Will the rise of Facebook Coin (Libra) threaten Bitcoin?
There have been murmurs, rumours and all sorts of innuendo emanating from the crypto and tech sectors about a potentially huge announcement: FaceCoin. Given the.
There have been murmurs, rumours and all sorts of innuendo emanating from the crypto and tech sectors about a potentially huge announcement: FaceCoin.
Given the astronomical user base Facebook enjoys, industry leaders are keeping a very close eye out on how the behemoth of social media implements this potentially game changing launch.
Online debate has created two distinct mainstream views on how this will all play out. In one camp we have those believing that a centralised Cryptocurrency such as FaceCoin will not capture the market that Bitcoin has forged for itself. Then there are those that believe FaceCoin will be a success in and of itself, whilst also potentially bringing more mainstream users to Bitcoin.
In either scenario, it seems like a win for passionate Cryptocurrency fans. So how did we get here?
According to the little information we have, Facebook have created an executive team purely tasked to explore the possibility of a Cryptocurrency for the platform. The founder of Facebook, Mark Zuckerberg, has hinted in the past of his interest in Cryptocurrency. The platform has attempted to create a virtual currency (non-crypto) of its own called ‘facebook credits’ which did not reach expectation and was phased out. This next attempt seems to be receiving the resources it needs to really gain traction.
So can FaceCoin really come close to threatening Bitcoin? Using the little information we have, lets analyse it.
FaceCoin will be centralised
Given Facebook’s poor data security recently, a centralised coin will have most of the crypto world, and a large majority of the ‘non-crypto’ world sceptical. Bitcoin has the advantage here with its track record of decentralisation.
Globalised v Localised
Bitcoin is a genuinely global currency; with no borders or platform boundaries. FaceCoin will likely stay within the Facebook eco-system. This separates their use case quite distinctively, unless of course FaceCoin implements external use also, that would raise some interesting scenarios.
It appears FaceCoin will be a ‘stable’ coin
If FaceCoin is created as a stable coin, it again will have a huge point of difference compared to Bitcoin. Bitcoin’s value is created by international economies of demand. FaceCoin would be pegged to something like USD. This limits FaceCoins use case as a tradeable asset; something Bitcoin has been popular for since the genesis block.
In summary, Bitcoin has a very large user base and an elite reputation. Where FaceCoin will have the advantage is its giant user base. The sheer numbers and resources Facebook can use to drive adoption and promotion will certainly have us watching on intently. Can Bitcoin navigate yet another enemy and keep moving forward?
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Disclaimer: Information is current as at the date of publication. This is general information only and is not intended to be advice. Crypto is volatile, carries risk and the value can go up and down. Past performance is not an indicator of future returns. Please do your own research.
Last updated October 18, 2022