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Even though Facebook is a social media platform with a massive amount of users, to the point that their sign-in functionality feels like it's available on just about every website you want to register on, its popularity is definitely dwindling. While it's still a fine platform for sharing photos and chatting with old friends, people are looking at Facebook a lot more skeptically now.
Facebook, as a company, could be described as controversial at best. Their reasons for being in the news, by and large, haven't been good. Instead of hearing about Mark Zuckerberg's presumably elaborate vacations, we hear about data breeches. With privacy concerns abound, at this point, a lot of people are wondering if they really want to trust Facebook with their money.
However, despite that iffy history, there have been a lot of stories about Facebook getting involved with cryptocurrency. But is Facebook coming out with a cryptocurrency? They're working on something and it will use blockchain technology, but it's not going to be much like Bitcoin and other cryptocurrencies.
Forbes, Bloomberg, and The New York Times all agree—Facebook is coming out with a cryptocurrency.
While we haven't heard a lot in terms of official announcements from Facebook, Bloomberg shared that the company is developing a stablecoin, a type of digital currency that will keep pace with the value of the US dollar. Bloomberg got their information from a "company spokesman," but we don't have any further details on who shared this information with the news. We can presume it came from a chief executive though.
What are they going to call it? FaceCoin? Bookmoney? I don't which is sillier, so we'll just have to wait with bated breath to find out. FaceCoin seems to be the most common nickname at this point, but nothing is confirmed just yet. While we don't know all the details, we can be pretty certain it's coming, which is big news for the cryptocurrency world.
If you've been keeping up with the news, Bitcoin surged and the cryptocurrency market suddenly sprung to life this month. Miners and Bitcoin holders, rejoice! Nevertheless, while this is exciting for the digital currency market and the future of blockchain as a whole, it's still pretty uncertain how Facebook is going to impact the market once they come up with their currency.
Facebook is in a good position to make it happen—if they do it right.
Regarding Facebook's cryptocurrency, we've got to look at their history with money-related services. Right now, all we know about this cryptocurrency is that it will allow WhatsApp users to send money to each other. Facebooks owns WhatsApp and all the convenience of its messaging service. I'm willing to bet both you and me have both of those apps installed on our phones, as it certainly does sound convenient enough to be used pretty widely on a global scale.
However, in the past, we had Facebook Credits, which launched in 2011 and died off two years later. There's the Facebook Marketplace, which still exists, but let's be honest, most people check Craigslist before they even remember the Facebook Marketplace exists. Facebook Gifts was launched in 2012 and, again, was gone two years later.
If Facebook does come up with a digital currency, it seems entirely possible that, if it isn't profitable enough for them, they'll pull the plug before very long. Subsequently, it wouldn't be the most shocking thing if Facebook created a payment system and then sun-setted it after a few years if they weren't happy with the results.
Facebook has one advantage though. People always wonder what things they can buy with crypto—Facebook would make this easy. A cryptocurrency that could be transferred through WhatsApp would be convenient, presumably easy, and if it's equivalent to the US dollar, even people who don't follow crypto news constantly ought to be able to figure out how to use it. Social networks and money services teaming up definitely has strong potential in the marketplace.
The popularity of Facebook and WhatsApp put them in a good position to make this a successful endeavor.
Facebook's cryptocurrency is on a blockchain. Blockchain and Bitcoin go hand in hand, but it has the potential to be used for a lot of different businesses and services. From what we currently know, Facebook's service feels like it's going to a bit more like PayPal than anything else, if its core function is limited to sending money to family and friends.
Nevertheless, Facebook's focus seems to be remittance payments. If they made the process cheaper and faster, then there's a good chance they'll have a lot of prospective users and customers. If they keep the fees very small, they've got a decent shot at establishing themselves in the market and not just committing themselves to a repeat of Facebook Credits, which no one really cared about.
However, it's worth noting that David Marcus left his role as the president of PayPal to be the Vice President of Messaging Products at Facebook. For the most part, no one can argue too much about the efficiency of Facebook's messaging app. I mean, I'm a Facebook skeptic, but I still have it installed on my phone. To let you know a little bit more about Marcus though, he was appointed to the Coinbase Board of Directors in 2017. Subsequently, it's not too shocking that Facebook wants to walk down this road.
There are a lot of companies proving blockchain isn't dead, and Facebook might just join their ranks out there if they play their cards right. Keeping fees low will be vital to breaking into a market with a lot of competing services, even if it is very easy to use. This social networking giant undoubtedly has the resources to start a system and make an impact on the remittance market.
However... would you trust Facebook with your money?
Facebook is developing something, but is it something we really want to use?
We all have those times when we need to send money to friends, family members, or colleagues. I just ordered coffee with my coworkers and Venmoed the person who submitted the order. With the WhatsApp integration we're anticipating, let's be honest, a lot of the use of the proverbial FaceCoin would be small transactions like that. Having that easily accessed in an encrypted messaging app would be pretty nice, if it was secure enough.
But putting their hands back into money after being so irresponsible with user data might not be the best plan for Facebook. We've been wondering what a Facebook blockchain token might look like, but with all the data leaks and privacy issues, I personally feel uncomfortable when I have to do something as simple as entering a company credit card to run a Facebook ad campaign.
If Facebook wants their cryptocurrency to take off, they need to make sure everything about it is the digital version of Fort Knox. The public response to this news has been intrigue, but largely lukewarm. So is Facebook coming out with a cryptocurrency or stablecoin? Will peoples' concerns deter them? We've just got to wait and see.