Facebook Goes Crypto
Posted March 11, 2019
In 2007, I was in high school and going through a myriad of changes.
Learning to shave, adjusting how to drive without an instructor present...
You know, typical American teenager stuff.
During this time, my angst-filled self also experienced a change in social media. The biggest change. Everyone I knew was abandoning their custom-template Myspace accounts and flocking to this new site called Facebook.
I thought Myspace was cooler than Facebook. I mean, where else could I use a custom Dragon Ball Z profile?
Nonetheless, I followed suit and changed over to "this new Facebook thing."
I’m glad I did. Fast-forward to March 2019, and I still have a Facebook profile, as does almost everyone I know, while Myspace is nothing but a digital relic taking up internet space.
My only regret is that I never invested in the company in its infancy.
Facebook (NASDAQ: FB) has become one of the most powerful companies in the world in a little over a decade and continues to break ceilings to make room for innovation.
Well, Facebook has decided to enter the crypto world with a Facebook Coin intended to innovate and revolutionize online payments. For years, the company has hired cryptocurrency and blockchain experts, seemingly preparing for this development for some time.
In the short period since Facebook’s crypto plans were revealed, some crypto industry members have supported the FB Coin, while others have unapologetically shunned it.
Today, I’ll delve into Facebook Coin, its reception among experts, and what I think about the coin.
What Is Facebook Coin?
The Facebook Coin (FB Coin) will be Facebook’s cryptocurrency. The company plans to roll out the FB Coin in the first half of 2019 through its messaging app, WhatsApp. It’ll presumably be available on all of Facebook’s shared messaging systems.
The FB Coin will be stored on a computer network that’s decentralized from Facebook and used on its messaging application.
Facebook states that the FB Coin will feature instant transactions. It appears the FB Coin will challenge other mobile-payment avenues, such as PayPal’s Venmo or PNC Bank’s Zelle.
While the company has many plans involving blockchain and cryptocurrency, the first thing it wanted to tackle was a stablecoin. Thus the Facebook Coin was born.
The FB Coin will be tethered to a bunch of fiat currencies, including the U.S. dollar.
Facebook isn’t just planning on having the FB Coin on WhatsApp; the company is already in talks with major exchanges to include the crypto.
It seems to me like Facebook identifies blockchain and cryptocurrency’s value and is exploring how it can benefit global communication and transaction.
There was some warm welcoming for the FB Coin from the blockchain and cryptocurrency industry.
Binance’s CEO Changpeng Zhao believes the FB Coin will further crypto’s global adoption. Actually, he thinks Facebook trying to enter the crypto space is all right, as long as the company is without harmful intentions.
Here’s his tweet on FB Coin
Unpopular opinion: JPM/FB coins.
In a decentralized world, anyone can do as they please (within limits, so long as they don’t hurt others). The more people adopt #crypto, the better.
Adoption is #adoption. Welcome!
How well will they do? Well, let’s wait and see.
But at the 2019 RSA Conference, experts talked about all things digital — cryptography included.
And the Facebook Coin was not well received.
Paul Kocher, an expert in the field, noted how Facebook has been riddled with privacy issues. Not only that, but he believes Facebook’s track record vs. what it promise to the public is imbalanced. Because of those things, he believes a cryptocurrency from the company makes no sense.
When you add the froth of blockchain into there, these just sort of things that seem crazy just keep amplifying. I think the latest one that I saw is one where you can take Bitcoin where you can lose your money, Facebook you can lose your privacy, and now there’s “Facebook Coin.” And it’s not even a joke, it’s apparently coming.
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It’s Missing Its Mark
I went axe throwing recently. I was able to hit a bull's-eye a few times. I think to hit one, it's all about preparation, aim, and execution.
This is what Facebook has to say about its coin:
With billions of users, the Facebook coin is going to roar to the top.
Honestly, I think the Facebook Coin is off the bull's-eye. For a few reasons, at that.
First, Facebook is trying to jump into something that goes against its very nature.
This is what I mean by that: Facebook wants to adopt and implement a decentralized and private form of technology and blockchain, but its business model involves amassing and selling its users’ data.
That goes against what cryptography was made for: a private, tamper-proof, and decentralized way to privately make transactions.
That won’t work with Facebook, which literally stores your information to be sold, where it is then used against you in the form of specially targeted advertisements. Also, I fear the FB Coin will lack decentralization, as Facebook would be at the top of it.
Second, this is what else Facebook has to say on its coin:
The Facebook coin promises to succeed where Bitcoin failed.
Bitcoin’s failed? Where?
Don’t get me wrong; BTC isn’t $20K apiece like it was over a year ago, but it's certainly not a dead token. BTC’s ledger is encrypted and secure, not allowing for any security breaches.
I can’t say the same for Facebook. Just late last year, Facebook experienced a data breach where MILLIONS of user information was leaked.
So perhaps Facebook should learn from BTC so that it doesn’t fail where BTC succeeds: privacy and security.
I believe the Facebook Coin may flop. It’s too early to tell, but it appears the company has more work to do before its stablecoin can be a success.
But then again, it’s Facebook, everyone’s favorite powerful and innovative yet flawed face of social media.
If Facebook has taught me anything over the years, aside from hiding my grandmother's notifications, it's to always keep pushing and try breaking new ground.
Until next time,
John Butler, Jr.
John Butler is Token Authority’s contributing editor. He first learned of Bitcoin in 2010 when it was still unknown. Since then, he has seen cryptocurrency and blockchain technology swell in popularity across the globe, making innovators and investors plenty rich. Every week, he brings Token Authority readers compelling information for crypto investing.
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