VentureBeat: Whatsapp gateway could propel Facebook’s crypto ambitions

Facebook discreetly formed an internal unit early in 2018 dedicated to exploring blockchain technology led by David Marcus, former president of well-trusted PayPal. Then in December, we learned the company is aiming to build a stablecoin, a cryptocurrency tethered to the US dollar, in order to let WhatsApp users easily send money globally. Enthusiasts believe this combination of Whatsapp and stablecoin could be the breakthrough the crypto industry needs to go mainstream. But it seems equally likely, given Facebook’s sordid 2018, that the social network could do more damage to the crypto space.

Facebook’s mainstream reputation has been on a steady decline since the Cambridge Analytica scandal in early 2018, with user confidence in the company plunging 66% between the hack and the resulting congressional hearings in April. Since then, public perception has been so much on the decline that according to June data from the Pew Research Center, 42 percent of Facebook users reduced daily activity and engagement on the platform. (Just three months earlier, Pew’s survey found 74% of users visited daily and over half, 51 percent, went to the site numerous times throughout the day.)

If anything, 2018 taught the tech industry that if consumers didn’t care about data privacy and trust before, they do now, and they’re proving that with the brands and platforms they chose to support. Between users denouncing the platform and prosumers having no idea what or how to approach crypto, it’s hard to be convinced that Facebook could be a driving force behind mainstream adoption.

Still, WhatsApp is Facebook’s best gateway. Choosing WhatsApp as a platform meant an instant user group. North Americans may be unfamiliar with the app, but its user base in Q4 2017 was about 1.5 billion, and the platform sees around 60 billion messages sent per day (per a Q4 2017 earnings call) compared to 1.3 billion monthly users and 1 billion daily active users in July 2017. Although those numbers don’t top Facebook’s 2018 third quarter of 2.27 billion monthly active users, WhatsApp has proven itself to be a global messaging goldmine and one of Facebook’s most strategic purchases.

With direct access to all WhatsApp users, who may or may not have access to payment systems such as Paypal or Zelle, Facebook could easily become the number one peer-to-peer payment system “by accident” as it did with news consumption (43% of Americans get some of their news from Facebook).

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