American media veteran Robert Tercek, a former media executive at Sony Pictures and the Oprah Winfrey Network, has said he is not convinced that a Facebook venture into crypto will be a success.
Talking on Australian tech podcast show “The Next Billion Seconds” (Jan 17), Tercek gave his breakdown of Facebook’s current situation saying the social media giant has “no choice” but to explore crypto related options:
“Usage is down, visits are down, engagement is down, revenue is down. They’ve admitted this publicly… They have a growth problem. They’ve hit the growth wall, and largely it’s self-imposed… They have to seek out other forms of revenue.”
If Facebook is to make a major foray into crypto or blockchain, it has done a fairly good job of only letting tiny signs come to light so far.
The most recent was when Facebook acqui-hired the team from crypto startup Chainspace, which is founded by academic researchers from University College London in the UK. As of earlier this month, Facebook also has more than 10 openings available for crypto/blockchain related hires.
Last year, a Facebook vice president and former PayPal president David Marcus announced that he was stepping down from the board of crypto exchange Coinbase – just seven months after taking up the role. Marcus explained briefly then that the departure was because he was setting up a new group at Facebook that focuses on blockchain.
Little else has been revealed since, but various speculation reported by media has centered on the possibility that Facebook might create a crypto for its WhatsApp users that will enable them to make currency transfers inside the chat app.
Tercek agrees this is the most likely path Facebook will take, noting that global remittance is a $500 billion business. He said Facebook has “this enormous base of people using WhatsApp, which they actually haven’t been very successful in monetising, so this is an area for them to look at other opportunities”.
However, Tercek describes himself as “a skeptic” that this path will work out well for Facebook. He is pessimistic for one main reason: trust – or rather the lack of it.
“What strikes me as paradoxical here is the company that’s done more to destroy trust on the Internet is seeking to offer a new kind of currency and basically they’re going to hang this whole thing on ‘trust us,’” he explained.
Crypto pioneer Mark Jeffrey, who joined Tercek on the podcast, is more optimistic. Though Facebook could be “late to the party”, a Facebook crypto could still give the cryptosphere a huge boost:
“Overall, it’s a good thing because they’re introducing cryptocurrency to a whole bunch of people that have never used it before. And once they get used to the idea that they can send currency as easily as email in any amount without crazy fees, once they get hooked on that they’re never going to go back and they’re going to start exploring all of the options in that universe.”