Foreword: The author of this article is not optimistic about Facebook's stable currency practice. However, unlike Facebook's previous actions in the payment field, this is a completely new field. If Facebook can take advantage of its user advantages to achieve a better cross-border transfer experience, it is not without opportunity. In any case, the addition of Facebook will make more people pay attention to the field of cryptocurrency, and may also bring more users. As for the mechanism of FacebookCoin and how to operate it, the veil may be unveiled in a few months. The author of this article, Michael K. Spencer, was translated by the "Blue Fox Notes" public account community "Xinxin".
Facebook is likely to launch a cryptocurrency that would allow WhatsApp users to transfer money instantly in the first half of 2019. Consumers who use Venmo or Zelle to transfer money need to use fiat currency. What is the motivation for using FacebookCoin in Facebook's instant messaging convenience?
Recall that every previous move by Facebook in payments has failed.
Facebook's History of Failures in Payments
Here's a list of failed experiments. TechCrunch recently reviewed some of these cases:
Facebook Credits, a virtual currency before that, launched in 2011 and discontinued two years later?
Facebook Gifts, launched in 2012, was discontinued two years later, in part to quote the famous Josh Constine:"Facebook never found a way to solve the distance and localization issues to make Gifts available globally"？
Facebook Messenger Payments launched in the US in 2015 and expanded to European markets two years later.
So how are stablecoins different? Facebook has been thinking about how to apply blockchain technology to meaningful scenarios for many years.
Doesn't Telegram (which already has cryptocurrency users) have a better chance in this matter?
At the same time, couldn't Square, Line, and others find a better way for their consumers than those who just use WhatsApp to communicate?"?"?
Facebook's stablecoin will not work like a real stablecoin, it will be more like JP Morgan's internal centralized token, where the benefits of blockchain are very limited.
Facebook's WhatsApp Coin is coming to India
Facebook Inc is working on launching a cryptocurrency that would allow users to transfer money via the WhatsApp messaging app, focusing first on the Indian remittance market.
Although the project is being secretly carried out within Facebook, based on multiple disclosures, we can basically assume that this is not a real cryptocurrency, but a simple internal digital currency that simulates a stablecoin. That would defeat the whole point of decentralization and consumer participation in a legitimate cryptocurrency.
Facebook has been looking to branch out in financial services since it hired former PayPal chief David Marcus in 2014 to run its Messenger app. Yet with each passing year, Alipay and WeChat Pay have been consolidating their operations and going global, while Facebook has remained a digital advertising company.
Before the Civil War, there were more than 8,000 currencies in the United States, which is quite similar to the current more than 2,000 cryptocurrencies. Tokenization means that assets are transferred to the blockchain. However, by only launching a simple internal currency, Facebook has defeated the wishes of all Bitcoin enthusiasts.
Focusing on the Indian market initially makes sense for WhatsApp because the existing payments structure in India is not as mature compared to markets like the US or the UK. This makes sense as WhatsApp has a very strong user base in developing countries including India and Brazil. However, you cannot buy and use Facebook Coins within its ecosystem. It will be an expensive fiat currency transaction for Indians if it is pegged to the US dollar. After all, one US dollar equals approximately 71 Indian rupees.
Facebook is looking at stablecoins as just another digital currency world that can be cloned and copied, but that’s not how the cryptocurrency world works. The high rate of adoption of cryptocurrencies is largely due to the idea of decentralization - a technology like Bitcoin suggests that there is no network owner. Facebook as an intermediary means only making the rich richer.
Facebook is exploring ways it can harness the power of blockchain technology, but it doesn't seem like it understands cryptocurrencies. Telegram and Signal are planning to launch new cryptocurrencies next year. Square wants to integrate Bitcoin Lightning Network technology, and has already done a very good job with Bitcoin transactions.
WhatsApp has always had a monetization problem, but ads that include digital currencies in stories may not be the solution. Facebook has proven through cloning and duplication that it does a terrible job of innovating, which is one of the reasons I'm skeptical about WhatsApp Coin.
The stablecoin FacebookCoin on the blockchain is not a cryptocurrency.
WhatsApp, owned by Facebook, can send messages to friends and family at any time from anywhere in the world. I can trust JP Morgan for instant money transfers, but what about Facebook? Facebook has a collection of apps that are more distracting than useful, and the product has never been very consumer-focused. Facebook's main revenue comes from advertising and its microscopic grasp of people's interests, hobbies and brand value.
Amazon has reshaped the ecosystem concept of a scalable business model, and in the next few years Amazon will surely grab Facebook's advertising market share.
It hardly makes sense for Facebook to seek a stablecoin for P2P transfers. Facebook would have to acquire Coinbase for this to gain relevance in the long run. Now, Telegram has about 300 million users around the world, and after raising about $1.7 billion in a giant ICO, it is also developing digital currency.
With a private, centralized blockchain, Facebook loses the whole point of decentralization, bitcoin, and consumer adoption of blockchain. That's basically why I think it's bound to fail, I'm not sure if the crypto community agrees with me?
