facebook coin, Blockchain, Libra project

Facebook Blockchain will be a cryptocurrency-based payment system that will be powered by the company’s own cryptocurrency. Facebook Coin will be a stablecoin pegged to the US dollar one-to-one.

Facebook Blockchain, Project Libra, and Facebook Coin

As part of a mysterious plan known as Project Libra, Facebook will launch its own cryptocurrency called Facebook Coin (or FB Coin) in the first quarter of 2020. But what will it be, how will it work, and what will it be used for? We don’t yet have all the answers, but there is enough information to piece together a complete picture.

What do we know so far about Facebook Coin?

According to reports, Facebook Blockchain is a cryptocurrency-based payment system powered by its own cryptocurrency. Facebook Coin will be a stable coin pegged to the US dollar one-to-one.

It’s no secret that Facebook wanted to enter the mobile payments market by integrating it into its social media apps such as Whatsapp, Instagram, Messenger, and Facebook. The first attempts at this date back to 2015, when the company announced plans to integrate mobile payments into the Messenger app. However, Mark Zuckerberg first suggested in January 2018 that Facebook will consider how to use cryptographic encryption and cryptocurrencies in its services. In his own words:

There are significant counter-trends, such as encryption and cryptocurrency, that take power away from centralized systems and return it to the people. However, they run the risk of being more difficult to control. I’m interested in learning more about the benefits and drawbacks of these technologies, as well as how to best incorporate them into our services.”

Later in May 2018, the first rumors surfaced that Facebook was forming a team dedicated to blockchain and cryptocurrency. David Marcus, former PayPal president and VP of Facebook’s messaging products, has been named project leader. Many speculated at the time that Facebook was planning to launch its own cryptocurrency.

In June 2018, Facebook announced the appointment of Evan Cheng as Director of Engineering and Blockchain. This sparked speculation about Facebook’s cryptocurrency strategy.

Until December 2018, when Bloomberg published a report about an upcoming stablecoin for WhatsApp users, which sparked speculation about a “WhatsApp coin.” It was speculated that the coin would target the Indian remittance market.

It was reported in February 2019 that Facebook was already introducing Coin to various cryptocurrency exchanges. The new cryptocurrency will be known as “Facebook Coin,” or simply “FB Coin.” Mark Zuckerberg has admitted in the media that he is interested in using blockchain technology as an authentication tool on social networks.

Nathaniel Popper reported in April that Facebook is seeking USD 1 billion in outside funding for its upcoming Facebook Coin. He also stated that the stablecoin will be linked to a basket of currencies.

Shortly after, it was revealed that Facebook has been in talks with VISA and Mastercard about its Facebook Coin, and that it is in contact with dozens of other financial companies and online traders to assist in the launch of its cryptocurrency-based payment system. Furthermore, the project’s enigmatic codename, “Project Libra,” has been revealed.

According to the most recent May 2019 reports, Facebook has hired two Coinbase compliance specialists to assist the company in preparing for the launch of Facebook Coin in the United States. Furthermore, according to Reuters, Facebook has established a new company called Libra Networks in Geneva, Switzerland. Libra Networks will concentrate its efforts on investment, payments, funding, identity management, analytics, Big Data, blockchain, and related technologies.

According to a sourceless report published by the BBC in late May, Facebook will begin testing its token, TokenGlobalCoin, in late 2019 and plans to release it in the first quarter of 2020. The report also mentions Facebook discussions with institutions such as the Bank of England, the United States Treasury, and Western Union.

Despite numerous leaks, reports, and rumors, Facebook has yet to issue an official statement on the Libra project. The company continues to stand by its recent statement that “Facebook is exploring many different uses of cryptocurrencies,” without disclosing much about the use case of Facebook Blockchain and Facebook Coin.

What could the Facebook blockchain be used for?

So far, we can only speculate on what a Facebook coin and blockchain might be and what they might be used for. However, Facebook’s 2.4 billion users will soon be able to discover, browse, and receive product recommendations from their favorite influencers, as well as organize shipping and make payments, according to The Telegraph.

The announcement coincides with Facebook’s recent announcement of its largest redesign in a decade. According to reports, Facebook’s website and app will become more private, with a focus on private groups and new personalized news feeds. According to the latest F8 conference, Facebook will no longer function as a “town square,” but rather as a “living room.” Libra Networks and a native Facebook blockchain are likely to play a key role in encrypting user data, identity management, and private conversations.

Aside from privacy and security, Facebook’s blockchain is likely to strengthen the social network’s cryptocurrency-based payment system. A system like this would allow peer-to-peer (P2P) transactions on its existing social media platforms as well as purchases on external e-commerce sites. According to the Wall Street Journal, Facebook may eventually develop a convenient payment gateway that can be embedded in various third-party applications and websites, similar to the like and login buttons on Facebook.

Facebook already has a built-in marketplace for buying and selling various goods. Blockchain could be used to make payments and manage reputation on the platform without leaving the platform. A similar development could have far-reaching consequences for business websites.

The same can be said for Instagram and Whatsapp. Instagram has benefited from thriving influencer marketing in recent years and has become a hotspot for any consumer business. In October of last year, the company launched a dedicated shopping channel for businesses on the platform. The ability to directly list, market, discover, and pay for products on the platform would only bring sellers and buyers closer together.

In the meantime, Whatsapp has been testing its mobile payment feature in India. For the time being, the system requires users to enter their original phone number as well as a bank account that supports Unified Payments Interface (UPI), an Indian real-time payment system used for local interbank transactions. As a result, it is unlikely that no cryptocurrency will be involved for the time being, especially given how hard India is cracking down on all things crypto. According to Mark Zuckerberg, the payment product will be gradually rolled out to other countries later in 2019, so we may see Facebook cryptocurrency in use by then. It’s also not out of the question that WhatsApp will get its own product catalogs.

Such moves indicate that Facebook’s primary goal is to compete in the e-commerce shopping sector, taking on online giants such as Amazon and eBay, as well as online payment companies such as PayPal, Apple Pay, and Google Pay. Facebook blockchain will most likely be used for user payments as well as to improve Facebook’s security, user identity authentication, and privacy.

In this case, what are the possible applications for Facebook Coin?

What are the potential applications for Facebook Coin (FB Coin)?

So far, much has been speculated about what Facebook Coin might mean for social media users and the rest of the world. If the reports are correct, FB Coin is most likely an externally funded stall coin backed by a basket of foreign currencies. According to reports, the Facebook coin will be pegged to the US dollar at a 1:1 ratio.

A coin of this type could have several applications:

A Facebook wallet that contains a Facebook coin that can be used to pay for goods and services from partner merchants or advertisements on Facebook, Instagram, or Whatsapp.

Sending Facebook cryptocurrency to friends to split bills and other Facebook app expenses (Whatsapp, Messenger, Facebook, and Instagram).

“A web-based checkout option.”

For viewing ads on social media, users could be rewarded with fractions of FB Coin.

Similar to Steem, users could be rewarded for their social network activity (posts, likes, and comments).

Using Facebook Coin, merchants may be able to reduce transaction fees.

Users may be able to use Facebook Coin to purchase goods directly from advertisers and influencers.

There could be some interesting integrations with the VISA and Mastercard payment networks, allowing users to easily convert Facebook Coins to fiat currency.

Facebook hopes that e-commerce companies and app developers will accept its coin so that it can become another online payment gateway.

Will Facebook’s cryptocurrency compete with Bitcoin, Ethereum, and other open cryptocurrencies?

Facebook is unlikely to create an open, decentralized ledger. According to experts, the Facebook Coin will be a centralized payment system that will use stablecoins like Tether (USDT), Circle (USDC), TrueUSD (TUSD), or Paxos Standard Token (PAX). According to Weiss Ratings’ Juan M. Villaverde, Facebook’s cryptocurrency will not function as a true crypto asset, but rather as a blockchain version of PayPal, Apple Pay, Google Pay, and credit cards.

In his own words:

“Facebook Coin will compete with existing payment systems. Cryptocurrencies such as Bitcoin and Ethereum are being designed from the ground up to be destroyed.”

He claims that the company is not entering the cryptocurrency market, but rather applying blockchain technology to the traditional fintech industry.

“The Facebook Coin will add another layer to the existing financial system, adding another intermediary, another counterparty, and all of the associated risks. Each of these layers is expected to be rendered obsolete by Bitcoin and other cryptocurrencies “Juan M. Villaverde says

Others, on the other hand, believe that the Facebook coin will boost crypto adoption and increase the legitimacy of the crypto industry. Spencer Bogart, a partner at Blockchain Capital, believes that “social media giant Facebook could theoretically bring digital assets closer to a large number of potential users and even act as a “dramatic catalyst.””

There are, however, opposing viewpoints. Lisa Ellis, a partner at Moffett Nathanson, for example, believes Facebook could opt for an open system managed by an independent board.

According to Barrons, “an open cryptocurrency system is more likely to encourage trading through the Facebook system than a closed crypto system because an open crypto system is more liquid (easier to exchange into/out of fiat currency, so more likely to use it).”

Furthermore, Facebook has already attempted to implement Facebook Credits, a closed payment system that was a failure. The collaboration with VISA and Mastercard appears to confirm that Facebook’s blockchain theory is simply another internet gateway, similar to Apple Pay and Google Pay.

ColdFusion, a YouTuber, has also spoken out, raising additional privacy concerns. He believes Facebook Coin has the potential to be a game changer in developing markets, but it may also introduce new privacy concerns related to users’ consumption habits and transaction data sharing.

“While Facebook may claim to care about privacy, that hasn’t always been the case,” the YouTuber observes.

We have yet to see what Facebook Coin and cryptocurrency will look like, despite all of the opinions and speculation.

Be cautious of the Facebook Coin or FB Coin scam.

So far, everything we know about Facebook Coin from Facebook is summed up in the following quote:

“Facebook is looking into ways to leverage the power of blockchain technology. This new small team is looking into a variety of applications. We don’t have anything else to say.” [/B]

Regardless, that doesn’t stop hardworking Internet scammers from doing what they do best. Several websites, such as Facebooktoken.org, are already organizing a Facebook ICO.

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