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Facebook’s Crypto Ad Ban Reversal Power Play Gets Their Own News Stuck

It has been an interesting time for Facebook and its relationship with cryptocurrencies ever since they made a precedent setting move to ban adverts on their platform that had anything to do with cryptocurrency in January this year.

The social media giant has since updated their policies to once again allow cryptocurrencies to advertise on Facebook, although it has continued its ban on ICOs. This move is being seen as a positive for the cryptocurrency space, which has earned back a major advertising platform on which it can reach a large number of users.

However, behind the scenes, all is not as it seems as cryptocurrency-related content continues to get caught in the web.

Setting a precedent

On January 30, it was announced that Facebook would be updating its advertising policy prohibiting ads that use “misleading or deceptive promotional practices,” this includes ads of cryptocurrencies and ICOs.

Even back then, the message from the social media giant was confusing, as the decision by Facebook came just after its founder and CEO Mark Zuckerberg said in a personal post that he had a desire to study cryptocurrencies further:

“There are important counter-trends to this — like encryption and cryptocurrency — that take power from centralized systems and put it back into people’s hands […] I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

‘Intentionally broad’ ban

The post announcing the ban did mention that the policies would be revisited later down the line, and that it began as ‘intentionally broad,’ however, this direct U-turn has come as quite a surprising move from Facebook, even if it is only currently being paid in lip service.

‘Intentionally broad’ ban

Source: Facebook

The move from Facebook opened the floodgates for other such social and internet platforms to follow on and also ban anything crypto-related.

In March, Google took on Facebook’s reasoning for banning cryptocurrency ads. Under Google’s updated financial products policy, no advertisements for “cryptocurrencies and related content (including but not limited to initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice),” would be accepted.

Twitter then followed suit, confirming long-standing rumours that it would also stop all forms of cryptocurrency advertising. Twitter blocked out ICOs and other token sales, as well as advertisements for exchanges and wallet services, unless they were public companies and listed on major stock exchanges.

The announcement of the Facebook ban, in January, saw Bitcoin drop, as it went from $11,200 to $8,800 over a few days after it was announced.

Bitcoin Charts

Source: Coinmarketcap

Bitcoin fell below the $8,000 mark in March on the news, and Ethereum went under $600 when Twitter and Google announced their bans.

Bitcoin Charts

Source: Coinmarketcap

U-Turn

On June 26, the same policies were again updated and Facebook announced that it would allow cryptocurrencies to be advertised again, but ICOs would remain banned. The company stated that it had been looking at the best way of refining its blanket ban on cryptocurrency adverts.

The revised “prohibited products and services policy” now reads:

“Starting June 26, we’ll […] allow ads that promote cryptocurrency and related content from pre-approved advertisers. But we’ll continue to prohibit ads that promote binary options and initial coin offerings.”

The interesting wording there is that Facebook is looking to allow content from ‘pre-approved advertisers’ and so it cedes that, “not everyone who wants to advertise will be able to do so.”

It gives Facebook a lot more control and dominance over the cryptocurrency space on its platform, and allows — in its centralized manner — the platform to pick and choose the cryptocurrency projects it deems worthy.

Contradictory actions

While Facebook says one thing about its cryptocurrency policy, it seems as if it is doing something entirely different. The social media giant has had a confusing relationship with the ecosystem with news that it would be exploring blockchain, potentially for a messenger-style app as it was led up by David Marcus, the head of Facebook’s messaging app, Messenger.

More recently, there have been reports in the media that Facebook is looking at launching its own cryptocurrency, a sort of in-app virtual coin.

The reason behind Facebook’s turn around in its stance on advertising has not really been explained, especially considering it set the precedent with the ban in the first place. But with its own work in blockchain and potentially cryptocurrency as well, an ad ban would not be of benefit to the company.

Building a space for itself?

The fact that there is evidence of Facebook entering the blockchain and cryptocurrency market means that there is a lot at stake for the social media giant, especially in a space that is revolutionary and will definitely be important in the future.

By creating an ecosystem that is friendly to projects it backs, or is involved in, it could — if it wanted to — help boost them ahead of others. And with this centralized control, they have a lot of sway over which crypto projects get sufficient Facebook marketing.

Carlos Grenoir, CEO of Olyseum — a blockchain social sports app — sees how Facebook’s reversal of the ban could be selfishly motivated:

“The reasons for Facebook reversing its decision to ban crypto ads are not clear, but the motivation could have something to do with its own strategy regarding the evolving crypto space. The cryptocurrency ecosystem is expanding rapidly, and is growing its footprint in mainstream society, introducing new economic opportunities. We are also seeing regulatory authorities taking steps to provide security to the ecosystem that will in turn give strength to the global economy.”

Not all the news of Facebook’s reversal was seen in such skeptical light, as some in the crypto community ticked this move as a big win for the longevity and advancement of cryptocurrency.

However, Bitcoin commentator WhalePanda, raises an interesting point about Facebook’s current state of affairs and their need to do something revolutionary to keep relevant.

Already having an impact?

Cointelegraph, as a media outlet that operates in the cryptocurrency space, is a company that falls under the gambit of the initial ban and felt the effects of the ban when it would try and boost articles relating to cryptocurrency matters.

The posts which have been put forward for review by Cointelegraph have become stuck, and are not being confirmed, nor denied by Facebook, during the ban as well as after the ban was ‘reversed.’

The only response that Cointelegraph has seen from Facebook in terms of confirming or denying posts during the ban has to do with an article on John McAfee announcing his bid to run for U.S. president it deemed to be political, and thus against its terms. So, according to the Facebook terms, should all media posts covering runners for presidency be denied?

Already having an impact?

After yesterday news of Facebook reversing its ban on cryptocurrency advertisements, Cointelegraph has still been experiencing the same stringent approach on content monitoring when trying to promote this news, only for the post to be left stranded and unboosted with no explanation or reason.

Already having an impact?

It is a confusing space that Facebook has currently created for those in the cryptocurrency space. Cointelegraph is having its articles left in limbo, with no reason or explanation, as Facebook announces the ban on such material is no longer in action.

Plain and clear

If Facebook is indeed vetting those who are involved in the cryptocurrency space, it is yet to be explained, and if this is indeed the way in which the platform hopes to move forward, it could risk bringing a huge undertaking upon itself.

Facebook has come forward and said one thing, but they have not acted how they have said they would. Their decision to change policy has been explained broadly and without much direction, only stating that they have tightened up their broad brush strokes from January.

While the reversal of the ban will be seen as positive from most of the cryptocurrency community, it needs to be investigated further, as it has not been enacted in the manner in which it has been stated.

If Facebook is reopening the gates for cryptocurrencies, it needs to be done so unequivocally, fairly and immediately. If they, however, are using this as a way to vet certain projects and helped their own means, they should be questioned and pushed further.

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From the Internet to Crypto – How the World’s Richest Have Sized Things Up

Throughout history, the thoughts and perceptions of the masses have been shaped by leaders of politics, industry and entertainment.

The greatest minds of our time have often predicted and touted some of the most prolific innovations. Lended the support of these voices, these very innovations have shaped the way the world works.

Internet

A prime example would be the Internet. The technology revolutionized communication in the 1990s and led to a surge in investments in Internet-based companies.

What followed is now known as the dotcom bubble – a rapid rise in equity born out of speculative investing in these dotcom companies eventually led to a stock market crash, with many companies with millions of dollars of market capitalization ending up worthless.

However, a lot of companies managed to survive this period – especially Amazon, which is now the biggest Internet retailer in the world and the third most valuable public company globally.

Ironically, some of the greatest investors of our time missed the boat on Amazon and other tech companies – showing that even the most revered industry leaders can get it wrong from time to time.

It’s interesting to see how some of these thought leaders have gauged emerging technologies over the past 25 years. Four of the five richest men in the world have had diverging opinions, as we’ve seen with their predictions on the internet almost two decades ago.

In 1996, Microsoft founder Bill Gates wrote a now famous essay titled ‘Content is King’, where he outlined his prediction for what would make the internet a world-shaping invention. His opening line pretty much hit the nail on the head, in terms of how a lot of the Internet is monetized:

“Content is where I expect much of the real money will be made on the Internet, just as it was in broadcasting.”

Meanwhile world famous investor Warren Buffett was wary of investing in internet based companies in the 1990s – something he has since admitted he regrets.

Amazon founder Jeff Bezos had more faith than most – enough to quit his full time job and start his own Internet-based company. According to CNBC, Bezos saw the potential of the sector due to the massive growth in the space, as recalled in a speech at Princeton University in 2010:

“I came across the fact that Web usage was growing at 2,300 percent per year. I’d never seen or heard of anything that grew that fast, and the idea of building an online bookstore with millions of titles — something that simply couldn’t exist in the physical world — was very exciting to me.”

Crypto and blockchain

These contrasting views highlight the difference between industry revolutionaries over the years. This has also been the case with Bitcoin, blockchain technology and cryptocurrencies more recently. As the sector grows in prominence, the brightest minds have offered predictions, thoughts and appraisals of virtual currencies.

Some of it is positive, and some of it is negative. Nevertheless, we take a look at four of the five richest people in the world and their take on Bitcoin and cryptocurrencies in general. They’re ranked from richest downwards, as per Forbes’ prestigious list.

No.1: Jeff Bezos

2018 will go down as the year that Jeff Bezos became the first ever centi-billionaire. The founder, chairman and CEO of Amazon net worth is now over $100 bln, making him the wealthiest man in the world.

His company has gone from strength to strength over the years, and is now the world’s largest online shopping platform.

However, it’s almost impossible to find any comments made by Bezos directly talking about Bitcoin, cryptocurrency or blockchain technology.

The most we have is historical rumors that Amazon would start accepting Bitcoin as a payment option on its platform, which to this day has not happened.

There was further speculation when Amazon purchased three domain names that hinted a move towards the acceptance of cryptocurrency in October 2017.

Amazon Web Services partnered with R3 late in 2017 to provide one of the first ever distributed ledger technologies on the platform – the Corda project. Ironically, this was a week after Amazon Web Services CEO Andy Jassy said the company wouldn’t launch blockchain-based services.

Despite all of this, we are yet to hear what Bezos thinks about cryptocurrencies and blockchain. Given the scope of his company and his own influence, any commentary from the world’s richest man would no doubt have an effect on the industry.

No. 2: Bill Gates

The principal founder of Microsoft is responsible for developing one of the most popular operating systems around and is ranked as the second richest individual in the world by Forbes. Gates formerly occupied that number one spot from 2014 to 2017.

His wealth is a result of his ingenuity and he has now shifted his focus to philanthropic endeavors. Some of these projects, funded by the Bill and Melinda Gates Foundation, are using blockchain technology to solve problems plaguing developing countries.

The Foundation has supported projects like Bitsoko in Ghana, which has pioneered a Bitcoin merchant payment processing and Bitcoin wallet service in Ghana and other African countries.

With that being said, let’s take a look at some of Gates’ most notable takes on Bitcoin and cryptocurrencies over the past few years.

During a Reddit Ask Me Anything in February 2018, Gates delivered some cynical remarks about cryptocurrencies in general.

Gates hit out at the anonymity of virtual currencies, saying they were ‘not a good thing’ as they hindered the identification of money laundering, tax evasion and funding of terrorism. He also went on to say that cryptocurrencies had “caused deaths in a fairly direct way” because they enabled people to buy hard drugs anonymously:

“Right now cryptocurrencies are used for buying Fentanyl and other drugs so it is a rare technology that has caused deaths in a fairly direct way. I think the speculative wave around ICOs and cryptocurrencies is super risky for those who go long,”

Gates’ latest take on Bitcoin was in an interview on CNBC’s Squawk Box, where he said that he “would short it if there was an easy way to do it”. Gates added that Bitcoin and initial coin offerings (ICOs) offered nothing as an asset class and that people should not expect a rise in value.

While he was fairly harsh on Bitcoin and ICOs, he gave a more measured take on blockchain technology:

“There’s some really good technology in terms of sharing databases and verifying transactions that is talked about as blockchain. That is a good thing.”

Gates’ crypto philanthropy

These sentiments are a far cry to his more optimistic take on Bitcoin in an interview back in 2014 on Bloomberg TV’s Smart Street show. At the time, Gates extolled the virtues of cheap transaction made possible by Bitcoin:

“Bitcoin is exciting because it shows how cheap it can be. Bitcoin is better than currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient.”

At the time, Silk Road and other dark web marketplaces had recently been shut down – but Gates was still of the belief that Bitcoin had a lot to offer:

“The customers we’re talking about aren’t trying to be anonymous. They’re willing to be known, so Bitcoin technology is key and you can add to it or you could build a similar technology where there’s enough attribution where people feel comfortable that this is nothing to do with terrorism or any type of money laundering.”

What is more, the Bill and Melinda Gates Foundation have long been supporting blockchain projects, especially in Africa. For example, in 2015, the Foundation donated $100,000 to Bitsoko, a Kenyan Bitcoin merchant payment platform.

The Foundation has been pushing for the development of virtual currencies in Africa, as they could provide a way for the poor to have access to cheap, transactional services.

While Gates holds Bitcoin at an arm’s length, Microsoft has had a long association with Bitcoin and blockchain technology.

Back in 2014, the company’s website began accepting Bitcoin as a payment method, and its cloud computing platform Microsoft Azure launched its Blockchain Workbench that aims to allow companies develop, test and launch blockchain applications.

No. 3: Warren Buffett

Currently ranked the third richest man in the world behind Jeff Bezos and Gates, Buffett is a household name when it comes to investments and finance.

The current CEO and chairman of multinational conglomerate Berkshire Hathaway, Buffett is considered one of the best investors in the world. When he speaks, people tend to take notice, especially when it comes to money and investments.

The ‘Oracle of Omaha’ has long been a skeptic of Bitcoin. As early as 2014, Buffett has been of the opinion that Bitcoin’s value is merely as a result of its capabilities as a transactional tool, which he believes can and will be replicated, as he told CNBC:

“Stay away from it. It’s a mirage, basically … it’s a method of transmitting money. It’s a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money, too. Are checks worth a whole lot of money just because they can transmit money? Are money orders? You can transmit money by money orders. People do it. I hope Bitcoin becomes a better way of doing it, but you can replicate it a bunch of different ways and it will be. The idea that it has some huge intrinsic value is just a joke in my view.”

It took a good three years for Buffett to grab Bitcoin-related headlines again, as the cryptocurrency began its biggest ever bull-run that eventually led to an all time high of $20,000.

In an interview with CNBC in January 2018, Buffett categorically stated that he would not trade Bitcoin, while predicting that cryptocurrencies as a whole would end badly:

“In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending. Now, when it happens or how, or anything else, I don’t know.”

Ironically, Buffett followed that very statement with another that suggested he wasn’t too clued up on the technical side of Bitcoin:

“We don’t own any, we’re not short any, we’ll never have a position in them. I get into enough trouble with the things I think I know something about. Why in the world should I take a long or short position in something I don’t know about?”

Buffett’s latest critiques of Bitcoin have been more fervorous. In April 2018, he suggested that buying Bitcoin was closer to gambling than investing in the lead up to Berkshire Hathaway’s annual shareholder meeting:

“Now, if you buy something like bitcoin or some cryptocurrency, you don’t really have anything that has produced anything. You’re just hoping the next guy pays more.”

“You aren’t investing when you do that. You’re speculating. There’s nothing wrong with it. If you wanna gamble somebody else will come along and pay more money tomorrow, that’s one kind of game. That is not investing.”

The 87 year old further fueled that flame at the annual meeting where he was asked for his latest take on cryptocurrencies, stating “cryptocurrencies will come to bad endings.”

Buffett’s missed opportunities

While his stance on crypto is pretty clear, in 2017 Buffett admitted that he’d missed the boat on certain technology stocks over the years as reported by Fortune.

While Berkshire Hathaway have invested heavily in Apple of late, Buffett lamented passing the chance to buy Google stock when it launched its initial public offering in 2004 at the company’s 2017 annual meeting.

Buffett’s had a change of heart when it comes to tech companies, saying the market has ‘fundamentally changed’. According to Fortune, in 2017 the top five American tech companies were worth more than $2.5 tln – that is Amazon, Alphabet (formerly Google), Microsoft, Apple and Facebook.

Buffett said the same of Amazon in no uncertain terms: “I was too dumb to realize what was going to happen.”

It begs the question, are Buffett and some of his closest business partners like Charlie Munger missing the trick once again? Only time will tell, as it always does.

No. 4: Mark Zuckerberg

Currently rated the fifth richest individual on Earth by Forbes, Mark Zuckerberg is the cofounder, current chairman and CEO of Facebook.

The man has been in the news a lot lately, due to Facebook’s involvement in the Cambridge Analytica data privacy scandal.

Surprisingly, Zuckerberg has hardly been quoted in the media when it comes to his views on Bitcoin, cryptocurrencies and blockchain technology.

In fact, it’s hard to find much on the subject from Zuckerberg other than his own Facebook post in January 2018.

In that very post, Zuckerberg expressed his goals for 2018, which centered around making his social media platform a better tool for people in their everyday lives. Looking for areas to take inspiration from, Zuckerberg pointed to cryptocurrencies:

“There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people’s hands … i’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

Ironically, Facebook and a number of the world’s biggest social media platforms and search engines announced plans to ban cryptocurrency and ICO advertising on their platforms.

Facebook’s move to ban these adverts are intended to prevent unwary investors from being duped by fraudulent services and scams – which could be an understandable endeavor.

However it ends up painting all cryptocurrencies and blockchain-based services and companies with the same brush, denying them one of the biggest advertising platforms in the world.

Winds of change

As we’ve seen, none of these influential leaders can predict the future, but almost every single one has left indelible marks in their various spheres of influence.

However, slowly but surely, it seems that blockchain technology and cryptocurrencies are creeping into these spheres and these same men will no doubt have very different opinions on the subject matter in the coming years.

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Why Blockchain Values Your Privacy More Than Facebook

The views expressed here are the author’s own and do not necessarily represent the views of Cointelegraph.com.

Recent events surrounding Facebook and Cambridge Analytica have put on display the single biggest danger to your privacy, the government-enabled de facto monopolies on your information. These companies have long been at the forefront of collecting and monetizing information, a practice that was conveniently ignored by regulators until the scandal broke.  

Even so, it’s hard to label Cambridge Analytica’s practices as scandalous considering they had Facebook’s blessing until the tech giant found itself in the crosshairs of the court of public opinion. What stands out most in the reactions is how little tech giants care about users’ privacy. Indeed, Facebook is impressively clear about their ability to collect and sell user data in its privacy policies, showing a complete disregard for any semblance of privacy.

According to Facebook’s policies, the right to use their service means they own any activity or information shared on their platform. Those pictures you posted? They belong to Facebook.  The times you clicked “like” on a product or service? They probably sold that information to the highest bidding advertiser to target you for a product or service. No user data collected by these platforms is sacrosanct regarding user privacy. This is because selling data or sharing it with advertisers is the entire business. At best, privacy plays a tertiary role in company decision-making.  

Avoiding Legal Identity Theft

It is undoubtedly ironic that privacy fears are right in the spotlight at a time when identity theft prevention services are increasingly popular among the web’s ever-expanding population. Insofar as their services are concerned, the main problem facing Facebook and its contemporaries is identity and who owns it. Part of the information Facebook collects includes personally identifiable data. Moreover, the company gathers information about others in your network, a fact many users consider a perverse violation of their implicit trust in social platforms.

Luckily, these malicious acts don’t occur in a vacuum and have increased support for alternatives that separate identity from user data. Unlike Facebook, which binds any marketing data with users’ identities, Blockchain can compartmentalize information and separate data which affects your privacy (identity) from information which is useful for marketers (demographics, preferences, habits, etc.). Moreover, Facebook’s data collection system isn’t opt-in, and not even entirely opt-out, completely dis-empowering users. The decentralized technology (DLT) offers users full power over their data and the ability to directly benefit from sharing it, thanks to an integrated incentive model in the form of cryptocurrency, tokens, or other monetary rewards.  

Per sentiment analysis platform Senno CEO Elad Peled

“I believe users should have the opportunity to share their private data and be compensated for it. The data is physically stored in a decentralized storage space, protected by ECC asymmetric encryption, sharding techniques, and various anti-sybil attack methods. This guarantees that a Cambridge Analytica-like incident can’t happen on our network, while users can enjoy complete data ownership.”

How Privacy Can Be Prioritized

With a more empowering approach to data privacy on blockchain for users, individuals can determine how their information is secured, as well as how to monetize it via data exchanges. Whether it is sold to a marketing firm or shared with a company that is targeting users of a similar demographic, regaining sovereignty of data is now not only possible but much more probable considering the outrage currently targeting Facebook’s data collection practices. VALID Founder Daniel Gasteiger, speaking of his product, highlighted the different approach blockchain takes. He noted that

“By matching identity owners and data consumers directly, the costs currently charged by data aggregators such as social networks, search engine providers, and data brokers, will be omitted.”

While tech giants will continue to rationalize their data harvesting practices and privacy violations as supporting their ability to provide free or better services to users, the argument is disingenuous at best and intentionally false at the very worst.  Blockchain-based initiatives have already effectively nullified that response by prioritizing the safety, security, and privacy of their users’ information. Unlike Facebook and Google, which value user data above all else, blockchain services value their participants. It is the participants that give these initiatives value and deliver the momentum necessary to sustain the associated services, not their data.  

Pic

If each party to a transaction is properly incentivized, the trustless nature of blockchain-based services can help restore the power of the individual. Instead of a future that is beholden to gatekeepers and multinational corporations, blockchain is the key to unlocking a new era of self-sovereignty for its participants. Most platforms operating on DLT are committed to the elimination of costly middlemen that also profit from the sale and purchase of user data. Additionally, the dedication to encryption means that users have more power than ever over their own information and activities without fear of their privacy being infringed upon.  

Finally, accompanying greater privacy controls is users’ newfound ability to determine how and when this information is monetized, retaking sovereignty from the tech giants currently lording over this information. This is the point underlined by Matias Travizano, co-founder & CEO of Wibson, a blockchain solution that seeks to empower individuals to monetize their data, in his remark:

“We are seeing a few approaches to how the personal data ecosystem could develop. What we don’t want is to trade one center of control for another. That’s why [we use] the blockchain to support a decentralized data marketplace, where consumers control their personal information and transact directly with the data buyers. Now is the time for consumers to get proactive and embrace these alternatives. Consumers own their data. They should profit from it.”

Taking the Giants to Task

One of the more glaringly hypocritical admissions by social media giant Facebook transpired during CEO Mark Zuckerberg’s testimony on Capitol Hill, with the remark that “we see Facebook as a platform for all ideas.” That phrase should have been amended to include, “that we deem acceptable.”  The statement, and the acknowledgment that the company monitors and scans private Messenger conversations between users, knowingly blocking content that violates the company’s rules, means that Facebook retains all the control without having to be accountable to its users whatsoever.  

Without greater regulation or rules that suit all participants’ interests, more individuals are likely to flee social networks for more equitable platforms. Furthermore, the company’s disdain for cryptocurrencies, evidenced by its ban on advertisements for new blockchain-based services, highlights the real and growing threats facing these legacy systems as users shift their own priorities and recognize the limitations of the big advertising giants.

At its core, the emphasis of blockchain and by extension cryptocurrencies is unseating entrenched interests across value chains and industries, a deeply troubling phenomenon for a company like Facebook which is exactly that: an entrenched interest. By letting individuals and entities communicate directly without the involvement of middlemen, value extractors are automatically excluded from the equation, incentivizing fairer exchange between parties. As the fight for greater user privacy gains traction, social media platforms might lose out to blockchain-based services that prioritize users over profits, thus restoring the balance of power. With a view towards incentivizing users, blockchain commands all the tools necessary to permanently reshape the privacy dynamic.

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Citizen Zuck: Facebook Claims To Protect Us From Scams, But Who Will Protect Us From Facebook?

The internet’s oligopolies are not fond of Blockchain. Early this year, Facebook broke the ice with instituting a blanket ban on all cryptocurrency and initial coin offering (ICO) ads; not long after, Google and Twitter followed suit. While the stated rationale for the ban is protecting users from “misleading or deceptive practices” that are “frequently associated” with the cryptocurrency business, industry commentators ponder on more mercenary considerations that could likely prompt tech platforms to enforce hostile policies. For one, cracking down on crypto is a relatively inexpensive way to alleviate the public’s wrath, as the narrative of the big tech’s lack of social responsibility is gaining traction in the background. Others in fintech view the ban as an outright manifestation of the Silicon Valley giants’ general antagonism towards the emerging Blockchain-powered economic and social ecosystems. After all, these ecosystems are informed and inspired by the ideas that are potentially threatening to their dominance in the long run.

Furthermore, the ban on cryptocurrency and ICO advertisements is not the only way Facebook is putting pressure on fintech enterprises these days. Consider this: for the most of 2017, Facebook’s rate of approval for Cointelegraph (CT) ads promoting individual articles plateaued at around 75 percent. Over the last few weeks, however, the rate plummeted to just 40 percent, without any notice from the company. It remains to be seen how many people have been saved from misleading and deceptive practices by the virtue of not being exposed to CT’s coverage of the Blockchain world.

Disheartening as it is, such a clampdown is hardly a deviation from how Facebook routinely does its business. For an organization that seeks to occupy a moral high ground as a users’ shield against endemic cryptocurrency fraud, Zuckerberg’s brainchild has for too long had a record of power abuse, arbitrary implementation of its own policies, abridgement of speech, and flippant ignorance of whole shady industries flourishing on its platform. Everything about Facebook, from this ever-expanding list of controversies, to consistently inarticulate and reactive fashion of responding to them, to failure to recognize, let alone address, many societal issues that the company’s operations have engendered, suggest that Mr. Zuckerberg is in no position to dictate what is best for protecting users.

Facebook and social responsibility

Senator Hatch: How do you sustain a business model in which users don’t pay for your service?

Mr. Zuckerberg: Senator, we run ads. (Smirks)

Enumerating Facebook’s recent public blunders would be an utterly futile endeavor. The Cambridge Analytica story and the controversy around Russian trolls’ attempts to manipulate the US domestic political discussion became so high-profile than it is harder to be ignorant about them than otherwise. A point about Cambridge Analytica is that there has been a lot of confusion in media coverage of the matter. An insightful Medium post by Chris Kavanagh does a great job of dissecting the case. It suggests that in 2014, when the data on 87 mln users was made available to the voter-profiling firm, Facebook had a policy called “friends permission,” which allowed developers to legitimately access profiles of all their apps users’ friends. The only thing standing in between the swaths of user data and an army of brokers eager to put it to commercial use was the clause that prohibited developers from selling data to third parties. The enforcement of this policy, however, was lax, giving rise to a whole black market of user data.

This situation is quite indicative of the approach that Facebook adopted on many other instances: if it’s good for business but ethically dubious, let’s keep it in place until there is a really bad outcry over the dubious ethics or malicious outcomes. Recall the “fake news” hype of 2016: it took Donald Trump becoming president, as well as nationwide clamor over the alleged use of strategic misinformation helping him succeed in that, for Facebook to succumb into partnering with independent fact-checkers. It took a national controversy over suppression of conservative news in the “trending” section for Facebook to review the underlying algorithm. It took Cambridge Analytica to begin rethinking the relationships with data brokers and finally considering a possibility of providing outside academics some limited access to a share of the company’s data – researchers have been previously trying to gain some access to Facebook’s black box for years. In each case, these concessions look more like ad hoc public relations moves designed to appease the critics rather than the result of the company’s own drive towards a more responsible conduct.

In responding to mounting pressures from the public and to its own shifting economic priorities, the company often fails to show much concern about the way publishers are heavily reliant on Facebook-referred traffic. Tweaks to the news feed algorithm are at times as drastic as they are frequent. The latest turn towards showing more user-generated content is just another dot on this trend line that has now stretched for years. The platform authoritatively establishes new rules that affect the whole ecosystem, but could then roll them back. Publishers who run services on the Facebook platform that come to compete with some of Facebook’s own features might find themselves in trouble: for instance, soon after the platform launched their video service, it turned out that external videos get differential treatment on the website.

Meanwhile, structural problems that have not yet gained some shocking manifestation or a pointed enough criticism coming from agents of power remain generally below the radar. Despite the years of journalists and academics pointing out the dreadful impacts of the Facebook-led, ad-driven “attention economy” on the overall quality of news, as well as sustainability of local and investigative journalism, we are yet to see any policies addressing those issues beyond vague declarations. On another money-driven note, an enormous affiliate industry, a home for scams whose scale and insidiousness far surpasses what most cryptocurrency hoaxes have to offer, thrives under Facebook’s auspices.

In a more ostensibly political realm, in the process of what many on the right consider censorship, First Amendment-protected expression routinely gets taken down from the platform. But since it comes from the right and usually concerns speech that a middle-of-the-road user would likely consider offensive, no compelling pushback against such speech limitations is ever mounted. However, as we move away from the American shores, Facebook’s principled commitment to liberal values seems to be fading: there is little inclination on behalf of the company to somehow deal with strongmen like the Philippines’ Rodrigo Duterte weaponizing the platform against domestic opposition.

The politics of Facebook

Senator Graham: You don’t think you have a monopoly?

Mr. Zuckerberg: It certainly doesn’t feel like that to me.

Mark Zuckerberg loves to wield the word “community” when talking about his company and its societal role. He used the word again when prompted to explain what Facebook in front of the Senate committee earlier this week. He elaborated on Facebook’s mission to build a “global community” in his lengthy February 2017 essay. His ambitious and somewhat starry-eyed vision, as some observers pointed out, was full of the notions of the potential for positive change yet strikingly devoid of notions of responsibility that comes with such a potential. Zuckerberg has been sticking to his favorite mantra of “we are just a platform and as such have nothing to do with content” for years, and it was not until the recent congressional hearings that he stumblingly admitted that some of responsibility lies with Facebook.

“Community” is a warm word that suggests inclusiveness and highlights horizontal bonds between people. But what kind of a community does Facebook really have, and how is this community governed? Some political scientists are not shy to use a metaphor of an autocratic sovereign state, with King Mark I at its helm. Indeed, Zuckerberg acts as both CEO and controlling shareholder of the company. Having experimented with embedding some democratic forms of corporate governance on the platform, Zuckerberg had abandoned such efforts back in 2012. He also made it clear repeatedly that he is not stepping down anytime soon. The larger the platform grows, the more rigid the structure of governance naturally becomes, while increased institutional inertia renders changes harder to implement. At this point, even if Zuckerberg suddenly embraces a brand new socially responsible agenda, there is no guarantee it would materialize in a few clicks. Still, when coming into Congress’ chambers, Zuckerberg was prepared to oppose any suggestions of the company’s breakup. His leaked notes even specified a patriotic objection to this idea, should it be voiced: such a breakup would strengthen Chinese competitors.

As any sovereign entity, Facebook is also firmly embedded into the political landscape. The fact that the company makes campaign contributions is unsurprising – in fact, those are fairly modest proportionally to the revenues that it commands. What is more interesting is that, according to academic research, Facebook (along with other tech firms) proactively maintains connections with political campaigns on both sides of the ideological spectrum, providing Republican and Democratic candidates alike with cutting-edge tools and expertise to help them make the best out of the platform’s political capacity.

This institutional embeddedness could be one of the reasons why Mark Zuckerberg emerged relatively unscathed from long hours of testifying before both houses of Congress this week. What some expected to become a public scolding has been essentially reduced to an introductory class on social media for the Senators on the Judiciary and Commerce Committees, and a somewhat more heated but still perfectly manageable exchange with House members. Along with producing a constellation of hilarious memes, the hearings posed a troubling question: if the US Congress is unable to corner Facebook’s CEO over what they see as a serious national security concern, then who can? Clearly, the people who are currently in charge of the country are out of step with the brave new world of Facebook politics. So far, the man who is in control of the world’s most influential communication infrastructure has not expressed an inclination to take advantage of their inability to check his influence. Yet, Zuckerberg’s term is unlimited, and the views of lifelong rulers are oftentimes prone to drastic change.

For those disillusioned with the current social media ecosystem and its leadership’s inability to address what is wrong with it, the Blockchain industry has a lot to offer. Steemit, even though not without its own drawbacks, has shown feasibility of the decentralized content production model. New journalistic enterprises such as Civil, DNN, and MediaSifter are putting up architectures that aim at fixing the broken news by using brand new incentive systems and collaborative fact-checking. As the dominant social media economy is undergoing a major crisis of trust, the Blockchain community should be out there, drawing in those who are looking around for an alternative.

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What a Facebook Blockchain Token Might Look Like

Michael J. Casey is chairman of CoinDesk’s advisory board and a senior advisor of blockchain research at MIT’s Digital Currency Initiative.


Mark Zuckerberg, worth $71 billion at just 33, has done rather well by Facebook’s centrally managed system.

Over the past decade and a half, the social media behemoth’s closed-source algorithm has quietly manipulated its millions of users’ news feeds to capture maximum ad dollars and steer them all to Zuck and his shareholders.

So, why is he exploring a more decentralized model?  And what role might crypto technology play in that?

In a New Year’s post to the platform, the Facebook CEO noted (with zero irony, it seems) that

“With the rise of a small number of big tech companies … many people now believe technology only centralizes power rather than decentralizes it.”

And he vowed, on that basis, “to go deeper and study the positive and negative aspects” of decentralizing, people-empowering technologies such as cryptocurrencies and encryption.

It was followed by another post telling users that upcoming changes to their news feeds meant they “can expect to see more from your friends, family and groups” and “less public content like posts from businesses, brands, and media.”

It remains to be seen whether this bet in favor of “meaningful social interactions” over higher traffic content is, as Zuckerberg said, “good for our community and our business over the long term.” The immediate reaction on Wall Street was harsh: Facebook’s shares fell 4.5 percent last Friday following the second post.

It was a predictable response: if Facebook will no longer curate new feeds to emphasize strong, ad-attracting content, then revenues, and returns to shareholders, will decline.

Threats to Facebook

So, why’d Zuck do it?

The prevailing wisdom is he wants Washington off his back.

The Russian political investigation has shone a light on how Facebook uses its proprietary, closed-source algorithm, the core instrument of its centralized power, to deliberately package “like audiences” for advertisers.

More important than allegations that Russian operatives used Facebook to spread disinformation and influence U.S. elections is the fact that Facebook has become so powerful a force that this kind of meddling is possible.

What’s more, its algorithm effectively encourages it, if unwittingly: it naturally creates echo chambers of commonly minded people who will happily re-share and redistribute content they agree with, creating a sticky audience to sell to advertisers.

This happens even, or perhaps especially, when the stories they are sharing are demonstrably fake.

But Zuckerberg is clearly also bothered by rising disaffection among his users, a group to whom cyber security guru Bruce Schneier once offered this warning: “Don’t make the mistake of thinking you’re Facebook’s customer, you’re not – you’re the product.”

It took a while, but many now understand the bum deal they’re getting: they produce and distribute the content that drives traffic on the site, as well as delivering attention to advertisers, but aren’t compensated one penny for it.

To make matters worse, they’re forced to look at content they don’t want to see. (Who else is in the crypto community is sick of James Altucher’s “eccentric bitcoin expert” ads in their Facebook feed?)

The problem is that under the current business model, the more Facebook decentralizes – either by being less interventionist in news feed curation or by following YouTube’s lead and sharing ad revenue with traffic-driving users – shareholders will either get a smaller pie or a smaller piece of it, or both.

On the other hand, if user discontent leads to attrition or even an all-out exodus, it matters not that shareholders are protecting their margins – advertisers will leave, revenues will slide and, eventually, the platform could die.

The rise and fall of MySpace, the once ubiquitous platform that Facebook displaced, is a reminder that the latter’s dominance is not guaranteed.

A token solution?

The resolution of this dilemma may lay with the very technology Zuckerberg has vowed to explore: a crypto-token, call it FBCoin.

To be clear, I have no inside knowledge on Facebook’s plans. This is pure speculation. But, given the company’s past forays, later abandoned, into digital money and payments, I think it’s worth speculating on, especially with the context the CEO has laid out.

It also offers a window into how the center of gravity might move from tokens produced by decentralized app producers to those of established enterprises – for better or worse.

Here’s an admittedly very rudimentary model: Facebook would pre-mine a large pool of tokens, distributing a significant number to shareholders and holding the rest in reserve to distribute to users based on some reliable metric of the traffic their original content generates. Facebook would then mandate that on-platform advertising must be paid for with those tokens. A market would then emerge, into which users could sell, giving them a way to monetize their content creation.

The value of the tokens would float against the dollar, based on demand and supply.

This, I believe, is how Facebook could best resolve its dilemma, giving both shareholders and users a valuable stake in the future growth of its platform under a more decentralized set of rules.

Of course, crypto folks accustomed to thinking of attack models will immediately see dangers here.

There are ways to game traffic data – something that Brave is trying solve with its browser and BAT token – and how does the algorithm know whether something is “original” and not just copied and pasted from someone else?

Ideas for reputation tokens, proof-of-work models to disincentivize the creation of traffic-generating bot armies, and other skin-in-the game solutions will be needed to encourage honesty.

And who would run this? It’s hard to imagine Facebook choosing not to control the market for its own tokens or to centrally run the ledger.

Yet if it wanted to truly unpack the expansive power of network effects, opening up the tokens to a true, decentralized blockchain system and, eventually, a decentralized market could result in far more explosive growth – and, by extension, token-based returns for Facebook’s shareholders.

If Zuckerberg really wants to experiment with decentralized systems, a publicly issued crypto-token would be hell of a way to do it.

Personally, I would much prefer someone else creates a scalable decentralized social media solution to replace Facebook’s insidious centralized algorithm – to do to it what Facebook did to Myspace. Social media badly needs a model that puts control back in the hands of people.

But who knows? Maybe Mark Zuckerberg, who has vowed to give virtually all his wealth away to charity, will recognize that perhaps the most powerful gift he can make to the world is a platform for creativity that empowers people by fairly rewarding their ideas and self expression.

Mark Zuckerberg image via Shutterstock

The leader in blockchain news, CoinDesk strives to offer an open platform for dialogue and discussion on all things blockchain by encouraging contributed articles. As such, the opinions expressed in this article are the author’s own and do not necessarily reflect the view of CoinDesk.

For more details on how you can submit an opinion or analysis article, view our Editorial Collaboration Guide or email news@coindesk.com.

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Zuckerberg Eyeing Out Power of Cryptocurrencies

A man who knows a few things about the power of social and individuals, Mark Zuckerberg, has stated that he will be studying cryptocurrencies further in order to explore their potential for empowering individuals.

The co-founder of Facebook, in what he has called one of his personal challenges for the new year, has stated that the power of decentralized systems like cryptocurrency could help take power away from the centralized system and place it back in the hands of individuals.

Digging deeper

Lauded as an innovator and one of the fathers of social media, Zuckerberg has shown his fascination with cryptocurrencies before, but this latest New Year’s post has indications that he will be investigating its potential much further for potential improvement for Facebook. Zuckerberg said in a Facebook post:

“There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people’s hands…I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

Blockchain social media

There have already been a number of social media platforms based around Blockchain service; however, the firepower of a company like Facebook, which reaches over one bln people on a daily basis investigating cryptocurrencies could be monumental.

Zuckerberg’s overarching message in the post which made mention of Cryptocurrencies was based around “fixing important issues” in technology, media and government.” And, indeed, a technology like Blockchain and cryptocurrencies are being heralded as revolutionary within those fields and with the backing of such an institution, there could be scope for rocketing growth in adoption and recognition for cryptocurrencies.

Take back the power

It is unsurprising to see why Zuckerberg would be interested in a decentralized system when you inspect Social media for its peer-to-peer power. While there is a centralized force on Facebook, it has given individuals a lot of power and a much bigger voice.

A decentralized system like cryptocurrencies can only aid that growth further, and as Zuckerberg states – “put it [power] back into people’s hands.”

Well-known Software Engineer Jameson Lopp explains how, in a monetary space, cryptocurrencies have flipped conventional centralized thinking on its head.

“At least from the monetary standpoint, we said let’s turn this whole thing upside down. Instead of us trusting certain entities, instead, we are going to track everything ourselves, validate our rules and not trust anybody.”

Be it media, social media, finance, investing or any other sector, the traditionalists and the early innovators turning to cryptocurrencies, even to learn, could be the start of something big.

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Ripple Success Tips Chairman For World’s Richest As Zuckerberg Eyes Crypto

Ripple Chairman and Co-founder Chris Larsen has profited so much from the asset’s bull run he could be the world’s richest person.

That’s according to BitFury CEO George Kikvadze, whose made a tweet about Larsen’s likely huge personal wealth gains over the past year.

“At Ripple’s Implied Market Value of $320 bln – Chris Larsen with his 37 percent stake has become the world’s richest person bypassing (Bill Gates) & (Warren Buffett),” Kikvadze noted Wednesday.

Ripple’s XRP token has delighted investors into 2018 with gains of over 35,000 percent, much of that taking place in the last few months.

Shooting up to highs above $3.60 per token, only Coinbase’s announcement that it had “no plans” to add new assets, including XRP, was able to take prices down somewhat.

On the topic of Larsen meanwhile, Forbes gave a more conservative outlook, nonetheless placing the co-founder’s wealth at up to $59 bln.

“That would have briefly vaulted Mr. Larsen ahead of Facebook chief executive Mark Zuckerberg into fifth place on the Forbes list of the world’s richest people,” the New York Times commented on the data.

Zuckerberg had coincidentally hinted at plans to integrate cryptocurrency with unnamed Facebook “services” this week, announcing in a post that he was “interested in going deeper and studying the positive and negative aspects of [technologies like encryption and cryptocurrencies], and how best to use them.”

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Zuckerburg to Study Cryptocurrency in Quest to Decentralize Facebook

Facebook CEO Mark Zuckerberg announced Thursday he plans to study cryptocurrencies and other decentralizing technologies as part of a larger bid to improve the social networking service he founded.

Aptly in a Facebook post, Zuckerberg outlined what he called personal challenges for the year ahead, noting that one is to study the “positive and negative aspects” of cryptocurrency and encryption.

Zuckerberg went on to note that his theme for this year is to focus on “fixing important issues” in technology, media and government. “I’m looking forward to bringing groups of experts together to discuss and help work through these topics,” he wrote.

Still, it’s his comments on decentralization that have the blockchain world astir.

Lauded for its ability to create valuable, global peer-to-peer networks, Zuckerberg called cryptocurrencies one of the most interesting questions in technology right now. He added that today, many have lost in the faith that “technology would be a decentralizing force” and they now believe that technology centralizes power rather than decentralizing it.

He said:

“There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people’s hands…I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

Mark Zuckerberg image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

Posted on

Zuckerberg to Study Cryptocurrency in Quest to Decentralize Facebook

Facebook CEO Mark Zuckerberg announced Thursday he plans to study cryptocurrencies and other decentralizing technologies as part of a larger bid to improve the social networking service he co-founded.

Aptly in a Facebook post, Zuckerberg outlined what he called personal challenges for the year ahead, noting that one is to study the “positive and negative aspects” of cryptocurrency and encryption.

Zuckerberg went on to note that his theme for this year is to focus on “fixing important issues” in technology, media and government. “I’m looking forward to bringing groups of experts together to discuss and help work through these topics,” he wrote.

Still, it’s his comments on decentralization that have the blockchain world astir.

Lauded for its ability to create valuable, global peer-to-peer networks, Zuckerberg called cryptocurrencies one of the most interesting questions in technology right now. He added that today, many have lost faith that “technology would be a decentralizing force.”

He said:

“There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people’s hands…I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

Mark Zuckerberg image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.