Facebook recently announced a rebrand to Meta, and officially transitioned into a metaverse company. What exactly does that mean, and will there be blockchain and crypto involved?
Facebook recently took the financial world by storm, announcing a significant move beyond the social media status and rebranding as Meta. Apparently, the brand change will only affect the parent company, not Facebook, Whatsapp and Instagram, but the transition towards the metaverse will occur across the board.
Since then, a couple of legitimate questions have arisen among the cryptocurrency community.
Will the tech giant support and embrace blockchain technology to facilitate the implementation of its metaverse ecosystem? And to what extent?
Facebook’s Interest in the Metaverse
Facebook’s journey into the metaverse started in 2019 as one of the first tech giants to explore the virtual world. In crypto terms, it seemed such a long time ago. After the acquisition of Oculus in 2014 and the newly announced Horizon virtual world and meeting space, the company's involvement with VR opened the door to the metaverse world for the social network giant.
In parallel, the ideation and launch of Libra occurred in 2019, which was recently rebranded into Diem and stored into the Novi wallet, previously known as Calibra.
Besides this confusing array of names, the world of decentralization and permissionless governance never seemed to reflect Facebook Libra’s crypto ambitions anyway.
Since it’s not based on blockchain pillars, many did not even consider Libra a proper cryptocurrency. Moreover, the regulatory hurdles that it had to face prevented the project from kicking off.
The Coinbase Partnership
In an attempt to launch wallet Novi in partnership with Coinbase, the tech giant had to endure yet another pushback lately — a few politicians had reaffirmed that Facebook is not trustworthy, especially regarding consumers’ safety, let alone managing the users' money.
The Coinbase trial includes custody of Novi users' funds in USDP, a stablecoin tied to USD created by blockchain platform Paxos. The pilot will start off with users in Guatemala and most of the US; however, it’s not yet clear how fees will be calculated as a result of exchange rates, liquidity, or other variables.
The Metaverse and Blockchain
The metaverse can exist without cryptocurrencies and blockchain. However, the true metaverse is intrinsically linked with the blockchain concept of an open, interoperable network where virtual assets are exchanged and stored via a trustless and verifiable ledger.
In his recent founder’s letter, Mark Zuckerberg affirmed that the Metaverse “will require not just novel technical work — like supporting crypto and NFT projects in the community — but also new forms of governance.”
Will this description be applied to Meta’s governance that should be permissionless and open, according to the most basic blockchain standards?
Meta has over 3500 new jobs listed on their website, and a bunch of them requires deep knowledge of blockchain technology, prompting that Meta might be open to embracing the tech. NFTs will also play a role in the Facebook metaverse, and so will cryptocurrencies. In what terms and to what extent the integration will occur in the ecosystem remains to be seen.
Decentraland or Fortnite?
To date, Mark Zuckerberg hasn’t revealed any details that could help determine how Facebook’s metaverse will relate to blockchain technology.
According to a recent interview with Gary Vee, who has been a huge NFTs proponent lately, the Facebook founder revealed that he has tried his hands on various metaverses and crypto products.
So will Meta look like the decentralized world of Decentraland and the user-generated crypto and blockchain platform Sandbox? Both platforms are governed by a decentralized autonomous organization (DAO) that owns and oversees smart contracts and digital assets in the ecosystem.
Tokens like Mana and SAND, respectively Decentraland and the Sandbox cryptocurrencies, are freely exchanged with virtual lands and non-fungible tokens that allow virtual assets ownership in the parallel world. They keep growing in terms of market cap and user base with a future that looks very promising.
Or will, in contrast, Meta look like a version of Epic Games’ Fortnite or Roblox that use separate elements of the blockchain like NFTs and cryptocurrency but walk on their own feet without the public and permissionless structure of open blockchains?
A Centralized or Decentralized Metaverse?
Many believe Zuckerberg’s vision for the metaverse seems to have little to do with the open, interoperable perception that blockchains offer and much to do with a centralized vision and hierarchical control of the virtual spaces.
Blockchain’s features enable secure, public and irreversible transactions putting the network of users in control, rather than centralized entities with private access to transaction history. For instance, a blockchain-based token is more reliable than a centralized currency that could be lost or stolen if the system's security gets compromised.
As blogger and investor Andrew Steinwold put it, "if Facebook turned into a decentralized organization where it was user-owned and governed, that would be a true part of the metaverse.”
Blockchain has actual value if it’s decentralized, trustless and open, or does not serve its purpose. Will Facebook leadership click with this framework?
Blockchain Can Help With Facebook’s Privacy Concerns
Zuckerberg should undoubtedly be concerned about the data protection of his users, given the recent run-ins with authorities over users privacy and anti-competitive behavior.
“Privacy and safety need to be built into the metaverse from day one along with open standards and interoperability.” he highlights in his letter.
By protecting consumers transaction data with cryptography, blockchain technology can increase user privacy, data protection, data ownership and store digital identities and assets.
Digital identities only require public and private keys to access the commerce and gaming industry of the metaverse, and the private keys are mathematically impossible to guess from the public keys. Security is considerably increased, and users are more protected against hackers’ attacks.
Why Should Facebook Finally Embrace the Metaverse?
In his founder’s letter, Facebook's CEO continues by saying that the metaverse “should be seen as a convergence of creators and developers creating an interoperable ecosystem and “unlock a massively larger creative economy than the one constrained by today’s platforms and their policies.”
Blockchain technology is there to unlock the type of economy he urges to seek. The question is if he’s ready to compromise power and control to benefit a more inclusive and distributed ecosystem.
Since its data leak issues, the social media company has experienced a declining curve. Users seem to increase in emerging markets, but they leave the platform favoring more open solutions in the developed world. On such a basis, we can’t help but wonder if the metaverse created by the tech company will have an impact.
Will the majority of the metaverse users and consumers ultimately join a Facebook permissioned network restrained by burdensome regulations?
Or will they follow an open, decentralized model where people can freely create and trade arts, music, content, real estate and all sort of commerce with fewer boundaries?
It will be an exciting competition to watch in the years to come!
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