|Headquarters||Menlo Park, CA|
|Key People||Mark Zuckerberg, founder, CEO; David Marcus, Head of Blockchain Initiatives|
|Products||Social networking website, software app development and e-commerce platform, messaging apps|
Facebook was founded by Mark Zuckerberg while he attended Harvard University in 2004. He was accused of stealing the idea for the social networking site by the Winklevoss twins, who were working on a similar project at the time called ConnectU. Cameron and Tyler Winklevoss later sued Zuckerberg. They settled in 2008 for a total of $65 million worth of cash and equity.
In January 2018, Facebook banned all ads on the website pertaining to "initial coin offerings and cryptocurrency," as well as binary options, in an effort to curb the influence of financial services that were associated with "misleading or deceptive promotional practices." Following the news, prices for bitcoin decreased by 12 percent.
In February 2019, Zuckerberg posted a video interview with Harvard Law professor Jonathan Zittrain on Facebook. In the interview, Zuckerberg discussed the pros and cons of blockchain technology, particularly its relevance to user privacy and security of information. He said that using distributed ledger technology could potentially "empower" individual users while adding accountability to companies that use their information, but that it could raise "the question of consent and how people can really know that they’re giving consent to an institution."
In March 2019, Coindesk reported that Facebook was advertising for 25 blockchain-related positions within the company. All of these were based in the company's headquarters in Menlo Park, California. The position titles included "production manager," "business operations manager," "data scientist," "software engineer," and "growth product manager."
Products and Services
Facebook allows users to make text posts, share photos and videos, post links to other websites, start groups with other users, and develop and use apps. Facebook's software platform allows app developers to monetize their apps through e-commerce transactions or allowing advertisements in their content.
In December 2018, Bloomberg reported that Facebook was in the process of developing a cryptocurrency for WhatsApp, a messaging app for the website that is popular in India. Facebook said the blockchain project was focusing on creating a stablecoin that would allow users to transfer money to other users. At the time of the announcement, the company was in the process of working out its strategy for implementation as well as custody and regulatory issues. The project is being developed by Facebook's blockchain initiatives department, a small team headed by former PayPal president David Marcus, who joined Facebook in 2014.
In April 2019, the New York Times reported that venture capitalist Tim Draper was planning on meeting with representatives from Facebook to discuss Facebook's stablecoin project.
In May 2019, the Wall Street Journal reported that Facebook had begun recruiting several financial firms and online merchants for "Project Libra," a company-wide initiative to create a stablecoin that could be used on Facebook's platform to make purchases from other users, as well as throughout the Internet. According to people familiar with the matter, "Project Libra"'s development was largely secretive, and involved investments from Visa Inc., Mastercard Inc., and the payment processor First Data Corp. The WSJ story also mentioned that Facebook was considering paying its users with fractions of the stablecoin as a reward for viewing ads, interacting with content developed by Facebook or third parties, or shopping, similar to a loyalty rewards program. Facebook was seeking up to $1 billion in investments for this project. A source allegedly close to the project confirmed these details with The Block, which published a similar story on the same day.
On May 3, 2019, Coindesk published a story that prominent crypto economist Christian Catalini, a professor at the Massachusetts Institute of Technology (MIT), was on leave from employment at the university and was working on Facebook's stablecoin development team.
In June 2019, J. Christopher Giancarlo said that representatives from Facebook and the CFTC were in “very early stages of conversations” about regulating "GlobalCoin," reportedly the name of Facebook's stablecoin. Later that month, Facebook made a series of announcements. The company hired Ed Bowles, a senior British bank lobbyist, to help the company overcome future regulatory obstacles, especially in Europe. On June 13, the Wall Street Journal reported that Facebook had signed up over a dozen companies to back its new cryptocurrency including Visa Inc., Mastercard Inc., PayPay Holdings Inc., and Uber Technologies Inc. Each of these companies would invest around $10 million to fund the creation and governance of the new cryptocurrency.
Cheddar, an online business, technology, and culture news service, reported on February 4, 2019, that Facebook had taken on most of the members of the staff of Chainspace, a London smart contract consulting firm. Chainspace was a start-up created by researchers from University College London. Though the company was still developing its technology, according to its website it is being used on the European project "DECODE", a data security initiative that aimed at giving people greater ownership of their personal data. The Alpha version of this program's technology is being tested in Barcelona and Amsterdam.
Independent Cryptocurrency Governance Foundation
In June 2019, news broke that Facebook was planning to launch an independent foundation to manage its cryptocurrency network. According to sources close to the matter, Facebook planned to license the right to operate nodes on its network, charging companies $10 million each for the privilege of doing so. Those who do will be able to send a representative to join the foundation, according to the report. Facebook plans to launch the network with 100 nodes, generating an estimated $1 billion in licensing fees, using those fees to back its cryptocurrency with a basket of currencies and low-risk securities from companies around the world. The network will also partner with merchants who will accept the cryptocurrency as payment, and will also create physical cryptocurrency ATMs.
- Mark Zuckerberg - Founder, CEO
- David Marcus - Head of Blockchain Initiatives
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- Facebook’s Blockchain Hiring Spree Continues With 5 New Job Postings. Coindesk.
- What Is Facebook?. Lifewire.
- Facebook Is Developing a Cryptocurrency for WhatsApp Transfers, Sources Say. Bloomberg.
- Venture Capitalist Draper to Meet With Facebook on Crypto Fund. Bloomberg.
- Facebook Building Cryptocurrency-Based Payments System. Wall Street Journal.
- Project Libra: Facebook to launch stablecoin-based payments network. The Block.
- MIT’s Christian Catalini Said to Be Working on Facebook’s Cryptocurrency. Coindesk.
- Facebook in talks with US regulator over digital currency. Financial Times.
- Facebook hires British bank lobbyist ahead of cryptocurrency launch. Financial Times.
- Facebook’s New Cryptocurrency, Libra, Gets Big Backers. Wall Street Journal.
- Facebook Makes First Blockchain Acquisition With Chainspace: Sources. Cheddar.
- A planetary scale smart contracts platform. Chainspace.
- Plunge in crypto sets stage for Facebook and other tech giants to hire blockchain experts. CNBC.
- Report: Facebook plans to create independent foundation to manage its cryptocurrency; will charge members $10M licensing fees for right to operate node. The Block.