First it was China.
Then South Korea.
Facebook — while not a country — is the latest in a long line of states and institutions attempting to control the bitcoin market.
It began in September last year when whispers spread that China was planning to ban initial coin offerings. People were waiting almost a week for Chinese authorities to confirm the news.
Then there was the January dummy spit over what the South Korean government proposed to do with bitcoin. The bitcoin price was pummelled by the market on suspicions that South Korea would ban all crypto trading in the country.
However, the reality is different. The South Korean government wants the crypto accounts to have the same name as people’s banking accounts.
Regardless, it’s an attempt at overt control. And now Facebook is joining in on the crackdown.
On Sunday, Facebook announced that it would ban all forms of cryptocurrency advertising. It has taken this stance because it believes there are many companies not acting in ‘good faith’:
‘We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception. That said, there are many companies who are advertising binary options, ICOs and crypto-currencies that are not currently operating in good faith.’
I find it near impossible to believe Facebook gives two rats about scams and deceptions not operating in good faith.
Take an unnamed but well-known retailer based in China. If you view the complaints about this particular company, every second comment is negative. Orders never arrive, money is rarely refunded, and the product is rarely fit for purpose.
Yet, despite this, Facebook has no problem letting this company continue to advertise on its platform.
This crypto advertising ban from Facebook is all about headlines
It has nothing to do with protecting you.
First, if you are getting all your information about cryptocurrencies from a Facebook ad, you’re only setting yourself up for trouble.
Any time you’re handing over hard-earned money, you should double-check what you’re spending the cash on. Especially when a quick lurk on the net could tell you if you’re about to fall victim to a scam.
However, in Facebook’s case, the move has nothing to do with helping people. It has everything to do with protecting its product.
You see, when a company gives a free product to people, you need to know that the people are the product. Facebook may provide you with a ‘social networking’ platform at no cost to you. But the result is that the 1.37 billion people who use the platform globally are the product.
And this is the product investors care about. If Facebook’s numbers suddenly start dropping, investors will worry that the company won’t be as profitable — and rightly so, as it would likely result in falling advertising revenues. This in turn could lead to a fall in Facebook’s share price.
I have no doubt that there have been a few crypto scams. But let’s remember that, at best, only 2.5 million people own bitcoin. Unfortunately, there are no statistics readily available on how many people own cryptocurrencies. But it’s safe to assume it would be a similar figure to bitcoin’s number.
To put this in perspective, 2.5 million people is about 0.75% of the US population.
The point is, the number of people that own cryptocurrencies is statistically irrelevant. Yet Facebook is taking steps to inform the public that it will ban all crypto ads to protect people?
This move from Facebook is a farce. Something we normally see from governments. It’s the ‘the world is a scary place so let me make these decisions for you’ type of protection.
Facebook isn’t taking steps to protect you. Especially since bitcoin and cryptos are a fringe concept. Not enough people use it — or have fallen for scams — to warrant a blanket ban on advertising.
This tells you that Facebook is making this move solely to appease investors…and any new investors it brings on board.
In any case, Facebook may want to remind itself that, despite its widespread adoption, it isn’t and shouldn’t be acting like a government.
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