Since we first reported on Facebook’s cryptocurrency project, we have watched the coin very carefully. Surprisingly, Facebook’s so-called Facecoin, now known as Libra, is set to do more than many expected for other digital currencies value which is certainly exciting news.
Facebook’s Cryptocurrency in a Nutshell
In short, the new Facebook-developed coin is going to be called Libra and it will be used to make fast and easy payments both in the online marketplace and on the Facebook platform. The coin’s value will be directly connected to the number of funds set aside to back the coin up. The funds backing up the coin will be government tender, so, by extension, using Facebook’s coin will be similar to using traditional currency. The coin will also be governed by a private group which is removed from Facebook’s organization and will launch in 2020.
Not Everyone Impressed
According to some, the middle-grounded nature of the coin comes across as being lackluster at best. People want to see innovation, and some simply don’t believe that Facebook went far enough with their latest crypto project. The problem, according to the unimpressed, is that since Facebook’s coin is not a fully digital asset that can be freely trading like Bitcoin and other digital assets there are too many limits about how it can be used and adopted. Also, since Facebook will not be governed by the Facebook itself, it lacks some of the potential that it would have otherwise. Theirs is only part of the story, however.
Cryptocurrency Experts Optimistic
Given Facebook’s immense popularity, there is more than enough reason to believe that Facebook has the power to usher in a new wave of confidence in cryptocurrencies and blockchain technology, in general. Facebook has partnerships with some of the largest financial companies in the world and their following numbering in the billions is certainly enough to create change in the current market. Considering that payment services like Visa and Mastercard are behind Facebook, other financial institutions are much more likely to take blockchain technology more seriously following Facebook’s entry into the crypto marketplace.
This is not the first time that Facebook has established its own in-house payment system, and many have questions as to whether Libra will do any better than previous attempts. The large-scale validation of technology powering digital assets means, however, that whether Facebook’s crypto project is successful or not, it will still benefit virtually all other blockchain projects, both directly and indirectly.
As can be expected, Facebook is still very quiet about the details of Libra. What we know is that it will have more in common with a stablecoin than a traditional cryptocurrency in that Libra’s value will be pegged to government tender. Therefore, stablecoins may run into direct competition with Facebook on certain platforms, but it will not likely cross paths with the likes of Bitcoin. The boost in Bitcoin’s value will come indirectly as more and more financial institutions and government bodies put trust into blockchain technology. The ripple effect will then, of course, lead to greater investor confidence which will, in turn, lead to greater desirability for cryptocurrencies and digital assets in general. All in all, Facebook’s new venture seems set to improve the playing field for everyone in the blockchain space.