What If Facebook Had a Cryptocurrency?
When Facebook launched in 2004, bitcoin was just a pipedream. The fundamental components of blockchain technology had been developed, but the first blockchain’s creator had yet to pull them all together. That would not occur for another four years.
Before Facebook entered the mind of Mark Zuckerberg, DigiCash, the first digital cash system, had already gone bankrupt. Zuckerberg was 14 years old at the time.
On the day of Facebook’s launch, e-gold had a million open accounts but was neck deep in fighting phishing scams, hackers, and other Internet nasties. By the time bitcoin saw the light of day, e-gold had gone out of business. Adam Back’s proof-of-work concept was a play toy for other developers, though it was recognized to have its problems.1 Nick Szabo would release his Bit gold concept a year later.2
It’s one thing to theorize on the principles of decentralization or to wax poetic on the benefits of a new technology. It’s quite another to see it on a practical level. Come with me on a magic carpet ride to see what Facebook might look like today, from a user’s perspective, if it had launched with a cryptocurrency.
Facebook Actually Does Have a Cryptocurrency
It’s not that farfetched an idea. Facebook has already proposed a digital currency.
In June 2019, Facebook announced plans to launch a cryptocurrency called Libra. In its initial concept, Libra was to be managed by an independent foundation called Libra Association. It was also to be backed by a reserve of multiple assets. The Libra cryptocurrency would be issued on its own independent blockchain called Libra Blockchain.
One of the things that made the Libra Association and its cryptocurrency an interesting project was the initial plan of including 100 founding members. The list of founding members included finance industry heavyweights such as Visa, Mastercard, and PayPal.3 It also included smaller players such as Kiva and PayU. Technology companies Vodafone, Uber, and Lyft also signed on. Venture capital firms Ribbit Capital, Andreessen Horowitz, Union Square Ventures, and Thrive Capital were also on board. But plans were derailed when a groundswell of opposition globally began to scrutinize the project.
Almost immediately, world powers put a magnifying glass on Facebook’s plans. Within a month, the U.S. House of Representatives Committee on Financial Services asked Facebook and its partners to halt development on the project.4 They had questions. In fact, Zuckerberg appeared before Congress in October 2019 to answer their questions.5 Central banks in Europe also had concerns.6 India regulators said they would likely ban Libra.7 Other government regulators did too. What were these governments afraid of?
Donald Trump, president at the time, said Libra could be used for terrorist activity and drug deals.8 Sure it could, in the same way that cash is. However, since Facebook has proven itself effective in shutting down the president’s digital soap box, it’s likely they could also be at least somewhat effective in detecting illegal activities on the platform. I’m not holding my breath, but at what cost to user privacy?
Speaking of privacy, considering the Cambridge Analytica scandal, Facebook doesn’t exactly have a good track record. There’s also the fear of hacking. If Facebook’s platform was hacked, how many millions of users would lose cryptocurrency held on the platform?
These are all valid concerns and several of them are reasons authorities have given for scrutinizing Facebook’s plan for a cryptocurrency, but I think there was a bigger issue. With more than 28.5 percent of the world’s population using Facebook9 (and almost 70 percent of the North American population) (Figure 6.1), it is likely that a Facebook-controlled cryptocurrency could crash world economies. If users could transact with each other across Facebook properties—primarily through Facebook Messenger and WhatsApp, the two properties the initial rollout was targeted for—they may very well opt to never use national currencies again.
Countries with weak currencies, such as Venezuela and Iran,10 could see a complete halt in real-world economic activity as citizens flocked to Facebook apps to use a currency backed by stronger assets. That would make an immediate impact with devastating effects in real-world political climates. It would take longer in countries with strong economies, but as real-world currencies continued to devalue over time, more people would adopt Libra and abandon the dollar, the euro, and pound. That might take a few years, but it’s a real fear when you’re a government official and you know a large portion of your population spends more time on Facebook than researching political candidates.
Figure 6.1 In January 2020, Facebook’s user base consisted of 28.5 percent of the world population and 68.5 percent of the North American population
Credit: Taylored Content. Based on data provided by InternetWorldStats.com
Another problem a Libra launch would have caused is mass migration to Facebook. Again, this would be more evident in smaller countries with weak currencies, but you’d see citizens in these countries using WhatsApp and Facebook Messenger more for everyday financial transactions. In other words, a Facebook cryptocurrency would be a game changer globally. On the other hand, if Facebook had launched with a cryptocurrency, as insignificant as it was in 2004, no one would have cared.
Unlike bitcoin, a Facebook cryptocurrency would be centralized11 and subject to private control and manipulation in ways that make central bank monetary policies seem like a five-year-old’s birthday party. That’s something to be concerned about.
After being scrutinized heavily, several large companies pulled out of the Libra project. PayPal, Visa, and Mastercard were three of the largest. Without their financial strength, Facebook’s Libra would have been doomed to failure. While these losses did injure the Facebook plan, it didn’t kill it. In December 2020, Libra rebranded as Diem with a planned launch in 2021.12 But there are some fundamental differences between the new plan and the old plan.
Billed as a digital payment system, the Diem cryptocurrency will be backed by cash or cash equivalents and short-term government securities.13 In effect, the plan is to make it more like a stablecoin—more like Tether and less like bitcoin.
In October 2021, Facebook launched its digital wallet Novi without Diem14. To date, Diem has yet to launch, contingent upon approval from U.S. regulators15.
In its whitepaper, Diem outlines four key changes to its cryptocurrency to appease regulatory concerns around the world. These are:
1. The addition of a single currency stablecoin without abandoning plans for a multicurrency cryptocurrency
2. The addition of a compliance framework to enhance “the safety of the Libra payment system”
3. “Forgoing the future transition to a permissionless system while maintaining its key economic properties”
4. And “building strong protections” into the payment system’s design
Analyzing what these four key changes mean is beyond the scope of this chapter; however, it’s important to point out that Facebook’s Diem would still have a real-world impact if it survived, which is looking less likely by the day. In fact, Bloomberg reported in late January 2022 that Diem is looking to sell its assets and return capital back to its investors.16
So, I circle back to my initial question. What would Facebook look like today if it had launched out of the gate with a cryptocurrency?
Meet Facebit: The Cryptocurrency You Should Have Had
It’s not difficult to imagine what Facebook might look like today if a cryptocurrency had been embedded in the business plan from the beginning. The only thing that might have changed is the underlying technology of the platform and whatever effects that would have on user experience. Otherwise, Facebook could theoretically operate much the same way it does today with the added benefit to users that they could earn cryptocurrency from the content they post on the website.
How Facebook Users Would Earn Cryptocurrency (if They Could)
Let’s start with the meat and potatoes of our fictional Facebook’s value proposition. As a social media website, the platform exists solely to allow users an opportunity to post content that is important to them with a few rules about community standards. If users keep it clean, and free of hate speech and other Internet nasties, they can post whatever they want. If Facebook had a cryptocurrency, users could earn Facebit for posting cat memes and selfies with their lunch at the Bupkus Cafe.
But let’s back up a second and look at the blockchain technology itself, which generates the cryptocurrency. Every cryptosocial site has one. Some are built on a standalone blockchain, like Steemit, while others are built on another blockchain such as Minds (on Ethereum). The difference is significant. We’ll assume Facebook built its own blockchain.
Next, we’ll need to determine the consensus mechanism for Facebook’s make-believe blockchain—we’ll call it Facechain. Let’s assume Facechain uses the delegated proof-of-stake (DPOS) consensus mechanism, which is popular in the cryptosocial space. Unless something better comes along, DPOS will likely become the standard for cryptosocial blockchains.
If you’ll recall, DPOS depends on blockchain users (in this case, that would be every user on the Facechain) voting for network validators. The validators authorize the blocks that contain your payment data. One could conceivably make a full-time income as a Facechain validator and never post any content to the platform. It’s all based on the percentage of cryptocurrency earned among each participant on the blockchain to produce each block.
In other words, if we assume that Facechain rewarded users based on the following parameters, then we could assume that Facechain validators may earn doggone good money just validating blocks.
1. Poster—Let’s assume posters earn 60 percent of each Facebit created from their content on Facechain.
2. Engaged Facechainers—When someone on Facebook comments on a post, likes it, or shares it, they’re called an engaged Facechainer (my term). Such individuals divide amongst themselves 20 percent of all Facebit created by a post they engage with on the blockchain.
3. Validators—Validators earn 15 percent of Facebit created by blocks they validate on the blockchain. Most of that, two-thirds, goes to the first validator to approve a block.
4. Facebook—Facebook itself earns the remaining 5 percent for each Facebit created on the blockchain.
One further assumption needs to be made. If you don’t set a payout period, every single post could feasibly earn cryptocurrency in perpetuity. To prevent that from happening, let’s assume Facebook caps payouts to one month. No post older than one month earns any Facebit no matter how much engagement it has. This forces all users to continue creating new content rather than reposting or re-engaging with old content just for the purpose of earning Facebit (who wants to see a two-year-old video of Old Knockbunyan’s siamese cat drinking milk from a tennis shoe for the 1,000th time?).
It also means that each creator wouldn’t see payment for their posts for a month after the validation of the blocks containing those posts. That’s not a bad thing, but it’s worth noting.
In January 2021, Facebook users posted more than 100 billion messages every day.17 Let’s assume each post created .005 Facebits. The breakdown for each person involved in the creation of that Facebit would look like this:
• Person creating content earned .003 Facebits
• All engaged Facechainers shared .001 Facebits per post engaged with
• Validators shared 0.00075 Facebits for each block validated, and each block would contain data for several posts and comments
• Facebook earned 0.00025 Facebits for each post
Based on these numbers, Facebook would have earned 25,000,000 Facebits daily in January 2021, or 775,000,000 Facebits for the entire month. If Facechainers posted 100 billion messages every day all year long, Facebook would earn a total of 9,125,000,000 Facebits for the entire year. If we assume Facebit’s value had risen to a modest $1.25 since 2004, Facebook’s income from posts in 2021 would amount to $11,406,250,000.
Facebook earned an annual revenue of $85,695 million,18 or
$85.6 billion in 2020. More than $84 billion of that was in advertising. Comparatively, $11.4 billion is small, but Facebook is currently earning nothing from user-generated posts apart from advertising. Besides, the platform could have earned fees for crypto transactions, advertising, peer-to-peer transactions, and other channels.
What’s far more exciting is how much income Facebook posters might have made in this scenario. At 100 billion posts per day, Facebook users would have earned a cumulative 300 million Facebits, or $375 million daily. That’s a total of $136,875,000,000 annual income for all posters combined. If we apply the 80/20 rule, the top 20 Facebook posters would earn $109.5 billion in 2021 between them, an average of $5.475 billion each.
Validators could have done well too. If we assume each validated block contained data for 5 Facebook posts, Facebook’s validators would have earned $15 million daily. Total income for all validators in 2021 would be $5.475 billion. Again, assuming the 80/20 rule, the top 20 validators would earn more than $4.3 billion, or $219 million each on average.
Facebook had 1.84 billion daily active users in December 202019, which means the average Facebook user in our fantasy scenario would earn a measly $59.51 a year. Right now, Facebook and its advertisers are the only entities making money off cat memes and selfies.
These tiny fragments of value add up over time. With 100 billion messages posted every day, users of our fantasy Facechain would earn a total of 300 million Facebits today alone while engaged Facechainers would earn 100 million Facebits. If you’re a typical Facebook user, you’d earn from both of those pools.
While it might be depressing to read what the average Facebook user could earn using these figures, keep in mind that half of them would be above the average. A good number will be in the top tier income earners. If history could be rewritten, it’s likely we’d be reading about Facebook millionaires just like we read about YouTube and Microsoft millionaires. But that’s only if Facebook posters had been generating cryptocurrencies for the past 18 years.
Let’s Get Real: How You Could Have Earned Facebit (if There Was a Facechain)
If someone had told you, in February 2004, that a new website called Facebook was paying users to post content they were already posting on MySpace and earn money doing it, you’d have thought they had PVC pipe for body parts. If they’d have said you had the potential to quit your day job because you were making more on Facebook, you’d have been sure they were smoking something illegal.
Great waves begin as ripples. Every tsunami starts as a baby swell, called a “capillary” wave by surfers. Sure, it may be prompted by a huge explosion (a volcanic eruption or an earthquake on the sea floor), but the wave created by that explosion starts small and grows. The process may take a millisecond, but it’s a process, nonetheless. The same is true of cryptosocial earnings.
There’s an old riddle, probably as old as money itself, that asks, “Would you rather have $1 million today or 1 penny on the first day, twice as much the second day, doubled again the third day, and so on for 30 days, each day receiving twice as much as you received the day before?”
It’s a trick question. If you opt for the penny today, you’d only receive $5.12 on day 10.20 On day 20, your payout would be just over $5,000. You wouldn’t break $1 million until day 28. On day 30, however, you’d receive a total of $5,368,709.12. On the last three days, you’d receive a total of more than $9 million. All because you had the patience, and the wisdom, to wait it out. This illustration is typically used to show how compound interest works. Cryptosocial earnings can work the same way.
Meet Bob the Facemeister
By the end of launch year, Facebook had 1 million active monthly users.21 If we assume the valuation was the same in December as in February, 1 million users earning 60 percent of the value would have tallied just $3 per month. Hardly encouraging but let me introduce you to Bob.
Let’s say Bob joined Facebook on the day of launch. February 4, 2004. In the last month of that year, he’d have to split $3 with 1 million other users—a whopping 300 thousandth of a penny.
Of course, Bob’s no dummy. He’s got vision. He does one thing well. His one big contribution to Facebook, day in and day out, is making fun of Mark Zuckerberg. Every single post for 18 years is a satirical post about Facebook’s founder. And Bob earns 60 percent of every Facebit generated by those posts.
Figure 6.2 The value of Facebit, Facebook’s fictitious cryptocurrency, year by year from 2004 through 2021. A cryptocurrency’s market value determines its real value in terms of USD or other real-world currencies. As demand increases for a cryptocurrency, its value could rise even as daily fluctuations are expected
Credit: Taylored Content
Let’s say he posts 50 times a day. Every day. (For comparison’s sake, the average Facebook user posts 54 times a day). How much can he earn making fun of Mark Zuckerberg 50 times a day?
On August 4, 2013, the earliest date for which CoinMarketCap has data for XRP, Ripple’s cryptocurrency was trading at a price of .005886.22 On April 8, 2021, it was at $1.06. Polkadot, on the other hand, launched in August 2020 at $2.90 and was at $41.71 on April 8, 2021. Different cryptocurrencies, different trajectories. To follow Bob’s progress, we’re going to assume a modest trajectory for Facebit. We’ll say it launched out of the gate at $.02 U.S. dollar (USD) and was valued at $10.50 in 2021 (Figure 6.2). As a side note, I’ll say that, based on Facebook’s growth and reputation over the years, these valuations are very conservative.
You might notice that Facebit’s fictitious value fluctuates from year to year. That’s normal. The value of any cryptocurrency rises and falls minute to minute based on supply and demand, market activity, and significant events, both internal and external. Much like the stock market. As Facebook’s platform grows in number of users, it would be expected that its cryptocurrency would become more valuable as more people express an interest in it (both for investment and utility purposes). Likewise, as users begin to use the cryptocurrency and spend it on things such as advertising and buying items from other Facebook users, the more the marketplace itself values the cryptocurrency, leading to dips and peaks in value.
While Facebit’s fictitious value would fluctuate from day to day, for the purpose of this case study, I’m going to assume that the values shown in Figure 6.2 are constant within the year noted.
In this scenario, Bob’s 50 Facebook posts per day in 2004 would generate a total of .25 Facebits (.005 per post). Since Bob would get 60 percent of those, his daily income would be .15 Facebits in 2004. At a value of 2 cents per Facebit, that’s a total daily income of .003 cents. Multiply that by 365 and Bob’s first year income from making fun of Mark Zuckerberg all day every day would be a measly $1.095 (if Facebook had launched on January 1). But Bob is smart. He keeps his Facebit in his Facechain wallet and keeps posting funny pictures of Mark Zuckerberg. Zuck doesn’t care because he’s making money too.
At the end of 2005, Facebook had 5.5 million active monthly users.23 Throughout 2005, Bob the Facemeister continued posting 50 times a day for a total of 18,250 times that year. His posts generated a total of 91.25 Facebits valued at .39 USD each. Bob’s earnings for the year would be $21.3525 from 54.75 Facebits (60 percent of the total his posts generated).
In 2006, Bob earned $53.655 on his 54.75 Facebits.
In April 2007, when Facebook had 20 million users24, Bob’s 54.75 annual Facebits earned him a total income of $72.27.
Again, because Bob is diligent, smart, and visionary, he kept his Facebits on Facebook where they belong. His total earnings so far, from 2005 to 2007, was $148.3725.
In August 2008, Facebook had 100 million users.25 Bob continued his diligent publishing pace of 50 posts per day. At the end of the year, he had earned $47.085. His total Facebit income to date was $195.4575.
In 2009, Bob earned a Facebook income of $54.2025. His total Facechain income for the past five years was $249.66.
Keeping the same diligent pace, year after year, Bob continued to make fun of Mark Zuckerberg. Every time Facebook made the news, Bob created a new post and satirized Facebook and its CEO. With each post, Bob became more popular. His posts received more shares, more likes, and more comments. He never relented. His total income at the end of 2021 was $3,633.21.
If that income doesn’t impress you, ask yourself how much you are making from your Facebook posts right now. Also consider the income potential if Bob was an above-average poster? If he had posted 200 times a day instead of 50, his Facebit income would be more than $2,000 in 2021 alone.
If that still seems low, consider that Bob is making money doing something he’d already be doing. He’s not spending additional time on Facebook. He’s converting the time he’s already spent into a few extra dollars. I haven’t even talked about other income variables such as staking, how much he could have earned by liking, commenting, and sharing the posts of others, or acting as a block validator.
Also, keep in mind that Bob is one person whose productivity was slightly less than average. And keep in mind that Facechain features such as advertising, post boosting, group and page management, and other platform activities could have earned Bob even more income if he’d had the opportunity to utilize them. For the rest of this chapter, we’ll explore some of those options to see how Bob could have increased his monthly income.
The Value of Staking Facebit
Because Facechain uses the DPOS consensus mechanism, Facebit holders can stake their cryptocurrency to increase their clout on the blockchain.
What that means, in simple terms, is that if you have 500 Facebits in your account at Facechain and your buddy from the other side of town has 5,000 Facebits, his influence on the blockchain is greater than yours. But that’s true only if you are staking your holdings.
There are several ways that staking can take place on a blockchain. Steemit has users move their STEEM into a special holding category called Steem Power. Users call it SP for short. The more SP a user has, the more their votes count when they vote for content. That, in turn, earns them and the content publisher more rewards.
The math can get a little funky, but here’s the nutshell version. In the first year that Bob started posting his satirical potshots at Mark Zuckerberg, his earnings were small. Just as well, his ability to stake those earnings was almost nonexistent. Over time, as he grew his account and earned more Facebit, his ability to stake that Facebit grew. If he chose to stake it, his power and influence on Facechain could grow with it.
Suppose that when Bob joined Facebook he purchased 10,000 Facebits and staked them immediately. The result would have been an automatic increase in power and influence. Essentially, a shortcut. As Facebit’s value grew, so too would the value of Bob’s staked Facebit.
Keeping the same values mentioned above, Bob’s initial investment in Facebit would have been only $200. In one year, that would have grown to $3,900. Assuming he staked his initial investment and never withdrew any of it, in 2021, the value of Bob’s initial $200 investment would be worth $105,000. What an incredible return! Bob would have earned money even if he’d never posted on Facebook.
Let’s take it a little further. What if Bob had added 10,000 Facebits to his account every year from 2004 to 2018? He would have $1.89 million in his Facechain account.
With staking, every time a user adds the staked cryptocurrency to his account, his power and influence on the blockchain increases. If he removes any staked cryptocurrency, his power and influence on the blockchain diminishes.
With more than 100,000 Facebits in his staking account, Bob could remove some of that in increments any time he wants without diminishing his power and influence relative to the power and influence of others on the blockchain. Let’s say that in January 2021, Bob removed 50,000 Facebits, a value of $525,000, and bought a house. Because Facebits are now valued at $10.50 each, he would still have more than $1.3 million in his Facechain staking account.
There is another way that staking benefits Bob. Let’s say that Facebook, at launch, decided it wanted to reward Facechain participants who stake their Facebits. They would want to do that to incentivize keeping Facebits within the Facechain economy. Therefore, for every 10,000 Facebits staked, Facechain rewards users with an additional 10 percent in earnings from all rewards accrued. Suddenly, because of the effect of compound interest, Bob’s earnings from making fun of Mark Zuckerberg for 18 years increases every time he stakes more Facebits.
Staking benefits users, but it also benefits the blockchain and the entire cryptoeconomy.
How Staking Benefits the Blockchain Economy
Staking is not a magic pill. It’s math. Pure and simple.
You’re likely used to holding money in a bank account. At one time, bank customers could put money into a savings account and hold it for a while earning respectable interest for doing so. Those days are long gone, but staking is like a savings account.
Instead of earning interest on your staked cryptocurrency, you increase your holdings when the value of the cryptocurrency increases. In that regard, it’s more like a mutual fund than a savings account. Of course, if the value of the stocks in a mutual fund decline in value, then the mutual fund itself will decline in value. In the same way, your staked cryptocurrency will lose value if the cryptocurrency itself declines in value. To prevent that from happening, there needs to be a fair amount of the cryptocurrency in circulation. That’s a good reason to encourage blockchain users to stake their cryptocurrency. When enough users do that, the cryptocurrency maintains its value and potentially increases in value over time.
In 2019, I was a participant on a platform called Narrative, built on the NEO blockchain. Narrative platform creators didn’t understand the value of staking. They allowed users to cash out earned rewards of the platform’s native token, NRVE, right from day one and did nothing to encourage users to keep their earnings inside the Narrative economy. As a result, many users would immediately cash out their earnings. What happened was the value of NRVE steadily declined from the date of beta launch until the day Narrative shut down. It lasted about nine months, a sad testimony to bad management. Or maybe those users were smarter than me since I just held my breath and went down with the sinking ship.
A cryptoeconomy is only as strong as its currency. A currency gains strength when it is held in accounts or used for a purpose. It can be any purpose, but there must be something that people can spend that cryptocurrency on or hold it and watch its value increase as more people adopt its use.
Imagine if, suddenly, USD went out of fashion. Businesses quit accepting it as a form of payment, no one put it into savings accounts any more, no one used it to invest in stocks, and when anyone got their hands on a dollar bill they simply burned it. How long would it take before the U.S. dollar no longer held value? It’s essentially the same with any cryptocurrency. When there are a variety of ways to use the cryptocurrency, either on-platform or off-platform, and when there are enough people willing to use it or hold onto it, that cryptocurrency will hold value. In the earlier scenario featuring Bob the Facemeister, Bob was able to see his investment in Facebit grow because he and millions of other Facebook users trusted in the blockchain enough to post, make money, and stake their earnings as an investment in the blockchain’s future.
Now, let’s look at how Facebit might be more valuable with a variety of use-cases added on top of its rewards system.
How Facechain Increased the Value of Facebit
Facebook users currently have a ton of ways to interact with other Facebook users. Each user has a timeline where other users can like, share, and comment on posts. And there are Facebook groups, pages, instant messaging, Facebook ads, events, games, videos, a marketplace, Stories, fundraisers, job listings, Memories, news, movie listings, Offers, Oculus, and more.
Let’s explore a few of the ways Facebook users could use a Facebook cryptocurrency on the platform.
I’ve talked about how Bob made money posting his satirical messages of Mark Zuckerberg for 18 years. Getting into specifics, if Facebook had a cryptocurrency, users could earn that currency every time they create a post that others like, share, or comment on. Users could also earn Facebits every time another user likes, shares, or engages with comments left on others’ Facebook posts. But there are other ways users could earn or spend Facebits by interacting with Facebook posts.
Let’s start with tipping. Some platforms allow users to tip other users. With Publish0x, the tip doesn’t come from the tipper’s pocket, or wallet, as you might expect. Instead, it is generated on the blockchain by the action of tipping, and the tipper can choose how much to tip the post creator while also earning some part of that tip himself. There are any number of ways Facebook could incorporate tipping on its platform. The most obvious way would be to allow users to tip other users for any reason and at any time simply by transferring some number of their own Facebits to the other user. Each user could have a tip button on their Facebook profile. There could also be a clickable button beside the Like, Comment, and Share buttons on each Facebook post.
Facebook could also implement a way for users to boost their Facebook posts on their friends’ timelines. Such a system is similar to how page administrators can boost their page posts now. Users would be allowed to pay a small fee in Facebits to give their Facebook posts extra visibility on their friends’ timelines.
How about this? What if a Facebook user didn’t want to see a particular type of content from one of their friends? Instead of relying on some algorithm to determine that chance, Facebook could allow users to “opt out” of specific types of posts by paying a small fee in Facebit. On the flip side, users might want to see more of a particular type of content and make that known by paying a small fee in Facebit.
These measures would go a long way to giving Facebook users more say in how they experience Facebook as opposed to now where Facebook users are at the mercy of algorithms written by strangers.
Groups present another opportunity for Facebook users, and participants on Facechain, to earn cryptocurrencies and use Facebit to increase their experience on the platform.
Because Facebook groups have moderators, moderators could impose a fee to other Facebook users when joining the group. Of course, they could opt to let other users join their group for free, but if they wanted to maintain exclusivity and have more control over user behavior, they could implement a fee system. Perhaps even a tiered membership system where users can pay for increased benefits (sort of like Silver, Gold, and Platinum).
Another way moderators could control behavior of group members is to charge a fee for posts. Maybe a moderator would allow most content to be published in the group for free, but posts promoting off-platform content or a product would require a fee. Or, a moderator option could be to take a percentage of any sale of a digital product that took place within the group.
Moderators could also have the power to impose fines for bad behavior. If a user gets out of line and violates one of the group rules, an automatic withdrawal from the user’s Facechain wallet would decrease that violator’s Facebits by a predetermined amount. That would be something that users would have to agree to before joining the group. Enforcement would be automatic based on the agreement.
With these measures in place, group moderators could earn Facebits simply by being good moderators. Of course, a percentage of earnings would also go to Facebook, but a system based on incentivized behavior would give Facebook moderators more power and control over user behavior within their groups.
Facebook Pages
Just like Facebook posts, users could like, share, and comment on posts published to pages. However, whoever owns those pages (and it could be a business with a separate account from the page administrator) would earn rewards from the posts on those pages. Administrators could earn a portion of the earnings from page content so that the owner of the page could “hire” another Facebook user to administer the page, enforce page rules, and post content on behalf of the owner. This could give pages more of a publication feel.
Just like now, page owners could boost posts to give them wider distribution. However, instead of relegating those boosts to people already subscribed to the page, the owner could boost their content based on how much they’re willing to pay in Facebits.
Page owners could also contract with other Facebook users to post content to the page, maybe even paying for such content with Facebits.
A variation of that publishing initiative would be to charge Facebook users for posting “sponsored content” on a Facebook page. The page owner and administrator would be responsible for establishing content guidelines if they don’t violate the platform guidelines. Just like before, Facebook could extract a small percentage of the sponsored content fee for the privilege while the page owner and administrator split the rest.
This type of arrangement would be useful in another way. Instead of Facebook censoring content it doesn’t like, page owners and administrators would serve as gatekeepers.
Instant Messaging
Instant messaging is a great tool of the Facebook platform. What if users could require other users to pay a small fee in Facebits for the privilege of contacting them by Messenger. This would put more control into the hands of users and cut down on messaging spam. Of course, Facebook could extract a small percentage of the user-imposed fee for that privilege, but it would put control of the private messaging inbox into the hands of Facebook users.
Even better, if users wanted to make business deals through instant messaging, they could sign contracts and pay for products and services with Facebits right in Facebook Messenger. The seller could send an invoice wallet to wallet with a public wallet key while the buyer could simply send the necessary amount of Facebits to that public key from their own wallet. The transaction would be instant, or nearly instant. Bitcoin’s transaction rate is 10 minutes. Some blockchains process transactions in seconds.
Facebook Ads
Facebook users can already buy Facebook ads using U.S. dollars or any fiat currency in their own countries. What if they could pay for those ads using Facebits instead?
There would be a distinct advantage in being able to do so. A Facebook user, like Bob, who had earned a fair amount of Facebits through years of posting content, staking, selling products, and earning Facebits in various ways could use those Facebits to pay for advertising. This would effectively not cost users anything if they never invested in Facebits. If their only owned Facebits were rewards based on Facechain activities, then they effectively paid for that advertising with their time and resources on the blockchain.
Another way Facebook users could use Facebits is to opt out of advertising altogether. The Brave Browser’s unique proposition is to block ads that other Web browsers such as Chrome and Firefox would show by default. However, users can allow ads and earn Basic Attention Tokens by viewing the ads. This feature can be turned on and off at will. Facebook users could similarly block or view ads at will by paying Facebits to block ads or, alternatively, Facebook could incentivize users to view advertising by sharing a part of the proceeds to users who opt to view advertising.
For instance, let’s say Bob decided to put all of his satirical Facebook posts about Mark Zuckerberg into a book and titled it Zuck’s Face, Year By Year. He sells the book on Facebook and advertises his Facebook page dedicated to the book using the Facebits he has earned and staked over the years. In one month, he spends 2,000 Facebits. Facebook’s policy could be to share 60 percent of that ad money with ad viewers while keeping the rest to itself.
There are other ways users could earn Facebits with Facebook advertising. What if users could allow advertising on their timelines and earn some percentage of the ad revenue for doing so? Page owners and group moderators could do the same thing.
If Facebook charged a small fee in Facebits to allow users to post their events, other users could earn some portion of that fee by allowing events to appear on their timelines, on their pages, and in their groups. Event posters could pay an additional fee to boost their events and promote their events on a broader scale.
Games
Games present another opportunity for Facebook users to earn Facebits simply by having fun on the platform.
Facebook has thousands of games. From action games to word games, users spend a lot of time on Facebook playing around. What if they could earn rewards for the amount of time they spend playing games? Game developers could earn cryptocurrency for the time their users engage in game playing while the players themselves earn for competing. Since it all would take place on Facechain, the games themselves would generate the cryptocurrency as game players enjoy themselves.
Users could also use Facebits inside of games. In October 2020, Facebook’s most popular game was Texas Holdem.26 In this game, users play poker for digital chips. It’s not real money. That would be gambling, which is illegal in many states. However, if users could play for chips and earn Facebits based on the number of games won, number of tournaments won, and other in-game achievements, it wouldn’t technically be gambling. It would be prize money for winning a contest. The cryptocurrencies would still count as rewards if users aren’t using the Facebits to place bets.
Other games could reward Facebook users similarly. In Hay Day, for instance, users spend in-game currency to buy and sell agricultural products such as corn, soybean, and wheat. They can also make byproducts such as pies and baked goods and sell them. When they reach certain levels, they receive new perks such as additional livestock and lawn ornaments. What if they earned Facebits instead and then used those Facebits to buy their in-game perks? And what if they earned Facebits when they baked pies and baked goods and sold them in the Hay Day market? Not only would game players earn additional rewards for playing the game, but the game maker would earn Facebits for in-game transactions, as would Facebook itself.
The possibilities for players, game makers, and Facebook to earn cryptocurrencies that can be converted to fiat currency are endless.
Facebook Marketplace
Facebook Marketplace is a popular place on Facebook. Platform users can list virtually anything legal and sell to other users. Users sell tools, books, clothing, automobiles, real estate, electronics, furniture, household items, and a host of other items through the marketplace.
Most listings are simply Craigslist-style listings where users post a description and images of the item for sale. Interested buyers then message the seller and they set up a time and location for a real-world transaction. In some cases, buyers can click a Buy Now button and the seller will mail the item to the buyer. This transaction could easily be conducted using Facechain’s native cryptocurrency Facebit. Users could opt to use real-world currency instead, but if you’ve earned thousands of Facebits by playing around on Facebook for almost 20 years, you might want to use your hard-earned cryptocurrency.
Each Transaction Increases Facebit’s Value
There are many more ways users could earn, spend, and use Facebits on this fictional Facebook platform. From Stories to news and from Offers to Oculus, each interaction every user on the platform has with another user is potential for both users to benefit by earning Facebits. And it’s also an opportunity for Facebook to earn from the transaction. Other participants of the blockchain could benefit too. As pointed out earlier, transaction validators would earn a piece of each Facebit created by blockchain transactions.
The more of these use cases that are realized leads to increased value for the token. That’s the beauty of any cryptoeconomy. For a cryptocurrency to have value, there must be enough people who want to own it and use it.
A Facebook with a strong cryptocurrency could be a social media juggernaut in a way more powerful than the current Facebook giant is. As you know, Facebook is the largest social media platform on the planet, and Mark Zuckerberg is one of the richest people on the planet. Had the platform launched with a cryptocurrency, it’s possible that Zuck would be the richest person on the planet and Facebook could be more valuable than Amazon.
Of course, for every upside there’s a downside. Much of the criticism that is often hurled at Facebook might go away with a strong cryptoeconomy that incentivizes user behavior. On the other hand, it would also give rise to other criticisms.
Could Bob Make a Full-Time Income Without Staking?
You might be wondering what would happen if Bob did not stake any Facebits and relied entirely upon posting to Facebook for his income. Could he make a living?
I suggest that he could.
There would have been several ways to increase his income. One obvious way would be to increase his productivity. Instead of posting 50 times a day, he could double his income by posting 100 times a day. If he wanted to make more, he could post 200 times a day. The downside to this is Bob only has so many hours a day he can post to Facebook. Eventually, he’s going to top out on the number of hours he can spend posting.
Let’s say it takes Bob 5 minutes to create a post. That’s a rate of 12 posts per hour. In an eight-hour day, Bob’s top capacity is posting 96 posts to Facebook. But he goes a little longer and posts 100. Right away, he doubles his earnings. In 2021, his expected income rises to $1,149.75.
Suppose he paid for advertising and boosting his posts such that for every $1 he spent he earned $1.20 in additional rewards from user engagement. If he spent a total of $5,000 for the year in post boosting and advertising, he would have earned an additional $1,000 in income from his posts. Now he’s earned $2,149.75 in 2021.
That’s not a livable income. But Bob’s an enterprising guy, so he started a Facebook Group called Satire and invited other users. Over time, let’s say his group grew to 10,000 members and Bob was able to earn a daily income of .002 cents per member. That’s $20 a day, or an annual increase of $7,300.
Bob starts a page and calls it Making Fun of Mark Zuckerberg. He then attracts several other posters to publish satirical posts of Mark Zuckerberg on his page throughout the day. He also hires a moderator to help him approve the posts. Let’s say he earns 25 percent of his own personal income from posts for each of those other posters, after expenses. That’s an additional $2,687.1875 in Facebook income for Bob. Now, his annual Facebook income is $12,136.9375.
In his downtime, let’s say Bob likes to play Texas Hold’em. Each night, after work, he spends one hour playing the game with his friends. Since he’s a good player, he can manage to earn an average of $12 per night, but he doesn’t play on weekends. In 260 days, he wins $3,120 in prize money for playing Texas Hold’em.
Since he’s pretty good at making money from his Facechain activity, Bob decides to host one event per month teaching other Facebook participants how to increase their income on the platform. He charges participants 15 Facebits to join the event and attracts 12 eager students each month. That puts another $1,890 in his pocket every month. A total of $22,680 in one year. His total income in 2021 just became $37,936.9375.
As a block validator, let’s say Bob earns an additional $15,000, below average for block validators. That’s a total yearly income of $52,936.9375.
These are modest numbers, but I hope you can see the potential that cryptosocial media has for earning participants a steady income if they have a creative skill and some business savvy.
Summary
While this scenario was simply fantasy, the principles of earning cryptocurrency from posting content and interacting with social media friends in the same ways Facebook users do today is already happening on some social media platforms. I can’t guarantee that every cryptosocial media user will earn an income, nor can any of the platforms, any more than any government can guarantee a business owner will earn an income just for launching a business. Like launching a business, opening a cryptosocial media account is an opportunity.
How much income potential each social media participant has depends on several factors including, but not limited to, how often that user posts, how well they are at eliciting engagement on their content, how savvy they are at marketing and building their brand, how persistent and patient they are in obtaining results, and what they do with their earnings once they have them.
This exercise in showing you how Bob the Facemeister was able to parlay a cryptocurrency income from posting to Facebook’s fictitious blockchain is merely an exercise meant to illustrate cryptosocial’s potential. While I believe it’s realistic in its expectations, I also believe some cryptosocial users would do much better than Bob.
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6 Y. Sheikh. 2019. “Backlash Against Facebook’s Libra As European Government Officials Call For Action,” CryptoPotato, https://cryptopotato.com/backlash-against-facebooks-libra-as-european-government-officials-call-for-action/ (accessed April 08, 2021).
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8 Ibid.
9 “Facebook Subscriber Stats as of January 31, 2020,” Internet World Stats. 2020. https://internetworldstats.com/facebook.htm (accessed April 08, 2021).
10 “TOP 10—The Weakest World Currencies in 2021,” FXSSI. 2021, https://fxssi.com/top-10-of-the-weakest-world-currencies-in-current-year (accessed April 08, 2021).
11 M. Thibodeau. 2019. “Bitcoin vs Facebook Coin—17 Key Differences,” HedgeTrade, https://hedgetrade.com/bitcoin-vs-facebook-coin-17-key-differences/ (accessed April 08, 2021).
12 “Announcing the Name Diem. Executive Leadership in Place in Preparation for Launch,” 2020. Diem.com. www.diem.com/en-us/updates/diem-association/ (accessed April 08, 2021).
13 “Vision,” 2020. Diem.com, www.diem.com/en-us/vision/ (accessed April 08, 2021).
14 A. Morse. 2021. “Facebook-Backed Novi Crypto Wallet Launches in Limited Test,” CNET. www.cnet.com/personal-finance/crypto/facebook-backed-novicrypto-wallet-launches-in-limited-test/ (accessed November 22, 2021).
15 S. Raphael. 2021. “Diem coin launch date: What you need to know,” https://currency.com/diem-coin-launch-date (accessed November 22, 2021).
16 L. Baker, J. Hamilton, and O. Kharif. 2022. “Mark Zuckerberg’s Stablecoin Ambitions Unravel With Diem Sale Talks,” Bloomberg. https://www.bloomberg.com/news/articles/2022-01-25/zuckerberg-s-stablecoin-ambitions-unravel-with-diem-sale-talks (accessed January 31, 2022).
17 “Facebook Statistics and Facts,” 2021. Market.us, https://market.us/statistics/social-media/facebook/ (accessed April 08, 2021).
18 “Facebook Reports Fourth Quarter and Full Year 2020 Results,” 2021. Face-book Investor Relations. https://investor.fb.com/investor-news/press-release-details/2021/Facebook-Reports-Fourth-Quarter-and-Full-Year-2020-Results/ default.aspx (accessed April 08, 2021).
19 “Facebook Statistics and Facts,” 2021. Market.us. https://market.us/statistics/social-media/facebook/ (accessed April 08, 2021).
20 J. Schmidt. 2019. “Would You Rather Have $1 Million or a Penny That Doubles Daily for 30 Days?” Acorns Grow, https://grow.acorns.com/compounding-interest-example/ (accessed April 08, 2021).
21 The Associated Press. 2013. “Number of Active Users at Facebook Over the Years,” Yahoo! News, https://news.yahoo.com/number-active-users-facebook-over-230449748.html (accessed April 08, 2021).
22 “XRP,” 2021. CoinmarketCap, https://coinmarketcap.com/currencies/xrp/ (accessed April 08, 2021).
23 The Associated Press. 2013. “Number of Active Users at Facebook Over the Years,” Yahoo! News, https://news.yahoo.com/number-active-users-facebook-over-230449748.html (accessed April 08, 2021).
24 Ibid.
25 Ibid.
26 “Most Popular Facebook Games as of October 2020, Based on Monthly Active Users,” Statista. 2021, www.statista.com/statistics/278933/monthly-active-users-of-the-most-popular-facebook-games/ (accessed April 08, 2021).