Editor’s Note: Regular readers know Bill has been critical of social media giant Facebook. And for good reason. Facebook regularly “mines” your personal data and sells it to the highest bidder.
The company knows it’s in hot water with regulators. Today, Jeff Brown, Bill’s top tech expert, reveals Facebook’s atomic option to save its own skin…
The news is out…
Social media giant Facebook plans to launch its new cryptocurrency during the first half of this year. Facebook is talking with several digital asset exchanges about listing FacebookCoin when it goes live.
Early intel suggests that Facebook is creating a stablecoin – a cryptocurrency that is pegged to an existing asset… Most likely the U.S. dollar.
And because Facebook has a user base of over 2.5 billion people across several platforms (Facebook, Facebook Messenger, Instagram, and WhatsApp), it is in an ideal position to launch its own digital currency.
With over 2.5 billion users already, FacebookCoin will certainly gain immediate adoption… Creating a multibillion-dollar business for Facebook overnight, thanks to transaction fees.
But that’s not what this is about…
Simply put, Facebook is trying to save its own skin.
Recently, the company has been trying to distance itself from ownership of its actions. The evidence is everywhere.
For starters, rumors have it that Facebook is trying to raise $1 billion in venture capital (VC) to support its cryptocurrency project.
If you look at the books, Facebook is sitting on $41 billion of cash right now… It clearly doesn’t need the money.
But by getting VC firms involved with FacebookCoin, it will claim that the project is decentralized and not solely controlled by Facebook. It’s just a clever front to deflect scrutiny.
And this is consistent with Facebook’s action plan in response to the public backlash it has received.
Facebook has already established an ethics team with independent members to deal with controversial issues. When issues arise going forward, it will be the ethics team that makes decisions on them… Not Facebook.
And of course, Facebook can then deflect any backlash to the ethics team.
Facebook has also been lobbying for additional government regulations on social media. That way, Facebook doesn’t have to self-police – it can simply follow orders. That also allows it to deflect public backlash.
If that doesn’t work, Facebook has one more play…
As you know, Facebook is under immense regulatory scrutiny right now.
CEO Mark Zuckerberg has been lambasted in Washington, D.C., and in Brussels, where European Union officials meet. And news came out just last month about a new federal investigation looking into Facebook’s deals with smartphone manufacturers.
Zuckerberg skillfully managed the last round of hearings on Capitol Hill. While the techno-illiterate Congress didn’t take any action, Zuckerberg knows asking for more regulations and deflecting onto the ethics team might not be enough.
Facebook may need to make a major concession in the future to keep the feds from breaking up the business.
And what better way to pacify government bureaucrats than to “share” profits with users… And the easiest way for Facebook to do that is with its own currency.
That’s what FacebookCoin is all about.
The mainstream press will run stories that skim the surface but make no mistake about it: Facebook is keeping itself several steps ahead of the regulators with this move.
Lifetime bureaucrats like Elizabeth Warren will continue to howl about breaking up Big Tech companies like Facebook. And the mainstream press will continue to run with those stories as far as they can… But it’s not going to happen.
In fact, I would argue, that big governments prefer to have single, large depositories of extensive information on its citizens… What better way to “keep tabs” on everyone?
Don’t get me wrong, I’m not a fan of Facebook’s business practices. But that doesn’t change the fact that Facebook is one of the best businesses in history… and it’s still growing… And that’s not going to change for a while.
The only thing that could threaten Facebook’s business is a blockchain-based social network with better privacy and better profit-sharing incentives via cryptocurrency. But that’s a story for another day…
For now, just know that Facebook is dead set on putting a buffer in between the company and the controversial issues it is dealing with.
That’s how the company hopes to come out of its PR crisis intact.
Editor, Exponential Tech Investor
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