Facebook Cryptocurrency Insight: Will a Native Social Media Token “FaceCoin” Have Any Value?
Will Facebook’s Potential Virtual Currency Launch Have Any Real-World Uses or Value for Social Network Users?
In a recent article released by Wired, they ask the question of which is the value that a Facebook cryptocurrency would have in the market. During the last few months, there were several reports related to Facebook launching its own digital asset to the market.
Although the reports were not confirmed by the company, the intention could be to launch a stablecoin that would target the remittance market in India to send transactions through the messaging app WhatsApp.
A few days ago, The New York Times released some details related to Facebook and the stablecoin that it could be working on. Apparently, the coin would be backed by a basket of global currencies for it to remain stable. Moreover, the blockchain team of the company has reached 50 individuals and it keeps growing as time passes.
WhatsApp is a very important application for Facebook because it handles more than $1.5 billion users around the world. That means that if Facebook releases a cryptocurrency to the market, it would be working in a similar way as Venmo or WeChat Pay. However, these companies use their local currency to send and receive funds, Venmo in dollars and WeChat Pay in Yuan. Facebook, instead, could use different currencies around the world to send funds across borders in a very easy way.
There are other virtual currencies in the market. Perhaps the most known is Bitcoin (BTC) that has a market capitalization of $67 billion. Bitcoin users can simply send and receive payments in a relatively fast way and for very low fees. One of the main critics that users make to Bitcoin is that transactions can be seen on the blockchain without preserving users’ privacy.
Using Facebook’s cryptocurrency would not necessarily mean that users will have privacy. Indeed, there might be several KYC and AML policies that the company would have to be compliant with if it wants to operate in different markets. India has been very reluctant to allow Bitcoin and other cryptocurrencies to expand in its territory, thus, Facebook’s plans to launch a digital asset in this Asian country might not be the best.
Another possibility for the Facebook coin is to start as a centralized asset and then start o loosen its grip as the market becomes more and more decentralized .
Sirer, the founder of Ava Labs, a company that works on scaling solutions commented:
“We would expect them to test the waters, and not satisfy the purists. The question is will there be a catch. Will they embrace the potential of cryptocurrencies, or will they turn it into a walled garden? I honestly don’t think Facebook knows yet.”
It seems that Facebook is simply trying to explore many different applications by leveraging blockchain technology. The team that the company set up is currently exploring different apps and how to implement distributed ledger technology. There are other applications such as Telegram and Signal that are also testing blockchain implementations. One of the examples is related to Telegram’s TON (Telegram Open Network) and its digital currency.
The CEO of Twitter has also been supporting Bitcoin and how the Lightning Network (LN) works. He has also participated from the Lightning Torch initiative and has supported the Tippin.me extension for Firefox and Google Chrome. The Lightning Network aims at solving Bitcoin’s scalability issues.
Facebook will now have to precent the virtual currency they could be working on and unveil what they have been developing with blockchain technology.