The Ledger Facebook Facebook’s Troubles Underscore Blockchains’ Opportunity
Every action you perform on Facebook—and its sister services like Instagram and WhatsApp—surrenders data to the business’ well-oiled surveillance machinery. Maintaining a presence on the social network means granting the company the right to steward—and sell—your personal information to advertisers. It’s been said a zillion times, but it bears reiterating: If you’re not paying, you’re the product.
Why should Facebook rake in tens of billions of dollars a year on the backs of its 2 billion-plus user base? It’s the people’s data, after all. Shouldn’t they—I mean, we—benefit from it?
In the inaugural episode of Balancing The Ledger, Fortune’s new show covering all things fintech-, crypto-, and blockchain-related, Fortune digital editor Andrew Nusca discusses the potential for distributed, blockchain-based social networks to displace Facebook, alongside senior writers Robert Hackett and Jen Wieczner. After the recent Cambridge Analytica controversy, which involved a political consultancy misappropriating and misusing people’s data in an attempt to influence the 2016 presidential election, Facebook has come under intense fire. A fomenting #deletefacebook campaign has attracted the likes of billionaire Elon Musk and, poignantly, Brian Acton, an entrepreneur who made billions on his sale of WhatsApp to Facebook in 2014, among others.
“Right now there’s a groundswell of people who want something else,” Nusca said.
“If you could only keep control of your data with blockchain technology, then this is a way so you wouldn’t have to give it over to companies like Facebook,” said Wieczner, noting that centralized entities are exactly what blockchains were invented to get around. Using such tools might mean people would “not have to entrust [data] to these companies who have proven time and time again that they cannot be trusted with your data.”
To be sure, blockchain-based alternatives are a ways away from toppling Facebook, one of the world’s most valuable corporations. Some of the most popular distributed ledger platforms, like Bitcoin and Ethereum, still have numerous issues to figure out—not least among them how to scale. But these technologies are under active development, and could, perhaps, become standard in time to come.
For now, if you delete or deactivate Facebook, you’ll likely have to deal with being a little out of the loop among friends and family. “It’s kind of a difficult thing here to get a bunch of users on board with a new technology,” as Hackett noted. But if blockchain-based projects can latch onto network effects, similar to the ones that turbo-boosted Facebook’s growth, without coming apart at the seams, then they just might provide the basis for the next paradigm in social networking.