Andreas Antonopoulos believes banks are about to ‘lose a whole generation of customers’

Andreas Antonopoulos doesn’t have much hope for the decentralisation claims of the upcoming Facebook cryptocurrency, but he does think that it may be the first in a new wave of Silicon Valley coins set to directly compete against an established set of incumbent banking giants.

Speaking to a packed house at the recent London Coinscrum meetup, the open source advocate hypothesised that Facebook may be planning “an open network where anyone can join”, but soon the company is going to run into a couple of legal constraints.

Antonopoulos mocked the true intentions of the social media platform, saying: “If they can build a truly decentralised and permissionless coin, then I will join the board of directors.”

He exclaimed that “Facebook can’t do that” as “they’re not an open source project”. He then went on to pull apart Facebook’s current business model, saying: “They’re not today operating across different countries. They have legal jurisdiction in specific countries, and in those specific countries, there are laws about what you can and can’t do with money.”

According to Andreas, these are “laws that Bitcoin doesn’t have to deal with” because it’s an open source and decentralised project.

He said: “First they are going to have a committee inside Facebook, and they’re going to say let’s build a completely open, decentralised cryptocurrency, and the lawyers at Facebook (who outnumber everybody) are going to go whoa, we can’t allow that.

“They can’t be borderless because they have to abide by the regulations that prohibit transfers of money across borders without know your customer (KYC) and anti-money laundering (AML) checks.”

Antonopoulos believes that Facebook will have to vet every participant in the transaction and the social media giant “can’t be neutral because they can’t just transfer value from anyone to anyone for any purpose”.

‘No company can do what Bitcoin does’

Due to these factors, he summarised: “Facebook cannot build an open, decentralised cryptocurrency because they’re prevented by law – no company can do what Bitcoin does.

“So who they are really competing with and who should be terrified by this are banks. Banks are currently now squeezed between a rock and a hard place – or a Bitcoin and a Facecoin.

“On the one hand, they’ve got an open and decentralised zoo of cryptocurrencies that they can’t plan, they can’t compete, they can’t co-opt, they can’t sue, they can’t buy, and they can’t even get the government to shut it down (even though they have been trying).

“The thing that they pride themselves on the most is being progressive technology companies. If you think Facecoin is coming, so is Apple coin, Amazon coin, Twitter coin, Uber coin, and AirBnB coin, and every other Silicon Valley corporation.”

Banks will be forced to compete

Antonopoulos believes that every company is going to get into this space eventually, especially if Facebook shows it to be profitable and successful. With many banks now offering the same fundamental financial services to consumers, they are not going to stand a chance against a whole bunch of Silicon Valley tech giants who already know how to do “user experience and user interface better”.

The open blockchain advocate thinks that the best part of this “is that they [the banks] have to compete with these [Silicon Valley] giants that will actually have perfected the art of using artificial intelligence to tickle your dopamine receptors”, and now “they’re going to deliver banking to you”.

He thinks this may lead to a “horrific surveillance capitalism” where all of your payment information will be sold “to everyone, everywhere”, leading to the destruction of privacy and democracy in all developed countries.

With a tongue-in-cheek taunt to the fiat banking industry, Antonopoulos concluded: “For the banks, it’s even worse. Their profit margins are going to go down by at least 8% – and that’s serious.”