Will Facebook, Twitter and Telegram lead the way to mass user adoption with their own upcoming cryptocurrencies?

It’s been a year since Facebook first indicated its intention to release its own cryptocurrency and they appear to be serious about it, having hired David Marcus from Coinbase Exchange’s board of directors to head up their crypto department. And even though Facebook is possibly past its peak in popularity – the younger generation apparently call it “Mombook” – it still happens to be the fifth biggest company in the world by market cap.

Their market cap actually climbed steadily until it peaked in July 2018 around $628 billion, and then fell sharply in the following six months to $376 billion by the beginning of this year.

This may have been precipitated by the Canbridge Analytica data scandal, where customer’s private data was harvested and sold to third parties for profit.

Nevertheless, Facebook is still a global giant in the social media industry and the market cap has since climbed back up to form a lower high at $509 billion this month. Let’s remember that Facebook also owns WhatsApp and Instagram – firm favorites among the youth, which have a combined total of around 2.7 billion users a month. That’s almost a third of the entire world population.

And let’s consider that for the cryptocurrency industry to really grow, it would benefit from the backing of a giant corporation like this.

As a result, interest in the upcoming potential release by the social media leader of its own cryptocurrency is hard to deny. Although there is still no release date and all information on the subject is coming from anonymous insiders, it appears that Facebook have 50 engineers working full time on what they say is a fiat-pegged stable coin. It may be an exclusive token to be used only on the social media platforms owned by Facebook, but apparently they are also promoting their coin to a number of crypto exchanges as well.

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So it’s only a matter of time before Facebook officially joins the cryptocurrency market, which "would indicate that digital money, as a concept, is fully mainstream and inevitably the way the world is going. This is something we have been arguing for a long time now — despite protestations from the likes of Warren Buffett." Nigel Green, CEO of deVere Group.

If we add to this the fact that Twitter and Telegram have also been exploring the use of a personalized cryptocurrency on their platforms, it might be correct to say that crypto already has mainstream acceptance. Jack Dorsey, the CEO of Twitter, has lifted the ban on crypto-related ads and said himself that he owns some bitcoin and that it will become the internet’s “native currency”. Twitter has actively supported the Lightning Torch or LN Trust Chain project that circled the globe recently.

And as for Telegram - the Russian-founded social media platform with 200 million monthly users – they have already raised some of the highest amounts ever for an ICO last year. It never even went public and only private investors were able to participate in the new GRAM token offering.

They will have their own TON (Telegram Open Network) blockchain set to rival even EOS and Ethereum, no small claim.

This will certainly facilitate a flood of new users once they go live.
Another Russian social media platform – Vkontakte – the third most popular website in Russia, has already recently launched their own VK Coin. At this rate these social media platforms could outdo even the current crypto companies and projects if they all get on board with their mass of users, which would certainly be an unexpected turn of events. With their enormous influence they may well take some of the market share from the current big players.

The main question however, revolves around whether these potential cryptos will be centralized or decentralized. By the looks of Facebook’s business model of controlling our user data, it appears initially that they will be centralized, and therefore not truly up to real crypto standard.

“These will be tokens that ride in their ecosystems. Users must trust these companies to operate the network in good faith and protect their privacy. The only thing any of these tokens will have in common with Bitcoin is that the word “coin” might possibly be used in their names. These will have little to no effect on Bitcoin and other similar cryptocurrencies that operate on a public peer-to-peer network.”

Arthur Hayes, CEO and co-founder of BitMex.

For example Vkontakte’s recently launched VK Coin doesn’t seem to even use blockchain technology in the usual way tokens do. Other commentators in the industry vary in their view of the potential new social media tokens. Iqbal Gandman, the managing director of eToro UK, believes they will simultaneously be both centralized and decentralized, not unlike some other tokens we already have, based on how the companies are designed and run.

Others though, think that Facebook wants to improve its tarnished reputation as well as capitalzse on the crypto phenomenon, and will be more decentralized, especially if they are currently negotiating with regular exchanges.

So whether the social media giants are launching an actual crypto or merely some form of in-house token remains to be seen. To really succeed they will definitely need to keep it simple. A user-friendly interface will be crucial to mass adoption, considering that many are still not familiar with using crypto in its current form, with the intricacies still confusing the mainstream population.

Nevertheless, that is exactly the speciality of these social media giants and is precisely how they became so widely adopted. They are simple and almost addictive to use. If they do get it right, they will probably bring in a wave of adoption and act as a gateway to our regular cryptocurrency industry, which is what we desire.

Ultimately the question we need to ask is will Facebook and the others end up becoming like banks? They may well take away customers from traditional banks, as crypto does already. With the adoption of their own money transfer system they will join the move towards the global digitalized financial industry. And like any stable coin, Facebook will need to keep significant amounts of fiat currency in reserve to back up their token, forcing it to act like a bank. The implications for the banking sector and perhaps more importantly for Facebook and the rest could be huge.

The world’s unbanked may be scooped up in the net cast by the social media platforms, since most of those unbanked own a smartphone and are probably using one social media app or the other.

The next thing you know “Facebook Bank” may be offering millenials all sorts of financial services like loans, credit cards or other investment products.

They certainly know the minds of the youth, having been so expert in capturing our data and will be able to customise their packages perfectly. A whole new ecosystem could emerge just like it has with crypto in general, but now still more nuanced. The tokenizing of all things, including our data, is on the rise.

Once giants like Facebook, Twitter and Telegram launch their own cryptocurrency many other smaller companies that do business with them will also follow suit by adopting crypto, leading to a massive groundswell of new users and so whether they are real crytpocurrencies or just in-house tokens, they will certainly be positive for the credibility of crypto and initiate greater general awareness of the industry among the masses.