Facebook Coin - A closer look
This is the second initiative from Facebook after they tried to introduce Facebook Credits during 2011 and was not successful. This time it may translate into a success due to the following reasons. I am keeping the arguments on the centralization, stable coin and comparison with Bitcoin to a later post.
Feasibility of massive adoption: Facebook, WhatsApp, and Telegram combined user base of over 2.7 billion. WhatsApp alone has more than 1 billion daily active users and crypto transfer can be a click of button and trust is pre-established. Telegram biggest messaging applications in South Korea and Japan, Kakao & Line.
Similar successful products in the market: Venmo has taken off in the United States by making it easier to send payments by phone. And in China, many consumers use the payment system that operates inside the hugely popular WeChat messaging system.
Ease of opening a Facebook account compared to a bank account. Regulation and compliance is the next big puzzle to solve for Facebook.
Coin backing with fiats making it more versatile: Unlike JPM Coin backed by USD alone, Facebook could guarantee the value of the coin by backing every coin with a set number of dollars, euros, and other national currencies held in Facebook bank accounts.
Coin launch followed by Blockchain adoption laking it a robust approach: As Facebook recently revealed their plans to integrate blockchain technology into Facebook Login and betting on blockchain technology by bringing data security aspects, it seems like the next level details on FC will be very interesting.
The big question facing Facebook is how much control it would retain over the digital coin. If Facebook is responsible for approving every transaction and keeping track of every user, it is not clear why it would need a blockchain system, rather than a traditional, centralized system like PayPal. Let us follow another interesting development.