Produced | Odaily (ID: o-daily)

Produced | Odaily (ID: o-daily)

On June 18, Facebook officially launched its cryptocurrency "Libra" (Libra) official website, and released the Libra white paper at the same time. The stable currency issued by Facebook finally surfaced.

Founder Mark Zuckerberg announced the news in a long post on his Facebook page.

"In the future, we hope to provide more services for individual users and businesses - such as paying bills with one click, buying coffee by scanning a QR code, or taking local public transportation without carrying cash or a subway card." Zack Berger said.

In the interpretation, Libra is considered to be similar to LIBOR (London Interbank Offered Rate), which heralds Facebook and Zuckerberg's ambitions to enter encrypted finance and payments.

According to the white paper, Libra's mission is a simple global currency and financial infrastructure that empowers billions of people.

As early as a year ago, Facebook entered the blockchain in an emergency, which was seen as a self-help action when Facebook was caught in the public opinion of the privacy gate.

A year later, Facebook officially handed over the one-year transcript of entering the blockchain. Facebook, the aircraft carrier of the Internet world, did not choose BAAS and other technical services that are easier to comply with, but chose a path that most challenges the existing cross-border payment industry - issuing a stable currency based on a basket of fiat currencies.

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Official announcement of "Libra"

On June 18, a blockbuster that had been warming up in the currency circle for nearly half a year officially landed, and Facebook officially released the white paper of its blockchain cryptocurrency project "Libra".

The reason why Libra is likened to a blockbuster is more due to people's desire in the currency circle for the social giant Facebook to bring 2.7 billion users into the market. It is hoped that Facebook will bring new money into the market and trigger a Bitcoin bull market.

In the white paper, Facebook raised such a pain point: the poor pay a variety of complicated fees for financial services, such as remittance fees, wire transfer fees, overdraft fees, and ATM fees.

Facebook believes that there are still some people who are hovering on the fringes of the current financial system. People who are "unbanked" often do not have enough funds and suffer from various expensive and unpredictable expenses.

Libra wants to build a simple, borderless currency and a financial infrastructure that serves billions of people through the blockchain.

Specifically, Libra has three major elements, namely: it is built on a secure, scalable and reliable blockchain; it has an asset reserve designed to give it intrinsic value; it is managed by an independent Libra Association responsible for developing the ecosystem.

In a more detailed interpretation, Facebook mentioned that Libra is designed to be a currency with a value-preserving function. Libra will not use gold as a backing, but will use a series of low-volatility assets (for example, backed by stable and reputable Cash and government securities provided by the central bank) as collateral.

This is consistent with what was mentioned in previous media reports that Facebook will launch a stable currency and anchor a basket of fiat currencies. Investors holding Libra will be able to convert their Libra holdings into local fiat currencies based on the exchange rate.

Calibra is both the name of a Facebook subsidiary and the name of Libra's companion cryptocurrency wallet DApp. Calibra is still under development, and users can download it in the app store in the future.

After the official announcement of the Facebook cryptocurrency Libra project, the price of Bitcoin has not been affected by large fluctuations. As of press time, Bitcoin was quoted at $9,146.

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Facebook in crisis, social empire in jeopardy

In 2018, the social empire built by Facebook encountered the biggest crisis of trust in history.

In March 2018, The New York Times and the British Observer reported that Cambridge Analytica used Facebook to "steal" 50 million user data during the US election. The supporters behind Cambridge Analytica stand in the Trump camp and are likely to use Facebook data to influence the US election.

Facebook's privacy crisis is imminent.

Facebook and its founder Mark Zuckerberg have been criticized by users and the media for allegedly leaking user data and influencing the U.S. election.

"Delete Facebook" became a popular hashtag at the time, and a large number of users boycotted Facebook by deleting their Facebook accounts.

By April 2018, the Facebook privacy door incident fermented to a new climax.

Zuckerberg attended a hearing in the U.S. Congress and was questioned by the U.S. Senate due to user data leaks.

At the hearing, the 34-year-old entrepreneur, who was worth more than US$50 billion and ranked fifth in the world's richest list, faced 44 congressmen's questioning by himself, and the hearing lasted for 5 hours.

Live pictures circulated on the Internet show that Zuckerberg, who has always been happy to attend various occasions in a gray T-shirt, rarely appeared in a suit. In the venue, he was arranged to sit alone. During the entire hearing, Xiao Zha's expression Serious and careful.

According to reports sent back by the media at the scene, Zuckerberg continued to apologize for the data breach at the hearing.

Facebook is caught in the most passive situation.

On the one hand, Facebook’s stock price has plummeted, and Bloomberg data shows that Facebook’s market value once evaporated by 59 billion U.S. dollars. Some media have calculated that in 2018, Zuckerberg's net worth has shrunk by 16 billion US dollars.

On the other hand, the crisis facing Facebook is much more than that. After the Privacy Gate incident, Facebook has also been caught up in incidents such as fake news, advertising and Russia.

Someone has documented all the scandals that happened at Facebook in 2018. According to statistics, in 2018, Facebook experienced a total of 31 major negative events, with an average of one public relations crisis every 12 days. By this point, Facebook's reputation had plummeted.

In response to Facebook's crisis, Facebook shareholders have considered impeaching Zuckerberg and asking Zuckerberg to step down as chairman.

Facebook co-founder Chris Hughes also published a review article "It's Time to Break Up Facebook" ("It's Time to Break Up Facebook") in the "New York Times" in May this year.

In the content of the article, he criticized Facebook's centralization and Zuckerberg's centralization: "Facebook's board of directors is more like an advisory committee than an overseer, because Mark controls about 60% of the voting rights...only Mark alone can decide how to configure Facebook's algorithm, it can decide what users can see in their newsfeed, it can decide what privacy settings users can use, and it can even decide which messages can be sent."

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Bet on the blockchain and seek new models

Multiple negative events such as the Privacy Gate incident not only shrunk Facebook’s market value, but also severely damaged Facebook’s reputation. As users kept leaving, Zuckerberg began to plan a self-revolution for Facebook.

For a long time, Facebook's profit model has been dominated by advertising. Income accounted for more than 90%. In Q4 of 2018, Facebook’s mobile advertising revenue accounted for approximately 93%, reaching US$16.64 billion; in Q1 of 2019, Facebook’s advertising revenue was US$14.91 billion, accounting for 98.9% of total revenue.

The reason why it has been able to obtain huge advertising revenue is closely related to the 2.7 billion users accumulated by Facebook in 14 years of long-distance running.

The personal data information of users accumulated on Facebook is the biggest advantage of Facebook. Based on the huge amount of user data, Facebook has achieved precise advertising delivery for the patrons, which has become the biggest selling point of advertising on the Facebook platform.

However, after more than a year of public criticism, Facebook has gradually realized that the model of "ad sales" alone is unsustainable.

Seeking new business models and changing the profit structure have become Facebook's new revolutionary goals for rainy days.

In May 2018, Facebook underwent the largest internal reorganization in history.

It is worth noting that after this reorganization, Facebook established a separate blockchain department. This group was led by David Marcus, an executive of Facebook's independent instant messaging application Messenger, and was assigned to Facebook's "New Platform and Architecture Group". ".

Marcus joined Facebook in 2014. Before becoming the head of Facebook's blockchain department, Marcus has been paying attention to the blockchain world and has also joined the board of directors of Coinbase, the world's largest bitcoin trading platform.

Three months later, Marcus resigned as a director of Coinbase to concentrate on blockchain strategy research at Facebook.

After its establishment, Facebook's blockchain department moved frequently and began to recruit new talents.

The blockchain group's recruitment announcement vaguely revealed Facebook's new territory: want to promote the use of blockchain on Facebook and improve the lives of billions of people around the world.

For Facebook's sudden establishment of the blockchain department, the industry has various expectations.

Some people speculate that Facebook wants to use the blockchain to transform the business of user privacy, and some people boldly predict that Facebook may fully operate on the blockchain.

In fact, as early as the beginning of 2018, when Zuckerberg announced his 2018 personal annual challenge plan, he revealed for the first time his attention to blockchain and cryptocurrency, and wanted to use cryptocurrency to realize the ideal of "empowering people" .

He said: "I am very interested in digging into the positives and negatives of these technologies (blockchain and cryptocurrency) and how to make the most of them in our services. This year will be a big year for Facebook to improve itself..."

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Planning to issue coins, Xiaozha wants to fulfill his payment dream?

Just when people thought that Zuckerberg might just use the blockchain to transform Facebook’s privacy pain points, he gave a different set of answers.

In December 2018, Bloomberg first broke the news of Facebook’s currency issuance.

At the end of February this year, the "New York Times" broke out more details again, saying that users can send money directly to contacts in its messaging system, just like PayPal's online cross-border remittance transactions. This gives Facebook a new argument for issuing coins to target the payment market.

At the same time, the New York Times quoted five people familiar with the matter as saying that Facebook is considering pegging the token to a variety of foreign currencies and the U.S. dollar to endorse the value of the token.

On March 6, 2019, Zuckerberg issued an article detailing his outlook on private social networking. In the article, he mentioned twice the vision of realizing privacy and security in the payment field, which confirmed from the side the previous Bloomberg and " The New York Times reported in two reports that it provides users with remittance services through the issuance of new currencies.

What is the purpose of issuing coins? Someone gave three points of analysis, one is for online payment, the other is a cross-border transfer medium for the global market; the third is the advertising business used in the integration of its ecology.

Facebook is trying to use the blockchain to create a payment ecosystem. According to Bloomberg, half of Facebook's blockchain division comes from payments companies, including Google Pay and Samsung Pay. One-fifth of the employees are former Paypal employees, and Musk, who was the vice president of PayPal, also recruited a large number of members from Paypal for the Facebook blockchain group.

Xiao Zha’s payment ambitions have also been reflected in Facebook’s early attempts, but most of them ended without a problem.

According to Odaily’s previous reports, as early as 2011, Facebook had launched Facebook Credits to simplify the transaction payment process related to virtual goods on the management platform, and Facebook charged a 30% fee for each transaction. Facebook Credits is also considered to be the first so-called "virtual currency" product launched by Facebook.

However, due to issues such as exchange rate fluctuations, Facebook Credits encountered great setbacks in international payments. After two years of experimentation, it was finally eliminated in 2013.

In addition, between 2012 and 2015, Facebook also launched Facebook Gifts and the "payment transfer" function on Messenger. However, neither of these functions has been widely used in the end.

On the other hand, Facebook's "social + payment" road in the international competitor WeChat has gone well.

Before WeChat entered the market, Alipay was the only and largest Internet payment provider in China. After WeChat entered the game with the "red envelope" method, WeChat instantly harvested a large number of users, and Alipay divided the domestic payment market.

Facebook, which started to copy from WeChat, was probably encouraged again.

This time, using the blockchain method to enter the payment, can Facebook win other competing products?

Now that it is entering the field of cross-border payment, Facebook is competing with banks for business. When the number of competing products continues to expand, it may be difficult for Facebook to shake the dominance of traditional companies in this field.

In this regard, Facebook's approach is to bring in traditional giants to play together.

The media The Information said that after launching the Libra cryptocurrency project, Facebook is recruiting third-party organizations to serve as its "nodes" for verifying cryptocurrency transactions, hoping to obtain 1 billion from 100 cooperative companies (also known as node operators). USD investment, each node operator invests USD 10 million in it.

On June 18, Facebook announced in its white paper the 26 companies it has cooperated with, and the 100 members of the Libra Association are the "founders" of the association.

Distributed in six categories of payment, technology and trading platforms, telecommunications, blockchain, venture capital, non-profit organizations, multilateral organizations, and academic organizations. In the list, unicorn companies such as Visa, MasterCard, PayPal, and Uber Impressively on the list.

This means that Facebook is likely to have expanded some new application scenarios for its own cryptocurrency.

With 2.7 billion users firmly in hand and the help of many well-known companies, the future of Facebook's cryptocurrency is imaginative.

"The launch of the world's super aircraft carrier task force will not only bring at least $1 billion in stablecoin value-anchored assets, but all 100 nodes will set off stormy waves in their respective fields." An industry insider commented.

With the disclosure of its encryption project partners, it indicates that Xiaozha's payment ambitions have long been beyond the ecology. And the addition of companies such as Visa and Mastercard will likely help Facebook's cryptocurrency expand to more users.

Meng Yan, vice president of the developer community CSDN, analyzed that if Facebook can effectively convert users to Libra, after several years of development, it may carry a transaction volume of 50 to 80 trillion U.S. dollars a year. Libra only needs to charge two thousandths of the handling fee, and the fee income alone is higher than the entire revenue of Facebook now.

Perhaps as Meng Yan commented, Facebook’s entry into the blockchain is to upgrade to a super bank that holds both coinage and credit rights in the digital economy world through the Libra project.

references:

references:

1. "Libra White Paper"

2. Meng Yan, "Facebook Digital Currency: Origin, Meaning and Consequences (Long Text)"

3. Moni, The Next Global Central Bank: Facebook

4. Chris Hughes, Shenyi Bureau Xitang, "It's time to split Facebook"

5. Wu Xusheng, "Facebook's Road to Currency Issuance"

6. Moni, All About Facebook's Cryptocurrency Project 'Libra'

7. Huang Xuejiao, dw, "Facebook Issuing Coins, the Life-and-Death Race Between the Internet and Blockchain Begins"

8. Moni, "Facebook has never been successful in the payment field, do you still have confidence in Xiaozhafacoin?" "

9. Doorman, "A former Facebook employee's self-report: In the first 6 months of the company's blockchain development, everyone was very confused"

10. "Zuckerberg's personality collapsed: In 4 months, Facebook lost 6 JD.com! "