The New York Times recently reported that Facebook is talking to cryptocurrency exchanges about the possibility of listing its own cryptocurrency. The news that one of the largest companies in the world is looking into this possibility is huge, but at the same time, it has been met with an underwhelming reaction from the cryptocurrency community. Let’s look at how ‘Facebook Coin’ could work and what it means.
Facebook is the kind of company that cryptocurrency enthusiasts are not fond of. The mass collection of data from its users, the details of which is often hidden in the trough of terms and conditions, provides plenty of ammunition for Facebook’s detractors. The centralised nature of the company is a risk for the user if Facebook is ever hacked or if it chooses to sell on your data.
The rumours suggest that the Facebook Coin will be used on its WhatsApp service and could well be a stablecoin. Users will be able to send each other money much in the same way as with PayPal. Much like the recent JPM Coin announcement, it remains to be seen whether this will technically be a cryptocurrency at all, or some kind of variation. Facebook has been hiring blockchain developers at an increased rate over the past six months, so the recent update hasn’t shocked the industry.
How the Facebook Coin is going to work has yet to be officially announced, so this is still speculation. If you are searching for positives, then the main one to pin your hopes on is the idea that Facebook’s two billion-plus customer base will be exposed to cryptocurrencies. The dark side of this notion is that they will essentially be purchasing a cryptocurrency from one of the largest corporations in the world, an idea that goes against the original Bitcoin philosophy.
Many have called this announcement a “game changer”. Such talk is too early. Facebook Coin will not necessarily be a competitor of Bitcoin in that they will be attempting to go after two different markets. Decentralisation is the key difference here. Facebook’s new coin would be akin to XRP, a centralised digital protocol that can be controlled. Ultimately, no one controls Bitcoin.
If the coin does indeed come to fruition, it will most definitely cause a stir. Whilst many Bitcoiners will be agitated by the announcement, the move could end up playing into Bitcoin’s hands by increasing knowledge and adoption in the cryptocurrency space.