Facebook has recently created in Geneva a subsidiary company, Libra Networks, for its crypto-currency with code name Globalcoin. Being based in Switzerland, known for its neutrality, quality, security and openness to crypto-tokens, is the first advantage with regards to the trust that customers would have in a Facebook coin. Social trust is of utmost importance for its success beyond the technical trust that crypto-currencies provide. Unfortunately, Facebook brand is already at the center of a long history of mistrust events that have to be taken into account when estimating its potential to succeed as the first large-scale used crypto-currency.
To estimate the trust that people have in Facebook, I have extended my previous 2017 survey on Bitcoin trust. As in 2017, more than 2100 American adults answered an online survey in March and April 2019. To broaden the survey results, more than 2100 French adults also responded to the same study, but this time translated in French. The surveyed asked short unambiguous questions starting with “Do you trust…” to avoid any cultural bias in the notion of trust. In addition to asking “Do you trust Bitcoin?”, the GAFAM were targeted: “Do you trust Facebook?”, “Do you trust Amazon?”, “Do you trust Microsoft?” and “Do you trust Google?”. “Do you trust LinkedIn?” was asked rather than “Do you trust Apple?” because Apple hadn’t released its new crypto kit and connect functionalities at the time of doing the survey, and an instructive trust behavior is to know if someone is ready to log in to a third-party service with credentials from an initial service. Facebook has provided the Facebook Connect feature for several years, which is also the case for Google, Microsoft, Amazon, and LinkedIn. A respondent could choose among four different randomly ordered answers, for example, “Do you trust Facebook?” could be answered by the following responses:
- I trust Facebook
- I neither trust nor distrust Facebook
- I distrust Facebook
- I don’t understand the question
The following image summarizes the results of the survey.
On the one hand, we see that Amazon is the most trusted among the studied GAFAM with more than 45% of the respondents trusting Amazon and only 9% distrusting it. 35% neither trust nor distrust Amazon, and only around 10% haven’t understood the question. It isn’t surprising that people trust Amazon because lots of them have experienced reliable delivery of products through Amazon. Consistent successful delivery creates trust even if Amazon has its issues in the press: replacing humans by robots, the environmental cost of shipping, employees problematic working conditions… Daily products delivery is a significant trust advantage that the other GAFAM don’t have.
On the other hand, only around 12% of the respondents trust Facebook, and approximately 40% of them distrust Facebook. Facebook gets almost the opposite results of Amazon. Only Bitcoin is less trusted than Facebook. It is worth noting that between 2017 and 2019, trust in Bitcoin has decreased noticeably from 8% to 6% even if more people seem to understand Bitcoin given that the percentage of people who answered “I don’t understand the question” has reduced from around 30% to 20%.
Although the results of this survey indicate that Amazon is the most trusted of the surveyed GAFAM, Facebook has still the main advantage of being the only GAFAM who is releasing its coin. People have no other GAFAM coin choice. Amazon coin would undoubtedly win the social trust aspect, but it doesn’t exist. When people have no choice, they choose what is available, and Facebook coin is the only planned GAFAM coin at the time of writing. The other GAFAM should try to release their crypto-currency at the same time as Facebook, especially Amazon, which is in a leading position. Otherwise, Facebook is likely to win the GAFAM crypto-currency market in the long term because as people will experience a frictionless Facebook coin with much less hurdle and fees than with traditional banking, their trust in Facebook as a payment entity will change positively, even more, if there is no competition. I don’t mention competition outside of the GAFAM although some projects exist because the GAFAM have already hundreds of millions of users. One may refer to Tether (USDT), but its trust level is already shallow in the cryptocurrency world. Although too small, GLOBCOIN GLX is worth mentioning because I have worked on it. As Facebook, GLOBCOIN GLX is meant to be much more stable than Bitcoin thanks to linking the crypto-token to a basket of currencies. I presented such a solution in October 2017 at the International Telecommunication Union standard conference on digital currency with my co-authors Hélie d'Hautefort et Giuseppe Ballocchi. The full paper can be downloaded here: https://archive-ouverte.unige.ch/unige:97657
I am pretty interested in the success of Facebook coin as it would further foster Geneva blockchain ecosystem: being the director of the blockchain certificate of advanced studies at the University of Geneva https://www.cas-blockchain-certification.com (with a deadline to register on July 10th), researching attack-resistant decentralized trust for more than 15 years and founder of Reputaction. Reputaction provides solutions for decentralized trust, for example, for trustworthy decentralized products certifications as part of Reputaction relational value decentralized marketplace with hardened crypto-wallets. The patent-pending hardened crypto-wallets allow buyers and sellers to make KYC-AML-enforced Bitcoin/token transactions only with good guys, in real-time and even offline: they are an alternative solution to blockchain layer 2 solutions such as Bitcoin lightning networks. For more information on these Reputaction products, have a look here: https://www.reputaction.com/en/products and you can participate to the current Reputaction token contest here: https://app.reputaction.com/en/. Reputaction is currently seeking private equity investment to expand its patent beyond France and to continue its commercialization and development, as shown on the following architecture overview image.
Now that Apple is focusing on connect and crypto kits, which can also be leveraged by Reputaction patent-pending hardened crypto wallets, the next edition of this survey may include “Do you trust Apple?” as well 😉
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