If you haven’t already heard, Facebook is set to release a new cryptocurrency which will allow for instant monetary transactions on a variety of Facebook-owned messaging apps, including Facebook Messenger and WhatsApp. Blockchain enthusiasts the world over are becoming more and more curious about what this new venture by Facebook will actually mean for the everyday user.
This is not the first attempt
Despite the growing curiosity about what Facebook’s new FaceCoin will actually do for the people using the stablecoin, it is important to note that Facebook has tried to go down this road before – a few times.
The first time Facebook experimented with money transfers was all the way back in 2011 when Facebook released Facebook Credits, then came Facebook Gifts a year later. Both of those methods meant for peer-to-peer money transfers lost popularity and fizzled out within 2 years from their original launch date.
The failure of those methods mainly came down to the platform’s inability to reach the entirety of its users. They were not able to expand the payment services to a large enough audience to allow the systems to take hold, and as a result, both Facebook Credits and Facebook Gifts couldn’t find a strong enough footing.
What’s different this time around?
Put simply, the new FaceCoin is Facebook’s attempt to leverage blockchain tech and comes with the possibility to offer a far greater list of benefits to what was previously on the menu.
It’s important to remember, however, that just because FaceCoin will be built on a blockchain it will not behave like a standard cryptocurrency. Mainly because it will be a stablecoin which will not fluctuate in value based on a system of supply and demand. Instead, the coin price will remain constant thanks to Facebook’s ability to control the supply of the coin to keep the value steady. Of course, for this to work Facebook will have to back its FaceCoin with fiat currencies.
FaceCoin is up against several important challenges. There is the obvious debate as to how anonymous it will allow its users to be, as well as the privacy concerns for those who do not necessarily trust Facebook with their financial transactions and other private data.
Once those hurdles have been cleared, users have to figure out what uses their new stablecoin is going to be. FaceCoin will more than likely be used for platform-related purchases and for peer-to-peer transfers as we already mentioned, but whether users will be able to shift their FaceCoins into legal tender is a feature that remains to be seen.
Some say that Facebook’s new currency should remain platform specific and others would like to see it branch off into other uses such as paying fees and making purchases to third-party sellers. Both schools of thought have strong points of support for their arguments, but assuming Facebook is actually able to overcome the difficulties the lie ahead the ability to use FaceCoin is everyday life could be a very big thing.
What will it take?
It’s hard to say at this point where exactly Facebook is going with their new cryptocurrency, but let’s just assume for a moment that the platform is able to strike up enough deals with a large global network of financial systems to enable and facilitate the transfer of FaceCoins into fiat currency. It would mean that anyone with a Facebook account would have a digital wallet (similar in many ways to PayPal) that they could use almost everywhere and access from any internet connection, anywhere in the world.