scandal. This is why he issues a long post recently in which he called for social media to become more oriented towards the privacy of users in the future years.
In the post, Zuckerberg did not mention any cryptocurrency directly, but he did talk about encryption and payments. For most industry insiders, this is a clear hint towards the blockchain development underway at the company. But, for now, its boss clearly does not want to show off his cards completely, not for the fear of competition, but most likely because the entire concept has not been ironed out internally.
This relates not only to the blockchain division but also its crucial business department. Still, many are sure that these are not a big hurdle and that the actual business plan will come as the FB stablecoin takes shape. This would mean that the upcoming year will likely see a more defined approach that Zuckerberg can share publicly.
While much is uncertain about the FB coin, there is a hint from the past where the project might head – the Facebook Credits. This virtual currency would certainly tie into the existing system of money storage and transaction on the platform. This is why Sandler believes that the whole development might start off as a bit less ambitious process where Facebook would want to provide micro-transaction to its users.
This would, in turn, re-invigorate the model that was already working between 2010 and 2012 as Facebook Credits. But, Sandler thinks that the scope of the project would surely be a lot bigger down the road. Here, like in esports and other digital-only ventures, the ability to scale up fast and effectively is crucial for potential success.
Over the previous months, the social media company advertised dozens of blockchain-related openings. This number ballooned since December 2018 and in this year sought out business operation, product managers, brand marketing manager, as well as threat investigators. This is a steady rise in job openings ever since Facebook first announced it was setting up a team dedicated to blockchain tech.
The same announcement took place in May 2018. At the same time, the Facebook development team made numerous internal hire. These include developers pulled from Oculus, Instagram, Messenger, and Whatsapp. Currently, the team has well over 60 employees and about two-thirds are devoted to engineering. The rest belong to recruiting, operations and marketing. Among the hires are some well-known names in the industry, showing that the money is not being saved on the recruiting effort. It also shows no signs of stopping.
Merger of Chat Apps
While its CEO stated that Facebook is going to focus on privacy issues, there are many other things that are being developed inside the company. Among them is the merger of Facebook’s apps that are used for communication into a single hub that would allow them all to funnel into it. Essentially, the move would consume the splintered communication platforms into a single entity that would have well over a billion users.
This is an ambitious endeavor and one that would require a lot of planning and preparation to be completed successfully. With this in mind, the notion of using FB token could open up the company to an unprecedented level of user access. With that, the company is bound to try to extend its reach into new domains and fintech seems like a great option especially because the in-house potential that Facebook has.
With the developer power, the Facebook coin could quickly become one of the biggest competitors even to cryptocurrencies like bitcoin and ethereum. With the FB coin, the main attraction would be the ability of the platform to avoid and overcome any barriers of the traditional banking system. The same could then grow Facebook even further, giving it a status like WeChat in China, but only a global scale. If that occurs, Facebook in its current shape would be a much smaller version of the company it could become.