8 Thoughts on Facebook’s blockchain announcement

When I left my job at Facebook to start a blockchain-focused VC fund some of my friends thought I was crazy. What a difference a year makes.

Project Libra partner list (source)

Last year when I left my job at Facebook to start a blockchain-focused VC fund some of my friends thought I was crazy.

“You’re leaving a senior role here to start a fund focused on blockchain technology?! Don’t you know there’s no real use case for blockchain? Are you not aware that crypto is only good for criminal activity? Haven’t you heard of the latest scams?”



Fair to say, some of my friends were surprised by my decision.



This prompted me to write a blog post to share the reasoning for my decision. I explained that this isn’t about Facebook (which is an amazing company to work for) but rather about my conviction that blockchain technology is going to introduce a level of innovation at a scale that we’ve never seen before. The world was about to change in fundamental ways and I wanted to be fully involved, helping to fund and support some of the most disruptive blockchain startups.



What a difference a year makes.



This week Facebook announced they are going all-in on blockchain with the upcoming launch of their Libra network. In recent months I’ve stayed quite while rumors continued to swirl about Facebook’s ambitious crypto plans. Now that they have made these plans public, I’d like to share a few thoughts on the implications of this announcement:

This is a watershed moment for the entire blockchain and crypto industry: sure, Facebook is not the first major player to enter the space. Many have done it before. But hey, this is Facebook we’re talking about! One of the biggest, most important and influential companies in the world. Expect more major tech and financial services firms to make similar announcements in the coming months. Where Facebook goes, others often follow. Facebook just became the most important blockchain company in the world: Facebook deserves a lot of credit for making this bold move. Its ability to drive mass adoption of cryptocurrency and blockchain technology is unlike any other. With the press of a button Facebook can bring crypto payments to more than 2 billion users globally across a suite of platforms that include Facebook, Instagram and WhatsApp. The positive knock-on effects on the entire industry cannot be overstated. But wait, Libra is actually about much more than just Facebook: as a first step, Facebook added 28 partners to Libra across various verticals, with major companies such as Mastercard, Visa, Uber and Spotify singing up (each reportedly with a commitment to invest $10MM to run their own node on the Libra blockchain network). This isn’t just about Facebook. It’s a partnership that includes some of the world’s biggest tech and financial services companies. That’s a powerful signal on its own. The blockchain revolution is only getting started: the amount of talent and resources that are going to migrate to the industry is going to have profound implications on the quality and pace of blockchain development moving forward. At the grand scheme of things, whether Facebook succeeds or not isn’t all that important: similar to the early days of the internet, adoption and development will increase exponentially as a result of more talent and capital flowing into the space. Whether Facebook, another major tech company or a new blockchain-native company will ultimately emerge as the winner in the blockchain protocol arms race shouldn’t matter much (unless you’re a shareholder of course). The key insight here is that there’s no stopping the blockchain disruption, regardless of which company ultimately emerges as the winner. Looking at the big picture, the most exciting part about this announcement isn’t related to the product or the go-to-market nuances but rather the opportunity ahead: high fees, slow operations and lack of transparency are going to put traditional banks under serious pressure. In the coming years, blockchain technology is going to gradually “eat” legacy financial systems. This will result in the introduction of a more inclusive, open and efficient financial ecosystem powered by innovative distributed ledger technologies. If you’re running a traditional bank, now is the time to start freaking out: those margins aren’t going to last much longer. If you are an institutional investor, it may be time to re-evaluate your approach: if you haven’t gotten any exposure to the blockchain ecosystem yet, you may want to revisit your portfolio strategy today.

Some of my friends who were dumbfounded by my decision to leave last year to focus full-time on investments in the blockchain space are now asking for advice on these very same topics.



What a time to be alive.