There’s a war brewing among the tech giants over payments, and it has big implications for Bitcoin and other cryptocurrencies. The latest salvo came last week when Facebook’s CEO announced a new strategy focused on messaging and privacy.
The privacy pledge is likely nonsense and distracts from Facebook’s real pivot, which is all about money and shopping. As Fortune’s China correspondent, Clay Chandler, astutely noted this weekend, “Mark Zuckerberg Has WeChat Envy.” In the post, Clay pointed out how WeChat (a.k.a. “one app to rule them all“) has built-in payment features that make it more powerful than a simple ad-based social network like Facebook.
WeChat isn’t the only Target of Facebook’s payment ambitions. As others have observed, Zuckerberg’s announcement was a shot across the bow of Apple, and turned up the heat in “tech’s next big rivalry.” This rivalry is driven by Facebook’s desire to replicate the walled garden of iMessage, where people are spending a growing amount of time—and where Apple can leverage its well-established payment platform, Apple Pay.
Facebook’s push into payments is all the more interesting given its blockchain ambitions. The company’s growing blockchain team recently topped 60 employees, and is poised to hire dozens more. There are also plans for Facebook Coin, a native crypto currency that, as Robert noted last week, could be used to pay people for their data.
All of this raises the question of how Bitcoin, Ether and other traditional cryptocurrencies will fit into the payment battles among the tech companies. Consider, for instance, how these currencies offer secure and trusted payment networks with open protocols that could integrated as a feature into the tech giants’ existing apps. Adding the Bitcoin network within one of the tech giants’ wallets would be a boon for users and give the currency a big boost too.
In the case of Facebook, though, a tie-up is unlikely given that its core business turns on centralization and surveillance—two qualities that are anathema to the vision of Satoshi Nakamoto’s free and open currency. Hence, Facebook Coin, when it arrives, is likely to be a tightly controlled corporate currency that will be disdained by Bitcoin believers.
There could be an opening for Apple, however. The company under CEO Tim Cook has made privacy part of its brand, and Apple is not addicted to data like Facebook is. Adding Bitcoin functionality to the Apple Pay wallet would boost the company’s privacy bona fides, and could be a quick way for it to get into the blockchain game. And just imagine what it would do for blockchain infrastructure if mighty Apple started scooping up crypto companies.
None of this may come to pass, of course. The tech giants may spurn technologies like Bitcoin they can’t control, and instead expend their energy into roping consumers into their own private payment fiefdoms. Meanwhile, long time Bitcoin fans will be suspicious of corporate coins from the likes of Facebook, and will shun them out of principle.
Nonetheless, there is so much blockchain building going on, and the push to remake payments is so strong, it’s hard not think some sort of convergence between tech giants and cryptocurrencies lies on the horizon.
|Jeff John Roberts|
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Yang’s real Twitter account is here.
FOMO NO MO'
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An earlier version of this post failed to flag that the Andrew Yang tweets in the screenshot were from a satire account.