It is no longer news that Facebook Inc., is planning to launch GlobaCoin, its own cryptocurrency that will facilitate global payments.
But a digital currency is not but another ‘shitcoin’ ( a term used to described many digital tokens that either became worthless because of lack interest or their prices plummet after an initial rise) with the needed support by cryptocurrency exchanges and the entire global crypto community at large.
To avert this misfortune, Facebook is said to be rallying supports from some of the major forces in exchange, wallet and trading.
However, information are getting out that Facebook’ founder, Mark Zuckerberg, has entered several alliances some of which included Coinbase, a major wallet and crypto exchange based in the US, Winklevoss twins’ Gemini exchange and one of the largest high frequency trader, Jump and DR.
People with the knowledge of the matter said the move is to ensure GlobalCoin token is liquid, trade able and secure.
Facebook is midwifing the GlobaCoin project with its own Blockchain company called Libra Networks LLC, a company registered in Geneva, Switzerland. The choice of Switzerland is also instructive as to the seriousness of Zuckerberg. In recent years, Geneva has been acclaimed as the world’s most-friendly city to Blockchain innovation and investment.
With the information available, GlobalCoin would be integrated across Facebook, WhatsApp and Instagram – the company’s major products all commanding more than 70% of the global social, messaging and content sharing market share.
According to data released by Facebook, WhatsApp has over 1.5 billion users worldwide across 130 countries. Instagram now boasts of about 1 billion people while Facebook itself has about 2.2 billion users. It therefore shows the scale GlobalCoin can leverage should the token get released on Facebook’ three major platforms for payments within and outside of the three apps.
However, this doesn’t downplay the importance of cryptocurrency exchanges, wallet platforms as well as actual crypto trading firms. The reason is that Facebook and Zuckerberg are coming into a market that is already developed with it’s nuances, lack of adoption and acceptability could spell doom for GlobaCoin in the medium and long term. In short, the token has to be stored, traded and used on exchanges not tied to Facebook. Also, the fact that GlobalCoin would be a centralised cryptocurrency could also affect it’s acceptability as opposed to Bitcoin and Ethereum that are fully decentralised.
Apart from the technical side of things, there are concerns that many people within the crypto community could be apathetic towards Facebook’s GlobalCoin. This is because in recent times, the company has gained alleged notoriety for allowing its user data to be accessed by unauthorised persons who then use them for untoward cases.
Last year, Facebook was enmeshed in a data theft scandal when a UK political data consultancy, Cambridge Analytica was exposed to have gotten access to hundreds of millions of Facebook users’ data for political campaign targeting on behalf of politicians across America and Africa.
Apart from the Cambridge Analytica mess, Facebook is also faced with various security concerns on its platforms. Earlier this month, the company announced a breach in its WhatsApp call where an Israeli company was said to have infiltrated certain calls with a spyware that records people’s WhatsApp calls without them knowing.
These and many other issues relaying with data security and privacy of users that would affect the acceptance and usage of Facebook’s crypto.
In recent times, Facebook has been taking bold steps. Few days ago, Facebook announced at a summit that it will allow ads within it’s WhatsApp messenger by 2020, a plan that will coincide with the release of GlobalCoin.