Facebook Inc. (FB) - Get Facebook, Inc. Class A Report is sending top executives from its platforms to work on a new blockchain team, which some experts say is a sign the social network is getting serious about bringing the technology to Facebook.
Well-known for being the technology behind cryptocurrencies, blockchain creates a transparent ledger that can be used in financial services as well as data security. While blockchain would not be a "cure-all" for Facebook's security issues, it would be useful for authenticating the identities of users and controlling access to information, said Peter Tran, vice president and head of global cyber defense and security strategy at Worldpay.
Facebook has previously emphasized its ventures in artificial intelligence and machine learning to make the platform more secure and to weed out fake news and inappropriate content, and Tran said that blockchain would work well "in conjunction with AI and machine learning to monitor data."
David Marcus, a former president of PayPal who has run Messenger since 2014, has been reassigned to the team, along with Instagram vice president of product David Weil. In December 2017, Marcus also joined the board of directors of Coinbase, a cryptocurrency exchange platform.
"David Marcus is the right person to run the blockchain exploration team at Facebook given the first step logical step is integration of blockchain into Messenger," Loup Ventures managing partner Gene Munster said. In addition to allowing Facebook users to instant message each other, Messenger now allows users to send payments as well, similar to Venmo.
Though they are leaving prestigious positions, Munster said the move is hardly a downward shift.
"This project is an upgrade for Marcus and Weil, given the opportunity to set the direction around the world's undeniable migration to the blockchain," Munster said.
Facebook CEO Mark Zuckerberg has voiced his interest in cryptocurrencies and encryption before in a January Facebook post.
"I'm interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services," Zuckerberg wrote.
D.A. Davidson analyst Tom Forte said Marcus' move to the new team is "an indication that Facebook is taking blockchain very seriously."
"Facebook is reasonably nimble for a company of their size, and they're willing to make adjustments as they see needed," Forte said.
Facebook shares were up 2.1% to $182.64 Wednesday. Since the beginning of the year, the stock has increased 3.4%.