Facebook isn’t in a great place right now. The social network is still popular, as are its recent acquisitions- WhatsApp and Instagram. But, there’s one project people have their eyes on. A project that might perhaps, fail.
We’re talking, of course, about Facebook’s cryptocurrency push, for what is now called “Facebook Coin.” While we know nothing about it officially yet, speculation abounds. And while there’s no specific reason to say Facebook’s coin is going to succeed, there are reasons to believe it will.
Facebook isn’t a great friend to the crypto community
We have to start here. A small, relatively tight-knit community of programmers and economists currently works on Cryptocurrencies. Since blockchain, the technology behind crypto, is open source, most coders involved in crypto are too.
Guess what the open source community cares a lot about? Privacy. And data security.
Let’s just say, Facebook doesn’t have a good track record in either. Moreover, the company and its CEO Mark Zuckerberg has been repeatedly found lying about this. What’s worse than an insecure company that doesn’t care about privacy? One that will also lie to your face about it.
As such, Facebook Coin has already gathered more than a bit of criticism from the community. It hasn’t even been officially announced, but the company’s laughable track record has everyone braced for a disaster.
It’s not difficult to imagine, really. Blockchain, as a technology, is big on both privacy and security. Facebook isn’t. More importantly, the behemoth doesn’t really care about it. As such, many people in the blockchain community are expecting the worst for it. For example, the first mass crypto robbery to strike Facebook will happen about ten minutes after its coin launches.
Many are also giddy to see this project crash and burn.
Looking for something, anything, to make it look good
Zuckerberg is probably aware his coin isn’t going to be well received among crypto traders. He also knows most crypto proponents aren’t precisely open to giving him a chance.
So he’s doing what he can to change that. He’s desperately looking for legitimacy from other sources. Some of his moves with crypto assets management experts are in the public domain.
Some of these moves come from the people he’s hiring. MIT professor Christian Catalini, who founded the MIT Crypto economics Lab, is reportedly helping with development. Facebook execs have also reportedly met with Tim Draper to discuss their crypto push.
In other words, they’re trying to gain legitimacy by teaming up with people who are thought of as legitimate. But they know it’s not enough.
Becoming a real option in the market
Will Facebook’s attempts at crypto succeed if you can only use this coin on its platform. There are already comparisons of the unannounced coin to monopoly money and Fortnite v-bucks.
So the logical step for Facebook is to stage a launch where many big e-commerce players accept this coin. The cryptocurrency community can say whatever they want, but if thousands of stores immediately take FBCoins, they will succeed.
This is another of the steps playing out. It’s been reported that Zuckerberg has met with VISA and MasterCard to try and secure their cooperation with his project. He has also reportedly held talks with several other payment processors and e-commerce leaders.
This is a strategy that might work. Having this currency suddenly accepted everywhere will give out the impression that it is popular. Just by seeing many sites have “Facebook Coin”, the payment options will be enough to get many to look into it. It’s a move that serves as free advertising.
It may or may not work, but it is interesting regardless. However, there’s one more step Zuckerberg has to take if he wants his coin to earn some respect. At least, this much, we have heard by cryptocurrency investment analysts.
Joining the crypto market
Just having stores accept his coin won’t make it a cryptocurrency. PayPal is widely accepted, yet the money is digital fiat. Plenty of travel agency accept credit card miles, but it is not a cryptocurrency either.
There are websites where you can get virtual coins by clicking on a button each day, and later cash them in for video games. Those also aren’t cryptocurrencies, and they have existed long before the crypto age dawned.
In other words, digital currency isn’t the same as a cryptocurrency. Cryptocurrencies, as currently defined, require the use of a blockchain. And, in order to be considered one, they should also be exchangeable for other cryptos.
After all, you can exchange any fiat currency you want for other fiat currency. Some people might or not be interested, but for any legal tender out there, there’s an exchange somewhere. Having a walled garden for Facebook Coin will only attract criticism and ridicule.
So the final requirement is getting support from at least part of the community. The part that matters is the crypto exchange sites.
This is arguably the most important part of the plan. Specific members of the community can say what they will, but if the coin is listed in crypto exchanges, then it is crypto.
Luckily, some people are open to listening. Binance’s CEO has openly expressed enthusiasm for a Facebook coin. The CFO, in contrast, has heavily criticized the project, but there’s still a good chance Binance will list the coin. With bitcoin value hitting the rooftops of late, the more, the merrier.
Not that blockchain is a hard requirement for crypto. There’s a chance that sometime in the future somebody will come up with an alternative technology. But for now, we don’t know it, and it’s not likely Facebook, of all things, will invent it either.
Can Facebook succeed?
They might. We still don’t know what the offering will be, so counting them out would be folly at this point.
Truth is, there’s a good chance Facebook will do this properly. By having at least talked to the right people and even hired great blockchain hands, there is a probable chance of success.
For now, all we can say is – the right steps are mounting. Whether those right steps are enough to give the much-reviled company a fighting chance is yet to be seen.
By Denise Quirk
who is a Health Advisor and fascinated by Crypto and Blockchain Revolution.