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Facebook is close to launching its own cryptocurrency, but a lot of details are still unclear. Who are working on the project and what will the coin be used for? Here are the most interesting details from the New York Times report on Facebook entering the cryptocurrency space.
What is the Facebook Coin for?
First of all, it's not yet confirmed that the cryptocurrency issued by Facebook will be named Facebook Coin. There are a lot of other (comical) suggestions, such as Zuckbucks, or FaceBucks.
So let's look at the first use case Facebook has for their currency. While it plans to roll out the coin over all its platforms (Facebook, Messenger, Telegram and Whatsapp), the prime focus will be on Whatsapp first.
According to the New York Times report, Facebook is working on a coin that users of the messaging platform can use to send to friends and family, thus making Whatsapp not only a messaging platform but also a payment platform.
Not a regular stablecoin
The coin that Facebook is planning to launch will not be a volatile coin for the traders. The company plans to make it a stablecoin. However, it's not a stablecoin as many others, that are linked to the dollar or one single other currency.
Facebook wants to make a basket of different currencies and peg their coin to that basket. Much like the Special Drawing Rights (SDR) international reserve asset created by the IMF. The value of SDR is based on a basket of five different currencies: the dollar, the euro, the Chinese yuan, the Japanese yen and the British pound.
Read more: 'If Facebook Coin is listed on exchanges, we're on for a helluva ride'
Secret cryptocurrency team
According to the report of the New York Times, Facebook's blockchain explorations are very secretive. The department works from an office that no other Facebook employees can access. The team is rumored to be around 50 engineers strong, and is being led by former PayPal president David Marcus.
Will Facebook be in control or not?
The biggest question now is: is Facebook fully controlling their cryptocurrency, or will it create some form of decentralization? The conclusion of the New York Times is: if it takes full control, there is nothing that makes Facebook Coin better than any other fast payment service such as Visa or Paypal. If it introduces some form of decentralization, the coin could be used for illegal purposes, and Facebook wouldn't easily make money on transaction fees.
A big question for Facebook: how much control will it retain over the cryptocurrency it is creating? For now, it appears FB is trying to make the system decentralized to some degree, creating a coin that could be transferred outside the FB ecosystem. https://t.co/liup4kwoi8
— Nathaniel Popper (@nathanielpopper) February 28, 2019
With the launch of Facebook Coin, cryptocurrency will be introduced to literally billions of people. But will it be a true cryptocurrency?
Read more: 'Facebook Coin' might be ready to trade in first half of 2019