Reports say Facebook is developing its own cryptocurrency, which could be used to pay users a “data dividend” to maintain brand loyalty.

The social media wars continue to heat up. Facebook has long been a dominant player, and it appears Mark Zuckerberg intends to maintain that edge. BitcoinerX reported a few months ago that the social media giant was working on creating its own cryptocurrency, and now there is speculation that said virtual currency could be used to pay a “data dividend” to its users.

Facebook Embracing Crypto

A few months back, reports surfaced that Facebook was creating a cryptocurrency for its WhatsApp platform. This project is being overseen by David Marcus, the former president of PayPal. The project is reportedly staffed by 50 engineers, and the entire team is housed in a separate building that requires specific key-card access.

The crypto being developed is a stablecoin, which will likely be tied to the dollar or euro. A stablecoin is a smart choice as it negates the volatility often associated with the cryptocurrency marketplace. The Facebook cryptocurrency is reportedly going to be rolled out in India on WhatsApp as that the country boasts 200 million users of the app.

Speculation is now suggesting that the stablecoin will be used across the full spectrum of Facebook products: WhatsApp, Facebook Messenger, and Instagram. If so, this would be tremendous for crypto adoption as over 2.7 billion people use such platforms on a monthly basis. Even more intriguing is the idea of a “data dividend” that could be paid to users.

Maintaining Customer Loyalty

A recent article from Fortune discusses the benefits of Facebook paying users a “data dividend” via the platform’s stablecoin. This dividend would be derived from the monetary value generated by the social media platform as people use it and advertisers fork over cash for advertising or for the data generated.

Facebook generated revenue of $55.838 billion in 2018 alone. The average user of the platform does not get any cut of that financial pie despite the fact it’s their use of the platform that creates the revenue. The Fortune article suggests that a good way to ensure that people remain loyal to Facebook and continue to use it on a regular basis is to get a payout in virtual cash.

The article’s author is not alone in this thought. Chris Hughes, a co-founder of Facebook, suggested such a thing last year. He said:

We should not only expect that these companies better protect our data – we should also ensure that everyone creating it shares in the economic value it generates.

He added:

We have all pitched in to create a new commonwealth of information about ourselves that is bigger than any single participant, and we should all benefit from it.

This “data dividend” is a novel idea, and it could work. Would you be more willing to log into Facebook or use their apps if you got some stablecoins every month for doing so? Of course, the company would have to be willing to shave off a few percentage points from their profits to have such a system, and there would be some work needed to determine how much a person would get.

The reality is that people willingly hand over a frightening amount of personal information to use social media, and this information is making people like Zuckerberg insanely rich. Why shouldn’t the people whose info generates the wealth not be allowed to have some crumbs of their own?

Do you think Facebook will use its future stablecoin to pay a “data dividend” to its users? Let us know in the comments below.

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