Face­book Coin: Endgame or Re­birth

Distinguished Magazine - - CONTENT - KOEL CHATTERJEE

Does this new de­vel­op­ment sig­nify the big­gest boon to the un­sta­ble crypto com­mu­nity, or does it im­ply an im­pend­ing doom? In the sec­ond half of 2018, ru­mors arose of a cryp­tocur­rency Face­book was plan­ning to launch in 2019, called the Face­book Coin. This came as a huge shock to the cryp­tocur­rency en­thu­si­asts. Face­book, not long ago had ve­he­mently op­posed the con­cept of cryp­tocur­rency, and in Jan­uary 2018 im­posed a ban on the promotion of dig­i­tal cur­ren­cies on its var­i­ous on­line plat­forms. Al­though there was al­ready a buzz about Mark Zucker­berg’s cryp­tocur­rency plans since the com­mence­ment of Face­book’s Blockchain and Crypto team in May 2018, the an­nounce­ment di­vided the crypto world into two seg­ments. Does this new de­vel­op­ment sig­nify the big­gest boon to the un­sta­ble crypto com­mu­nity, or does it im­ply an im­pend­ing doom?

Till date, there have been no con­firmed de­tails about the Face­book Coin. What peo­ple do know from the re­ports pub­lished in var­i­ous big news out­lets, is that the Face­book Coin is deemed to be a Sta­ble Coin. This means that the dig­i­tal cur­rency will have a fixed value at­tached to it, and the money that is poured into the cir­cu­la­tion will keep chang­ing, in­stead of hav­ing a fixed amount of cur­rency in cir­cu­la­tion that changes in value. Be­ing a Sta­ble Coin which is ex­pected to be used all over the world,

Face­book Coin will be teth­ered to the US dol­lar and a mul­ti­ple of other cur­ren­cies. If this ac­tu­ally hap­pens, then Face­book is deemed to be the largest bank in the world with a mem­ber count of 2.7bil­lion users. Ac­cord­ing to th­ese re­ports, Face­book Coin will be launched on all the so­cial me­dia plat­forms and mes­sag­ing apps that the com­pany owns, like Mes­sen­ger, In­sta­gram and What­sapp. Face­book is as­sumedly aim­ing to raise a fund­ing of 1 bil­lion dol­lars for its crypto project, as a ven­ture cap­i­tal in­vest­ment.

While this un­ex­pected move by one of the largest cor­po­ra­tions in the world is seen as the need of the hour by most of the cryp­tocur­rency stake­hold­ers, some mem­bers of the crypto com­mu­nity are view­ing Face­book Coin as a risk of be­com­ing an im­pend­ing doom on a de­cen­tral­ized cur­rency world. In the fun­da­men­tally open sys­tem with­out any need for per­mis­sions, it is quite un­be­liev­able for a so­cial me­dia gi­ant like Face­book to make their foray into blockchain tech­nol­ogy. The ab­sence of cen­tral con­trol or author­ity is an im­por­tant hall­mark of cryp­tocur­rency and blockchain tech­nol­ogy, and Face­book Coin threat­ens the in­tegrity of this ba­sic prin­ci­ple.

While this un­ex­pected move by one of the largest cor­po­ra­tions in the world is seen as the need of the hour by most of the cryp­tocur­rency stake­hold­ers, some mem­bers of the crypto com­mu­nity are view­ing Face­book Coin as a risk of be­com­ing an im­pend­ing doom on a de­cen­tral­ized cur­rency world. In the fun­da­men­tally open sys­tem with­out any need for per­mis­sions, it is quite un­be­liev­able for a so­cial me­dia gi­ant like Face­book to make their foray into blockchain tech­nol­ogy. The ab­sence of cen­tral con­trol or author­ity is an im­por­tant hall­mark of cryp­tocur­rency and blockchain tech­nol­ogy, and Face­book Coin threat­ens the in­tegrity of this ba­sic prin­ci­ple. Face­book Coin also poses a large threat to the cash­less gi­ants of the fi­nance in­dus­try, Master­Card and Visa. Be­ing a sta­ble coin Face­book coin will not get af­fected by the volatil­ity of the world of cryp­tocur­rency, which sig­ni­fies that it will be safer than car­ry­ing a card around in­stead of cash, if Face­book also de­cides to in­tro­duce a mo­bile dig­i­tal wal­let along with the dig­i­tal cur­rency. If this hap­pens in re­al­ity, this dig­i­tal cur­rency has the po­ten­tial of be­com­ing the most widely used cur­rency in the world.

Face­book has 2.7 bil­lion users at the mo­ment, com­bin­ing all the plat­forms it has in its con­trol. This cur­rency re­port­edly will be trans­fer­able via What­sApp in its early days, but with fu­ture suc­cess it will prob­a­bly be in­te­grated into In­sta­gram and Mes­sen­ger. With in­di­vid­ual sign-ins and eas­ily trans­fer­able cash, Face­book might be the most pow­er­ful cen­tral bank, even if half of its users start us­ing its cur­rency.

How­ever, all said and done, it can­not be ar­gued that Face­book Coin is best pos­si­ble prospect avail­able for the cryp­tocur­rency world to stay afloat at this mo­ment. Ac­cord­ing to Ross San­dler from Bar­clays this cryp­tocur­rency, which will re­port­edly be launched by the first half of 2019, has the po­ten­tial of yield­ing rev­enue of $3bil­lion to $19bil­lion by the year of 2021. As it will be a Sta­ble Coin, its amount will not dis­turb the cryp­tocur­rency world much, but is more likely to be pegged op­po­site the tra­di­tional cur­ren­cies that are in bank ac­counts. It has been re­ported that Face­book has al­ready ap­proached a num­ber of cryp­tocur­rency ex­changes to list its coin.

So peo­ple who have ac­counts on the Face­book plat­forms can ex­change their Face­book Coins or sell them at cryp­tocur­rency ex­changes, even with­out hav­ing any bank ac­counts. Also, a huge amount of in­vest­ment will be in­jected in the cur­rent crypto mar­ket. This might be a huge step for­ward for the Cryp­tocur­rency world, which hope­fully will bring in prof­its and sta­bil­ity in this de­clin­ing mar­ket.

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