Source: ARK Disrupt Issue 106: January 8, 2018. By @juliahARK

Happy New Year from the Fintech team! As he does every year, Mark Zuckerberg published his New Year’s resolution, this year resolving to fix Facebook’s “errors, enforcing our policies and preventing misuse of our tools.” He also wrote:

With the rise of a small number of big tech companies — and governments using technology to watch their citizens — many people now believe technology only centralizes power rather than decentralizes it.

There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people’s hands. But they come with the risk of being harder to control. 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.

We do not believe that Zuckerberg is interested in decentralizing Facebook and destroying its “valuable” role as a data aggregator, but cryptotokens could be integrated into the community and potentially become part of its capital structure. For example, a “Facebook Token” could be used to verify identity or to pay for content. While advertisers might not be thrilled to “pay for play”, users might enjoy a gamified system in which they exchange micropayments for posting and receiving content (though TwitterTWTR might be the more interesting play on that front). Facebook potentially could use the blockchain to track advertising impressions as well.

We are intrigued that a leader in the increasingly centralized internet space is focused on a technology that aims to decentralize and distribute economic power.  Facebook is unlikely to destroy its economic model by giving users control over and the right to the monetization of their own data.  That said, it could enhance its model if the gamification associated with micropayments increases user engagement, and if blockchain technology enables it to track that engagement more precisely.

View original article and other research here.


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ARK’s statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. For a list of all purchases and sales made by ARK for client accounts during the past year that could be considered by the SEC as recommendations, click here. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. For full disclosures, click here.

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Fred Pye

Frederick T. Pye

CHAIRMAN, CHIEF EXECUTIVE OFFICER & DIRECTOR

Frederick T. Pye is the Chairman, Chief Executive Officer and Director of 3iQ Corp. He is also the Chairman and Director of 3iQ Digital Holdings Inc. Mr. Pye is recognized for creating and promoting creative and unique investment products for the investment industry.

Mr. Pye has managed private client portfolios with Landry Investment Management and various other investment dealers. Prior to this Mr. Pye was Founder, President & Chief Executive Officer of Argentum Management and Research Corporation, a company dedicated to managing and distributing quantitative investment portfolios including the first long-short mutual fund in Canada.

He was also Senior Vice-President and National Sales Manager of Fidelity Investments Canada and an integral part of the team that saw assets rise from $80 million to over $7.5 billion in assets under management during his tenure. He also held various positions with Guardian Trust Company, which listed the first Gold, Silver and Platinum Certificates on the Montreal Exchange.

Mr. Pye obtained a Masters in Business Administration from Concordia University.