Historically the depths of your favourite Altcoins relationship to Facebook was simply that it was a platform where it was discussed, promoted, then banned, but still discussed, and now promoted again.
Now that Facebook have announced ‘Global Coin’ as they are looking to enter the multi-trillion dollar industry of global payments.
What is the difference of this project (codenamed Libra) to the multitude of digital currencies – stable or decentralised – you ask? It is an absolute game changer.
Facebook have been moving quietly in the shadows of the digital asset space for the last couple of years. In May 2018, Facebook formed a Cryptocurrency team – with David Marcus, formally the president of PayPal, leaving the board of Coinbase after previously being involved with the Messenger platform at Facebook. Over the last couple of weeks it became public knowledge that compliance specialists from the San Francisco based fiat on-ramp left Coinbase to join the Facebook project in Switzerland.
Within the industry, there is a lot of noise made about EOS raising $4 Billion from a Crowdsale, and what they could possibly do with such a substantial war chest- however this pales in comparison to the cash holdings of Facebook, estimated to be around $44 Billion in reserves.
The real news item here is the number of users the facebook platform has – at 2.38 Billion daily active users, this is almost a third of the entire world’s population. This is also double the amount of Apple users – who also have their eyes on the payments space
Like Apple – Facebook are looking to create their own payments and cash ecosystem, in which they can encourage users to utilise ‘Facecoin’ or ‘Zuckbucks’ and make savings on the merchant fees that exist today, of around 2.5%- 3%. By operating as the payment provider and the merchant, this enables the closed loop and those savings will be passed on to the 65 million businesses that currently have Facebook pages.
Another key component of the project is that Facebook is already a publicly traded, SEC compliant, multi-national corporation. This creates an automatic advantage over ICO’s and other altcoins looking to enter the digital payments space. The Utility of the token is already defined by the SEC guidelines as ‘being targeted to expected users of the goods or services who have a need for the functionality of the network’
The most important element of success is the network effect created by users. At this juncture, no one really knows if Facebook will create a wallet that will allow for other digital assets to be exchange on the platform. The currency is expected to be pegged to a basket of currencies (USD, YEN, GBP) and this in itself might present a tremendous opportunity for Bitcoin to act as the reserve currency down the line.
As for the other 2201 digital assets currently listed on Coinmarketcap.com, decentralisation has always been the allure for users of these projects, but unless your favourite altcoin has a really large community that can demonstrate the benefits of token velocity, now would be a good time to cut your bags.
From a consumer point of view, Project Libra is a great thing. It removes opacity from the current international payments system, where fees can be as high as 7%. With the number of users of Facebook, as well as the 6 Million plus advertisers, adoption of digital payments is closers than we could have imagined in 2017. Facebook now have the opportunity to act as a King maker – deciding on which (if any) current projects and exchanges they will integrate with.
Nakameowdough has only known about Crypto since late 2017. As soon as he heard about it from a trusted source, he spent the next 14 months with his head buried in books on the subject or listening to a multitude of podcasts.
This dedicated self-development allowed him to pivot from a career in I.T. towards FinTech and he now works with one of the most exciting companies in London, the FinTech hub of the world.
His position within that company affords him the benefit of working with highly innovative businesses and facing the challenges of integrating exciting solutions, with old systems.You can reach Nakameowdough on Twitter
For more articles like this one on Facebook Libra and also some commentary on the FinTech sector, check out more from Nakameowdough here.
The Daily Chain – Inform. Educate. Succeed.