In early 2022, Arun Sundararajan wrote a Harvard Business Review case study about how established brands could use non-fungible tokens, also known as NFTs, just before the cryptocurrency market crashed. In the article, Professor Harold Price of Entrepreneurship at New York University's Stern School of Business tried to make sense of the then-cryptocurrency craze, mentioning that technology companies like Twitter and Facebook (now X and Meta, respectively) ) were allowing greater user customization. through NFT avatars.
This is an excerpt from The Node newsletter, a daily digest of the biggest crypto news on CoinDesk and beyond. You can subscribe to get the full one. newsletter here.
"If designed correctly, NFTs could take advantage of the expansion of conspicuous consumption generated by social media, allowing us to showcase our non-digital lives in our digital spaces more broadly and authentically," Sundararajan wrote, arguing that NFTs were "becoming common in 2022." .”
Little did Sundararajan know that in just a few weeks, the entire crypto market would crash and NFTs would crash. Meta would soon discontinue NFT functionality on its Instagram and Facebook apps, to refocus on “areas where we can drive impact at scale” during its “year of efficiency”, after the company's pivot into the metaverse hit a wall.
This was not the first time Facebook's crypto plans were thwarted. In fact, there could be an entire issue of HBR on the dangers of established corporations experimenting with cryptocurrencies based on Facebook's failed blockchain efforts. His Libra stablecoin plan, devised in 2019, envisioned a radical alternative global currency before it was violated by regulators. The company then pulled the plug on Diem, a significantly scaled-down stablecoin effort, after investing a significant amount of resources into developing a new blockchain, wallet, and programming language.
If there is any company that is likely to stay away from blockchain, even as the market appears to recover, it is probably Meta. This is not to say that Meta, which is as opportunistic as any corporation, will always stay away. But it's hard to imagine much progress in cryptocurrency adoption these days. Especially considering Mark Zuckerberg recently announced is directing the vast resources of the largest social networks toward the development of artificial general intelligence (AGI).
See also: Diem: A dream deferred? | Opinion
For all this, it is strange to hear that Congress is questioning Meta about its crypto activities. In a letter to the CEO of Meta Mark Zuckerberg and COO Javier Olivan, Rep. Maxine Waters (D-Calif.) expressed concerns about a pair of blockchain-related trademarks the company filed. Stranger still, the trademark applications are from 2022. So why did Waters, who led the resistance to Libra/Diem in 2019, send the letter now?
Waters, a ranking member of the powerful Democratic House Financial Services Committee, believes the trademarks represent Meta's “continued intent” to expand its role in the digital asset market. This would contradict statements Meta representatives made during a committee meeting last October that there is “no ongoing work on digital assets” at the company.
It's as if any amount of cryptocurrency-related R&D at Meta is a matter of national interest.
According to Waters, Meta will soon have to respond to the US Patent and Trademark Office, which sent the company five Notice of Allowance (NOA) documents indicating that Meta's five blockchain brands meet registration requirements. , answering if you intend to use the brands. The company has until February 15 to respond to the first of the five NOAs it received, so the timing of Water's questions seems fair. He basically wants to know in advance how Meta will respond.
And yet, the letter also has a broader scope: it asks if Meta has any plans regarding cryptocurrencies. Waters specifically asked if Meta has any future plans or partnerships with stablecoins, is "planning to launch a payments platform," and if "Meta's technology is enabling the creation, mining, storage, transmission, or settlement of cryptocurrencies." It's as if any amount of cryptocurrency-related R&D at Meta is a matter of national interest.
The extensive research could be justified given the broad nature of Meta's applications, which include ideas for hardware and digital asset wallets, chain validation technology, "blockchain as a service" advertising, and even apparently a dating app with "a specific branch adapted to investors". "
See also: Reflecting on Facebook's Hilarious and Deserved Crypto Failure | Opinion
But having a trademark or approved patent doesn't mean a company will actually put it to work. There are many requests that are presented as a defensive maneuver or even simply to create the illusion of progress. In an industry like cryptocurrency, which was born out of the broader open source community, projects that put an emphasis on intellectual property are often the least interesting.
Waters, being one of the first lawmakers to speak out against Libra and knowing the power regulators can wield, must recognize that these trademarks are not really an indication of activity. If he was worried about Meta getting involved in crypto again, it would be much more telling if the company had filed any applications after 2022. But a cursory glance shows that he hasn't.
There is a Straussian reading of Waters' letter that does not raise questions about Meta's crypto activity, but rather makes a statement to Meta and beyond. Big tech companies may not be fully on board with cryptocurrencies again, amid an upward market cycle. But even if it were, it is being watched.
CORRECTION (JANUARY 23, 2024): Clarifies that Meta must respond to trademark applications, not patents. Also corrects the name of the Democratic House Financial Services Committee.
