Author: Josh Constine

Say “Aloha”: A closer look at Facebook’s voice ambitions

Facebook has been a bit slow to adopt the voice computing revolution. It has no voice assistant, its smart speaker is still in development, and some apps like Instagram aren’t full equipped for audio communication. But much of that is set to change judging by experiments discovered in Facebook’s code, plus new patent filings.

Developing voice functionality could give people more ways to use Facebook in their home or on the go. Its forthcoming Portal smart speaker is reportedly designed for easy video chatting with distant family, including seniors and kids that might have trouble with phones. Improved transcription and speech-to-text-to-speech features could connect Messenger users across input mediums and keep them on the chat app rather than straying back to SMS.

But Facebook’s voice could be drowned out by the din of the crowd if it doesn’t get moving soon. All the major mobile hardware and operating system makers now have their own voice assistants like Siri, Alexa, Google Assistant, and Samsung Bixby, as well as their own smart speakers. In Q2 2018, Canalys estimates that Google shipped 5.4 million Homes, and Amazon shipped 4.1 million Echoes. Apple’s HomePod is off to a slow start with less than 6 percent of the market, behind Alibaba’s smart speaker according to Strategy Analytics. Facebook’s spotty record around privacy might deflect potential customers to its competitors.

Given Facebook is late to the game, it will need to arrive with powerful utility that solves real problems. Here’s a look at Facebook’s newest developments in the voice space, and how its past experiments lay the groundwork for its next big push.

Aloha Voice

Facebook is developing its own speech recognition feature under the name Aloha for both the Facebook and Messenger apps, as well as external hardware — likely the video chat smart speaker it’s developing. Code inside the Facebook and Messenger Android apps dug up by frequent TechCrunch tipster and mobile researcher Jane Manchun Wong gives the first look at a prototype for the Aloha user interface.

Labeled “Aloha Voice Testing”, as a user speaks while in a message thread, a horizontal blue bar expands and contracts to visualize the volume of speech while recognizing and transcribing into text. The code describes the feature as having connections with external WiFi or Bluetooth devices. It’s possible that the software will run on both Facebook’s hardware and software, similar to Google Assistant that runs both on phones and Google Home speakers.

Facebook declined to comment on the video, with its spokesperson Ha Thai telling me “We test stuff all the time – nothing to share today but my team will be in touch in a few weeks about hardware news coming from the AR/VR org.” It unclear if that hardware news will focus on voice and Aloha or portal, or if it’s merely related to Facebook’s Oculus Connect 5 conference on September 25th.

A source previously told me that years ago, Facebook was interested in developing its own speech recognition software designed specifically to accurately transcribe how friends talk to each other. These speech patterns are often more casual, colloquial, rapid, and full of slang than the way we formally address computerized assistants like Amazon Alexa or Google Home.

Wong also found the Aloha logo buried in Facebook’s code, which features volcano imagery. I can confirm that I’ve seen a Facebook Aloha Setup chatbot with a similar logo on the phones of Facebook employees.

If Facebook can figure this out, it could offer its own transcription features in Messenger and elsewhere on the site so users could communicate across mediums. It could potentially let you dictate comments or messages to friends while you have your hands full or can’t look at your screen. The recipient could then read the text instead of having to listen to it like a voice message. The feature could also be used to power voice navigation of Facebook’s apps for better hands-free usage.

Speaker And Camera Patents

Facebook awarded patent for speaker

Facebook’s video chat smart speaker was reportedly codenamed Aloha originally but later renamed Portal, Alex Heath of Business Insider and now Cheddar first reported in August 2017. The $499 competitor to the Amazon Echo Show was initially set to launch at Facebook’s F8 in May, but Bloomberg reported it was pushed back amid concerns that it would exacerbate the privacy scandal ignited by Cambridge Analytica.

A new patent filing reveals Facebook was considering building a smart speaker as early as December 26th, 2016 when it filed a patent for a cube-shaped device. The patent diagrams an “ornamental design for a speaker device” invented by Baback Elmieh, Alexandre Jais, and John Proksch-Whaley. Facebook had acquired Elmieh’s startup Nascent Objects in September of that year and he’s now a technical project lead at Facebook’s secretive Building 8 hardware lab.

The startup had been building modular hardware, and earlier this year he was awarded patents for work at Facebook on several modular cameras. The speaker and camera technology Facebook has been developing could potentially evolve into what’s in its video chat speaker.

The fact that Facebook has been exploring speaker technology for so long and that the lead on these patents is still running a secret project in Building 8 strengthens the case that Facebook has big plans for the voice space.

Patents awarded to Facebook show designs for a camera (left) and video camera (right)

Instagram Voice Messaging

And finally, Instagram is getting deeper into the voice game too. A screenshot generated from the code of Instagram’s Android app by Wong reveals the development of a  voice clip messaging feature heading to Instagram Direct. This would allow you to speak into Instagram and send the audio clips similar to a walkie-talkie, or the voice messaging feature Facebook Messenger added back in 2013.

You can see the voice button in the message composer at the bottom of the screen, and the code explains that to “Voice message, press and hold to record”. The prototype follows the recent launch of video chat in Instagram Direct, another feature TechCrunch broke the news on thanks to Wong’s research. An Instagram spokesperson declined to comment, as is typical when features are spotted in its code but aren’t publicly testing yet, saying “unfortunately nothing more to share on this right now.”

The Long Road To Voicebook

Facebook has long tinkered in the voice space. In 2015, it acquired a natural language processing startup Wit.ai that ran a developer platform for building speech interfaces, though it later rolled Wit.ai into Messenger’s platform team to focus on chatbots. Facebook also began testing automatically transcribing Messenger voice clips into text in 2015 in what was likely the groundwork for the Aloha feature seen above. The company also revealed its M personal assistant that could accomplish tasks for users, but it was only rolled out to a very limited user base and later turned off.

The next year, Facebook’s head of Messenger David Marcus claimed at TechCrunch Disrupt that voice “is not something we’re actively working on right now,” but added that “at some point it’s pretty obvious that as we develop more and more capabilities and interactions inside of Messenger, we’ll start working on voice exchanges and interfaces.” However, a source had told me Facebook’s secretive Language Technology Group was already exploring voice opportunities. Facebook also began testing its Live Audio feature for users who want to just broadcast sound and not video.

By 2017, Facebook was offering automatic captioning for Pages’ videos, and was developing a voice search feature. And this year, Facebook began trying voice clips as status updates and Stories for users around the world who might have trouble typing in their native tongue. But executives haven’t spoken much about the voice initiatives.

The most detailed comments we have come from Facebook’s head of design Luke Woods at TechCrunch Disrupt 2017 where he described voice search saying it was, “very promising. There are lots of exciting things happening…. I love to be able to talk to the car to navigate to a particular place. That’s one of many potential use cases.” It’s also one that voice transcription could aid.

It’s still unclear exactly what Facebook’s Aloha will become. It could be a defacto operating system or voice interface and transcription feature for Facebook’s smart speaker and apps. It could become a more full-fledged voice assistant like M but with audio. Or perhaps it could become Facebook’s bridge to other voice ecosystems, serving as Facebook’s Alexa Skill or Google Assistant Action.

When I asked Woods “How would Facebook on Alexa work?”, he said with a smile “That’s a very interesting question! No comment.”

Facebook assigns you a fake news flagging trustworthiness score

A new way to attack Facebook is to fraudulently report a news story as false in hopes of reducing its visibility, either because someone wants to censor it or just doesn’t agree with it. Sometimes known as “brigading”, a concerted effort by trolls to flag a piece of content can reduce its visibility. Facebook now sends stories reported as false to third-party fact checkers, and these purposefully inaccurate reports can clog the already-overcrowded queues that fact checkers struggle to worth through.

That’s why Facebook gives users a trustworthiness score ranging from 0 to1 dependon the reliability of their flags of false news, the Washington Post reports. If they flag something as false news but fact checkers verify it as true, that could hurt their score and reduce how heavily Facebook factors in their future flagging. If users consistently report false news that’s indeed proven to be false, their score improves and Facebook will trust their future flagging more.

Facebook’s News Feed product manager Tessa Lyons confirmed the scoring system exists. There’s currently no way to see your own or someone else’s trustworthiness score. And other signals are used to compute the score as well, though Facebook won’t reveal them for fear of trolls gaming the system.

Friend Ranking Scores

This isn’t the only way Facebook ranks users, though. It assigns you a shifting score of affinity towards each of your friends that determines how frequently you see them in the News Feed. This “friend ranking” score is essentially a measure of graph distance from you to someone else.

If you like a ton of someone’s posts, get tagged in photos with them, search for them, view their profile, communicate with them, have lots of mutual friends, are in the same Groups, and have similar biographical characteristics like location and age, your score towards them is lower and you’ll see more of them in feed. However, they have a different score for you depending on their behavior, so constantly viewing someone else’s profile won’t make you show up in their feed more if they don’t reciprocate the interest.

I first reported on these friend scores almost exactly seven years ago, and you can still view them for yourself using this browser bookmarklet built by Jeremy Keeshin. Visit this site, drag the “Facebook Friends Rankings” link into your desktop browser’s bookmark bar, open Facebook while logged in, and tap the bookmarklet to reveal the Friend Ranking scores of your friends. It snoops the Facebook JavaScript to pull out the scores. The people you see at the top are who you’re closest to.

Facebook clearly The need for this score highlights the difficulties of Facebook’s battle against fake news. Between subjectivity and purposeful trolling, there’s a lot noise coming in with the signal about what should be removed. Anyone saying Facebook should have easily solved the fake news problems is likely underappreciating the nuance required and the intelligent human adversaries Facebook must defeat.

Facebook has a huge array of signals it can use to calculate Friend Rankings or trustworthiness scores. The question will be whether it can intelligently sort those signals to make coherent inferences about what to show us and when to believe us.

Facebook cracks down on opioid dealers after years of neglect

Facebook’s role in the opioid crisis could become another scandal following yesterday’s release of harrowing new statistics from the Center for Disease Control. It estimated there were nearly 30,000 synthetic opioid overdose deaths in the US in 2017, up from roughly 20,000 the year before. When recreational drugs like Xanax and OxyContin are adulterated with the more powerful synthetic opioid Fentanyl, the misdosage can prove fatal. Xanax, OxyContin, and other pain killers are often bought online, with dealers promoting themselves on social media including Facebook.

Hours after the new stats were reported by the New York Times and others, a source spotted that Facebook’s internal search engine stopped returning posts, Pages, and Groups for searches of “OxyContin”, “Xanax”, “Fentanyl”, and other opioids, as well as other drugs like “LSD”. Only videos, often news reports deploring opiate abuse, and user profiles whose names match the searches are now returned. This makes it significantly harder for potential buyers or addicts to connect with dealers through Facebook.

However, some dealers have taken to putting drug titles into their Facebook profile names, allowing accounts like “Fentanyl Kingpin Kilo” to continue showing up in search results. It’s not exactly clear when the search changes occurred.

On some search result pages for queries like “Buy Xanax”, Facebook is now showing a “Can we help?” box that says “If you or someone you know struggles with opioid misuse, we would like to help you find ways to get free and confidential treatment referrals, as well as information about substance use, prevention and recovery.” A “Get support” button opens the site of The Substance Abuse and Mental Health Services Administration, a branch of the US department of health and human services that provides addiction resources. Facebook had promised back in June that this feature was coming.

Facebook search results for many drug names now only surface people and video news reports, and no longer show posts, Pages, or Groups which often offered access to dealers

When asked, Facebook confirmed that it’s recently made it harder to find content that facilitates the sale of opioids on the social network. Facebook tells me it’s constantly updating its approach to thwart bad actors who look for new ways to bypass its safeguards. The company confirms it’s now removing content violating its drug policies, it’s blocked hundreds of terms associated with drug sales from showing results other than links to news about drug abuse awareness. It’s also removed thousands of terms from being suggested as searches in its typeahead.

Prior to recent changes, buyers could easily search for drugs and find posts from dealers with phone numbers to contact

Regarding the “Can we help?” box, Facebook tells me this resource will be available on Instagram in the coming weeks, and it provided this statement:

“We recently launched the “Get Help Feature” in our Facebook search function that directs people looking for help or attempting to purchase illegal substances to the SAMHSA national helpline. When people search for help with opioid misuse or attempt to buy opioids, they will be prompted with content at the top of the search results page that will ask them if they would like help finding free and confidential treatment referrals. This will then direct them to the SAMHSA National Helpline. We’ve partnered with the Substance Abuse & Mental Health Services Administration to identify these search terms and will continue to review and update to ensure we are showing this information at the most relevant times.”

Facebook’s new drug abuse resource feature

The new actions follow Facebook shutting down some hashtags like “#Fentanyl” on Instagram back in April that could let buyers connect with dealers. That only came after activists like Glassbreakers’ Eileen Carey aggressively criticized the company demanding change. In some cases, when users would report Facebook Groups or Pages’ posts as violating its policy prohibiting the sale of regulated goods like drugs, the posts would be removed but Facebook would leave up the Pages. This mirrors some of the problems it’s had with Infowars around determining the threshold of posts inciting violence or harassing other users necessary to trigger a Page or profile suspension or deletion.

Facebook in some cases deleted posts selling drugs but not the Pages or Groups carrying them

Before all these changes, users could find tons of vendors illegally selling opioids through posts, photos, and Pages on Facebook and Instagram. Facebook also introduced a new ads policy last week requiring addiction treatment centers that want to market to potential patients be certified first to ensure they’re not actually dealers preying on addicts.

Much of the recent criticism facing Facebook has focused on it failing to prevent election interference, privacy scandals, and the spread of fake news, plus how hours of browsing its feeds can impact well-being. But its negligence regarding illegal opioid sales has likely contributed to some of the 72,000 drug overdose deaths in America last year. It serves as another example of how Facebook’s fixation on the positive benefits of social networking blinded it to the harsh realities of how its service can be misused.

Last year, Facebook CEO Mark Zuckerberg said that learning of the depths of the opioid crisis was the “biggest surprise” from his listening tour visiting states across the U.S, and that it was “really saddening to see.” The fact that he called this a “surprise” when some of the drugs causing the crisis were changing hands via his website is something Facebook hasn’t fully atoned for, nor done enough to stop. The new changes should be the start of a long road to recovery for Facebook itself.

Coinbase acquires Distributed Systems to build ‘Login with Coinbase’

Coinbase wants to be Facebook Connect for crypto. The blockchain giant plans to develop ‘Login with Coinbase’ or a similar identity platform for decentralized app developers to make it much easier for users to sign up and connect their crypto wallets. To fuel that platform, today Coinbase announced it has acquired Distributed Systems, a startup founded in 2015 that was building identity standard for dApps called the Clear Protocol.

The five-person Distributed Systems team and its technology will join Coinbase. Three of the team members will work with Coinbase’s Toshi decentralized mobile browser team, while CEO Nikhil Srinivasan and his co-founder Alex Kern are forming the new decentralized identity team that will work on the ‘Login with Coinbase’ product. They’ll be building it atop the “know your customer” anti-money laundering data Coinbase has on its 20 million customers. Srinivasan tells me the goal is to figure out “How can we allow that really rich identity data to enable a new class of applications?”

Distributed Systems had raised a $1.7 million seed round last year led by Floodgate and was considering raising a $4 million to $8 million round this summer. But Srinivasan says “No one really understood what we’re building”, and it wanted a partner with KYC data. It began talking to Coinbase Ventures about an investment, but after they saw Distributed Systems’ progress and vision, “they quickly tried to move to find a way to acquire us.”

Distributed Systems began to hold acquisition talks with multiple major players in the blockchain space, and the CEO tells me it was deciding between going to “Facebook, or Robinhood, or Binance, or Coinbase”, having been in formal talks with at least one of the first three. Coinbase “were able to convince us they were making big bets, weaving identity across their products.” The financial terms of the deal weren’t disclosed.

Coinbase’s plan to roll out the ‘Login with Coinbase’-style platform is an SDK that others apps could integrate, though that won’t necessarily be the feature’s name. That mimics the way Facebook colonized the web with its SDK and login buttons that splashed its brand in front of tons of new and existing users. This made turned Facebook into a fundamental identity utility beyond its social network.

Developers eager to improve conversions on their sign up flow could turn to Coinbase instead of requiring users to set up whole new accounts and deal with crypto-specific headaches of complicated keys and procedures for connecting their wallet to make payments. One prominent dApp developer told me yesterday that forcing users to set up the MetaMask browser extension for identity was the part of their signup flow where they’re losing the most people.

This morning Coinbase CEO Brian Armstrong confirmed these plans to work on an identity SDK. When Coinbase investor Garry Tan of Initialized Capital wrote that “The main issue preventing dApp adoption is lack of native SDK so you can just download a mobile app and a clean fiat to crypto in one clean UX. Still have to download a browser plugin and transfer Eth to Metamask for now Too much friction”, Armstrong replied “On it :)”

In effect, Coinbase and Distributed Systems could build a safer version of identity than we get offline. As soon as you give your social security number to someone or it gets stolen, it can be used anywhere without your consent and that leads to identity theft. Coinbase wants to build a vision of identity where you can connect to decentralized apps while retaining control. “Decentralized identity will let you prove that you own an identity, or that you have a relationship with the Social Security Administration, without making a copy of that identity” writes Coinbase’s PM for identity B Byrne, who’ll oversee Srinivasan’s new decentralized identity team. “If you stretch your imagination a little further, you can imagine this applying to your photos, social media posts, and maybe one day your passport too.”

Considering Distributed Systems and Coinbase are following the Facebook playbook, they may soon have competition from the social network. It’s spun up its own blockchain team and an identity and single sign-on platform for dApps is one of the products I think Facebook is most likely to build. But given Coinbase’s strong reputation in the blockchain industry and its massive head start in terms of registered crypto users, today’s acquisition well positions it to be how we connect our offline identity with the rising decentralized economy.

HQ Trivia downloads spiral downward as it hits Apple TV

HQ Trivia’s app store ranking has continued to sink the past three months, but it’s hoping a new version on your television could revitalize growth. HQ today launched an Apple TV app that lets users play the twice-daily live quiz game alongside iOS Android players. “Everything about the game is still the same – same questions, same time, same rules” says a spokesperson, except you’ll play with the Apple TV remote instead of their phone’s screen. But that might not be enough to get HQ’s player count rapidly growing again.

According to App Annie’s app store ranking history, on iOS HQ has fallen from the #1 US Trivia game to #10, from the #44 game to #196, and from the #151 overall app to #585. It’s exhibited a similar decline on Android.

 

The question is whether this is just a summer lull as people spend time outside and students aren’t locked in the schedule of school, or if HQ is in a downward spiral beyond seasonal fluctuations. But if we zoom out, you can see that HQ has been in dropping down the charts through the school year since peaking in January. At one point it climbed as high as the #3 game and #6 overall app. The app’s record high of concurrent players has also declined from a peak of 2.38 million in late March.

Meanwhile, new clones keep popping up. After the initial wave of Chinese live trivia apps, now US television studios are getting into the mix. This week Fox unveiled ‘FN Genius’ which looks and works almost exactly that same as HQ. There are also new 1-on-1 trivia games like ProveIt that let players bet real money on whether they can outsmart their opponent.

Fox’s FN Genius. Image via Deadline

With themed games, celebrity hosts, big jackpots like a recent $400,000 prize, and new features like the ability to see friends’ answers, HQ has tried to keep its app novel. But it’s also encountered cheaters and people playing with multiple phones that make normal players feel like they’ll never win. While the live aspect adds urgency, it can also feel interruptive with time as users aren’t always available for its noon and 6pm pacific games. HQ may need to launch a second game app, come up with some new viral hooks, or find ways to revive lapsed players if it’s going to make good on the $15 million its parent company raised in March.

 

Facebook buys Vidpresso’s team and tech to make video interactive

Zombie-like passive consumption of static video is both unhealthy for viewers and undifferentiated for the tech giants that power it. That’s set Facebook on a mission to make video interactive, full of conversation with broadcasters and fellow viewers. It’s racing against Twitch, YouTube, Twitter and Snapchat to become where people watch together and don’t feel like asocial slugs afterward.

That’s why Facebook today told TechCrunch that it’s acqui-hired Vidpresso, buying its seven-person team and its technology but not the company itself. The six-year-old Utah startup works with TV broadcasters and content publishers to make their online videos more interactive with on-screen social media polling and comments, graphics and live broadcasting integrated with Facebook, YouTube, Periscope and more. The goal appears to be to equip independent social media creators with the same tools these traditional outlets use so they can make authentic but polished video for the Facebook platform.

Financial terms of the deal weren’t disclosed, but it wouldn’t have taken a huge price for the deal to be a success for the startup. Vidpresso had only raised a $120,00 in seed capital from Y Combinator in 2014, plus some angel funding. By 2016, it was telling hiring prospects that it was profitable, but also that, “We will not be selling the company unless some insane whatsapp like thing happened. We’re building a forever biz, not a flip.” So either Vidpresso lowered its bar for an exit or Facebook made coming aboard worth its while.

For now, Vidpresso clients and partners like KTXL, Univision, BuzzFeed, Turner Sports, Nasdaq, TED, NBC and others will continue to be able to use its services. A Facebook spokesperson confirmed that customers will work with the Vidpresso team at Facebook, who are joining its offices in Menlo Park, London and LA. That means Facebook is at least temporarily becoming a provider of enterprise video services. But Facebook confirms it won’t charge Vidpresso clients, so they’ll be getting its services for free from now on. Whether Facebook eventually turns away old clients or stops integrating with competing video platforms like Twitch and YouTube remains to be seen. For now, it’s giving Vidpresso a much more dignified end than the sudden shutdowns some tech giants impose on their acquisitions.

We’ve had a lot of false starts along the way . . . We finally landed on helping create high quality broadcasts back on social media, but we still haven’t realized the full vision yet. That’s why we’re joining Facebook,” the Vidpresso team writes. “This gives us the best opportunity to accelerate our vision and offer a simple way for creators, publishers, and broadcasters to use social media in live video at a high quality level . . . By joining Facebook, we’ll be able to offer our tools to a much broader audience than just our A-list publishing partners. Eventually, it’ll allow us to put these tools in the hands of creators, so they can focus on their content, and have it look great, without spending lots of time or money to do so.”

Facebook already has some interactive video experiments out in the wild. For users, it recently rolled out its Watch Party tool for letting Groups view and chat about videos together. It’s also trying new games like Lip Sync Live and a Talent Show feature where users submit videos of them singing. For creators, Facebook now let streamers earn tips with its new Stars virtual currency, and lets fans subscribe to donating money to their favorite video makers like on Patreon. And on the publisher side, Facebook Live has also built tools to help publishers pull in social media content. It’s even got an interactive video API that it’s developing to allow developers to launch their own HQ Trivia-game shows.

But the last line of Vidpresso’s announcement above explains Facebook’s intentions here, and also why it didn’t just try to build the tools itself. It doesn’t just want established news publishers and TV studios making video for its platform. It wants semi-pro creators to be able to broadcast snazzy videos with graphics, comments and polls that can aesthetically compete with “big video” but that feel more natural.

Every internet platform is wising up to the fact that web-native creators who grew up on their sites often create the most compelling content and the most fervent fan bases. Whichever video hub offers the best audience growth, creative expression tools and monetization options will become the preferred destination for creators’ work, and their audiences will follow. Vidpresso could help these creators look more like TV anchors than selfie monologuers, but also help them earn money by integrating brand graphics and tie-ins. Facebook couldn’t risk another tech giant buying up Vidpresso and gaining an edge, or wasting time trying to build interactive video technology and expertise from scratch.

What the Facebook Crypto team could build

Facebook is invading the blockchain, but how? Back in May Facebook formed a cryptocurrency team to explore the possibilities, and today it removed a roadblock to revealing its secret plans.

Former head of Messenger David Marcus who leads the Facebook Crypto team today announced he was stepping down from the board of Coinbase, the biggest crypto startup. Marcus was formerly the president of PayPal and helped Facebook Messenger adopt chatbot commerce and peer-to-peer payments, so he was both a natural choice for Coinbase’s board and Facebook’s blockchain skunklabs.

Facebook told CoinDesk this was to avoid the appearance of a conflict of interest, which is exactly what it was. Marcus provided a statement to TechCrunch explaining he was stepping down “because of the new group I’m setting up at Facebook around blockchain” noting that “Getting to know Brian [Armstrong, CEO of Coinbase], who’s become a friend, and the whole Coinbase leadership team and board has been an immense privilege. I’ve been thoroughly impressed by the talent and execution the team has demonstrated during my tenure, and I wish the team all the success it deserves going forward.”

Now Facebook is cleared to start publicly talking about its plans, though it hasn’t yet. So what could Facebook be building? I see three main opportunities:

3% Off With FaceCoin

Facebook could build a cryptocurrency wallet with its own token that people could use to pay for things with partnered businesses or that they discover through Facebook ads. Since blockchain can make transactions free or very cheap, Facebook and its partners could sidestep the typical credit card processing fees. That would potentially allow Facebook to offer users  “3% off purchases made with FaceCoin” or a similar promotion. 

Discounts like this could draw users into Facebook’s cryptocurrency feature. It’s well positioned to run such the scheme thanks to its extensive connections with over six million advertisers and 65 million businesses that have Facebook Pages. The social network could eat the costs of running the program, passing the transaction fee savings on to the users, while touting partnerships with Facebook Crypto as ways to boost sales for businesses. That could in turn get clients to spend more money on Facebook ads, as the discounts would enhance conversion rates and drive sales.

P2P and Micropayments

Facebook already lets you send friends money through Messenger for free, but only with a connected debit card or PayPal account. Facebook could offer cryptocurrency-based payments between friends to let a wider range of users settle debts for shared dinners or taxis through Messenger. Users might fund their Facebook Crypto wallet once with a payment, possibly with a one-time transaction fee, and then they could send and receive the tokens for free from then on. Blockchain becoming the backbone of peer-to-peer payments could further increase engagement with Messenger for its 1.3 billion users.

Meanwhile, Facebook could also potentially use cryptocurrency to let fans send micropayments to their favorite creators, like video stars and game streamers. Facebook recently debuted its own virtual (not crypto) currency called Facebook Stars that users can buy and send to creators, who can then cash them out for one cent each. Facebook takes an undisclosed cut but gives the majority of what users spend on Stars to the creator.

Facebook could potentially undergird this system with cryptocurrency to alleviate transaction fees and let people tip creators smaller amounts of cash for exclusive content or just to show their appreciation. Facebook started with a minimum of $3 tips at a time so that transaction fees wouldn’t be too high of a percentage of the total purchase. A cryptocurrency solution could let users efficiently tip much smaller amounts, which could lure people towards the behavior. The more money Facebook can deliver to internet celebrities, the more popular ones it can recruit to live on its platform and the more content they’ll produce.

Facebook Stars. Image via KiwiFarm

Facebook Connect For Crypto

A top problem in the world of decentralized blockchain apps is how you bring your identity with you. Securely connecting your wallet, blockchain-based virtual goods, and biographical info to new dApps can be a laborious process. Users typically have to type in long, complicated alphanumeric keys that are tough to remember and annoying to input. User experience design around identity in the blockchain space lags far behind what we’re used to with mainstream social apps like Facebook Connect, which uses a OAuth single sign-on to let you instantly join apps without creating a new username and password, or filling out a profile and uploading a photo.

Facebook could use its expertise in operating a popular identity platform to ease login to dApps. While the company has faced plenty of privacy issues and attacks on election integrity, Facebook has a strong record of not being traditionally hacked. It hasn’t suffered a massive user data breach like LinkedIn, Twitter, and other social networks. Using an overtly centralized identity system to connect with decentralized apps might be counterintuitive, but Facebook could deliver the UX convenience necessary to unlock a new wave of blockchain utility.

For now it’s unclear if Facebook will end up directly competing with Coinbase in the exchange and wallet space, or if it might instead partner with the blockchain mainstay to accelerate its efforts. But with deep pockets, tons of tech talent, and ubiquity amongsts social networkers and businesses, Facebook Crypto’s primary limits are its ambitions and the extent of user trust.