It seems that the unconfirmed report about Facebook’s intention to incorporate a digital coin into one of its messaging applications has become one of the biggest topics of speculation. As always, a lot of people began making unreasoned conclusions and ‘prophesizing’ that this coin would turn out to be the dagger into the grave that had long been dug out by skeptics and ill-wishers of Bitcoin, the cryptocurrency heavyweight that still can’t recover from the knockout dealt at the inception of the lingering Crypto Winter.
The superficial reasoning of those who believe that the Facebook Coin would topple Bitcoin from the crypto throne is quite comprehensible. Facebook Inc. is among the biggest informational technology corporations in the world, possessing virtually unlimited financial and intellectual resources. However, Facebook dominant stance didn’t ensure the company from getting caught into numerous scandals concerning major data breaches and privacy issues. The point is that even the tech superpowers are prone to turning decent ideas into utter failures. Just check out, how Google Plus has been doing recently. Even the fact that Facebook hasn’t even officially announced its intention to introduce digital tokens should make people refrain from jumping to conclusions.
One of the first news pieces about the Facebook coin was published last December in one of the leading U.S. outlets. According to the information obtained from the anonymous sources, the special team of Facebook developers has been working on a cryptocurrency that should be integrated into the WhatsApp messaging application, which was acquired by the corporation in 2014 for $19 billion.
The corporation even established the department for blockchain initiatives, which was headed by David Marcus after he left PayPal. It is believed that this team consists of as much as forty engineers who are exploring ways to leverage the advantages of blockchain.
Rumour has it that the Facebook cryptocurrency will come in the form of a stable coin with its value pegged to the U.S. dollar as well as, presumably, some other strong fiat currencies like Euro, British pound or Japanese yen.
Presumably, the WhatsApp users will be able to use FB Coin as the mean for sending remittances to their friends or purchase some intra-app services, but it is yet unclear how the recepients would be able to convert the coins to fiat since there has been no information about Facebook being engaged in negotiations with any crypto exchange.
According to the info from another unidentified employee, the company plans to give FB Coin a test run on the remittances market in India, where the active user base of WhatsApp amounts to 200 million, before considering the worldwide implementation.
It is important to understand that FB Coin and Bitcoin are conceptually different instruments and there is hardly any ground for competition. Firstly, the Facebook currency would be a stable coin thereby have absolutely no potential as a trading tool. Secondly, one can hardly imagine that Facebook would develop a decentralized blockchain that would fall out of control of corporate management. Thirdly, Facebook would find it difficult to establish the fully-fledged cryptocurrency from the legal point of view.
All in all, even if the Facebook Coin sees the light of day, it has more chances of turning into the next JPM Coin than a real threat to such an established solution as Bitcoin.
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