Social media platforms like Facebook have banned cryptocurrency related advertising, while the brains behind the platforms believe this technology can revolutionize their products
Social media platforms have recently banned advertising for cryptocurrencies and ICOs, but that stance is contradictory to the thoughts of their directors.
In January, the social network giant Facebook outlawed cryptocurrency related advertising in an effort to protect users from various ICO scams, fraudulent token sales, Ponzi schemes and the likes.
It has set a precedent that is now being followed by other platforms and service - but this disparaging move is at odds with the sentiments of the heads of these businesses.
The people responsible for the creation of social media platforms like Facebook and Twitter have been singing praises for cryptocurrencies and their underlying Blockchain technology.
It creates a bit of a juxtaposition, as the companies they are responsible have enforced sanctions that potentially stifle the adoption and development of Blockchain.
In order to unpack this disconnect, let’s take a look at what the likes of Facebook co-founder Mark Zuckerberg and Twitter CEO Jack Dorsey think about the developing technology.
Facebook and Instagram
At the beginning of 2018, Facebook co-founder Mark Zuckerberg made some positive comments about cryptocurrencies in a post on Facebook. He focused on the potential benefits they have for businesses like Facebook, as well as the power they hand back to people.
He honed in on an issue that is becoming increasingly talked about – centralization versus decentralization. As CNBC reported, Facebook was in the spotlight for a number of negative issues mainly related to its ad-services and their capabilities.
"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. 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."
No more than two weeks later, Facebook announced that it would prohibit cryptocurrency related advertising on the platform, which was met with varying reactions from the wider cryptocurrency community.
Fast forward three months and Facebook was embroiled in one of the biggest scandals since its inception. In essence, the platform supplied personal data from over 50 bln users to political consulting firm Cambridge Analytica.
Zuckerberg took to Facebook to admit the company had made ‘mistakes’ while outlining what had led to Cambridge Analytica access to data from Facebook users. He has since taken out adverts in British newspapers to make a public apology, while Facebook has been hit with a swathe of lawsuits.
In an interview with CNN last week, Zuckerberg even suggested that Facebook could benefit from regulation - an issue that is hanging heavily over cryptocurrencies and ICOs this year:
“I’m actually not sure we shouldn’t be regulated. In general, technology is an increasingly important trend in the world and I actually think the question should be ‘what is the right regulation rather than ‘yes or no, should it be regulated.”
“On the basic side, there are things like ads transparency regulation that I would love to see. If you look at how much regulation there is around advertising on TV and in print, it's just not clear why there should be less on the internet, you should have the same level of transparency required.”
Meanwhile one of the primary attributes of Bitcoin and other cryptocurrencies is the ability to encrypt data giving anonymity and privacy to users.
Facebook’s move to ban cryptocurrency related advertising also applied to partner platforms Instagram and its advertising platform Audience Network.
Twitter CEO beams on Bitcoin
While Zuckerberg battles with Facebook’s ongoing woes, Twitter CEO Jack Dorsey has been waxing lyrical on Bitcoin of late.
In an interview with the Sunday Times issued on March 21, the Twitter and Square CEO forecast that Bitcoin could one day become the single global currency in ten years time.
“The world ultimately will have a single currency. The Internet will have a single currency. I personally believe that it will be Bitcoin, probably over ten years, but it could go faster.”
Having personally invested in Bitcoin, Dorsey is a staunch advocate for the virtual currency. He’s also the CEO of point-of-sale software startup Square, which would soon integrate a Bitcoin buy/sell functionality.
Furthermore, Dorsey also invested in Lightning Labs, which has seeded $2.5 mln to spearhead the development of the Lightning Network which promises to provide free and fast Bitcoin transactions.
While Dorsey is bullish on Bitcoin, he reiterated that startup companies like Lightning Labs hold the key to further adoption around the world:
“It’s slow and it’s costly, but as more and more people have it, those things go away. There are newer technologies that build off of Blockchain and make it more approachable.”
What is disconcerting is that Twitter is the latest social media platform to ban cryptocurrency advertising.
Murmurs of an impending ban last week were confirmed on March 27. Twitter will begin cutting out advertising of initial coin offerings and their token sales as well as global cryptocurrency wallet platforms if they are not publicly listed on select stock exchanges.
Once again, there is a clear disconnect between the thoughts and views of its leadership and the plans of the business itself.
Twitter has followed in the footsteps of Facebook. The social media platforms are trying to protect users from fraudulent companies and scams, which have taken advantage of many through advertising campaigns on social media networks.
However, that has painted everyone with the same brush. In essence, innovative startups with ingenious business plans have been stifled due to the actions of fraudsters and scam artists looking to ride the Blockchain and cryptocurrency wave.
An infamous example was John McAfee’s Twitter account being hacked and used to promote some obscure virtual currency tokens.
Furthermore, Twitter, in particular, has been rife with accounts impersonating well-known cryptocurrency advocators and accounts, which has caught unsuspecting users out.
Google to follow suit
The world’s biggest search engine, Google, is following in the footsteps of its social media cousins.
As reported in March, Google’s updated financial services policy will rule out all related cryptocurrency advertising through its AdWords service from June 2018. Once again, consumer protection is touted as the main driving factor behind the move.
There is an air of irony to Google’s move. While cryptocurrency adverts will come to an end, Google could actually be stifling the growth of companies it has invested in that directly use cryptocurrencies.
Companies like Blockchain based cloud storage Storj and payment platform Veem, which Google has backed financially, will in essence be unable to advertise on the search engine once the ban comes into effect.
The move to ban crypto advertising comes less than a year after Google’s parent company Alphabet invested in London-based online wallet Blockchain.info. It also remains to be seen how this service will be able to advertise on the search engine come June 2018.
At the time, Alphabet partner Tom Hulme said their investment in the company, which raised over $70 mln in overall funding, was essential because “the pace of innovation in the digital currency space is unmatched,” as quoted by Fortune.
And yet cryptocurrency wallet providers and promising ICOs will no longer have access to the world’s biggest search engine in two months time.
Snapchat is another massive social media platform to make a move against cryptocurrency advertising. They’ve instituted a similar ban on Facebook and Twitter, but have only prohibited adverts for initial coin offerings.
Ironically pioneering Snapchat investor, Jeremy Liew was bullish on Bitcoin and had some lofty price predictions for the preeminent cryptocurrency last year.
China has taken a hard stance against cryptocurrencies from a governmental level and that has filtered down to internet based companies in the country. In September 2017, the country ordered that all cryptocurrency exchanges must close down.
As reported by Recode, the likes of Alibaba and Tencent haven’t allowed this cryptocurrency related advertising for far longer. Meanwhile, the South China Morning Post revealed that it seems search engine Baidu is not returning adverts for any cryptocurrency related searches - only news articles and posts.
Russian search engine Yandex is also expected to follow suit - according to local media reports.
Where to from here?
This is a question that may not be answered for months. The whole world seems to be waiting for clear regulatory guidelines on cryptocurrencies and ICOs.
While the likes of the SEC pioneer this space, we may see continued apathy towards the promotion of ICOs and cryptocurrency tokens sales on most online platforms for some time.
Until there are firm guidelines in place that protect the majority of users from ICO scams and misleading investment opportunities, these extreme sanctions are likely to remain in effect.