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Facebook is making its entry into the world of cryptocurrency. According to a report of the BBC, the social media giant will launch 'GlobalCoin' in 2020. Here's everything we know about Facebook's cryptocurrency so far.
When will Facebook's GlobalCoin launch?
The plans of Facebook are to start testing its cryptocurrency in Q4 2019 and to roll it out for the public in Q1 2020. Despite the name 'GlobalCoin', Facebook's cryptocurrency won't be launched globally at first. Users in about 12 countries can start using GlobalCoin during the first 3 months.
An official Facebook announcement on its new cryptocurrency is expected in the summer.
How long has Facebook been working on its cryptocurrency?
Facebook first explored the world of digital currencies almost 10 years ago already, with the creation of Facebook Credits, a payment token for apps on Facebook. It failed, and after two years, the project was ended.
The current project, started last year, with Facebook confirming it was exploring the options within blockchain. According to a report of the New York Times earlier this year, more than 50 people have been working secretly on the Facebook project, operating from a building that is not accessible for other Facebook employees.
On May 2 of this year, Facebook officialy registered the company Libra Networks in Geneva, Switzerland. Libra will 'provide financial and technology services and develop related hardware and software', The Independent reports. Facebook's cryptocurrency project has been nicknamed Project Libra.
What is the use of GlobalCoin?
Although there are not many details out on what GlobalCoin will be used for, it's highly likely GC will be used for payments both within and outside the Facebook ecosystem. According to the BBC report, Facebook is in talks with 'a number of online merchants to accept the currency as payment in return for lower transaction fees.'
It is also expected that GlobalCoin will be used on platforms such as WhatsApp, Messenger and Instagram, owned by Facebook, to allow people without a bank account to transfer value to each other through the Facebook ecosystem.
GlobalCoin will likely be a stablecoin pegged to different currencies, such as the dollar, the yen and the euro.
What is Facebook trying to achieve?
Or maybe a better question: why won't Facebook just use another cryptocurrency, or even Bitcoin? It looks like Facebook is trying to disrupt Bitcoin by teaming up with banks and governments. Yes, Facebook and banks trying to disrupt Bitcoin that is trying to disrupt the banks.
With Bitcoin not being supported by the banking industry and large governments, Facebook is trying to get the traditional parties on their side. Mark Zuckerberg met with Bank of England governer Mark Carney and also got in touch with officials from the US Treasury. Next to that, Facebook is in talks with money transfer firms such as Western Union.
Everyone who doesn't like Bitcoin because decentralization is scary, can come to Facebook for their shot of centralization.
Pros and cons
That brings us to the pros and cons of GlobalCoin, as there are mixed reactions in the crypto community to the plans of Facebook.
CON
It's centralized... as hell
With decentralization as a core value of Bitcoin and many other cryptocurrencies, it's easy to say Facebook's cryptocurrency cannot be named a cryptocurrency at all. Different projects playing in different leagues. Yes, GlobalCoin will operate on the blockchain, but Facebook will have full power over the network. Data, not safe. Anonimity, nope. Safety? Nah. A vulnerability in Facebook (wouldn't be the first) could expose GlobalCoin.
But most importantly, a lot of the core values Bitcoin and cryptocurrency have, GlobalCoin doesn't share.
Will Facebook's coin be useful for global payments? Maybe.
— Stephen Cole (@sthenc) May 24, 2019
Does it present a threat to Bitcoin? Nah.
Despite what the media will emphasize, it will still be centralized, permissioned finance at the cost your personal data.
Stack sats. Hodl on. Change the game. https://t.co/YD9t89X9NO
PRO
Hello 2.4 billion people
As blockchain researcher Garrick Hileman points out in the BBC report, 'GlobalCoin could be one of the most significant events in the short history of cryptocurrencies.' With only an estimated 30 million users in crypto, and 2.4 billion monthly users on Facebook, the world of cryptocurrency will open up to a large part of the world with the introduction of GlobalCoin.
So yes, GlobalCoin is not decentralized, and impossible to compare with Bitcoin in many ways, but it can provide the gateway to Bitcoin and all other cryptocurrencies for billions of people. Once they made the first step through Facebook, a whole new world of true cryptocurrencies will open up to them.
It's official. #Facebook will launch their own '#GlobalCoin' next year. This will greatly increase the awareness of #crypto in many countries. As billions start their journey down the rabbit hole they'll discover the real power lies within true cryptocurrencies like #Bitcoin. 😀
— Alex Saunders (@AlexSaundersAU) May 24, 2019