There's been so much of hype on social media and the media in general surrounding Facebook's proposed cryptocurrency, code-named: Project Libra, i thought i'd give my 2 cents...
Much of the proposed coin by the social media giant has been kept secret but if the most recent reports are to be believed we can expect a multi currency backed stable coin with which users can pay for things across Facebook owned sites such as Instagram, Whats app and Facebook itself. Furthermore, in May 2019 Facebook hired two former Coinbase compliance officers named Mikheil Moucharrafie and Jeff Cartwright. In the same month the BBC reported that Facebook had plans to launch it's coin in the first part of 2020. Facebook is also reportedly in conversation with many financial institutions, not least of all Mark Carney from the Bank of England, a known supported of Fintech as well as numerous other apps and other institutions such as eBAy, Uber and Vodafone. So it looks like it is "game on" for the Facebook currency but what will this mean for the industry and investors?
Well, here's the thing. Despite everyone's supposed excitement I'd exercise caution. Facebook wont look to create a game changing piece of blockchain tech that will change the way we think about cryptocurrency. Facebook will simply look to build higher the wall of their social media empire. Customers will be encouraged to buy coins and spend them across Mark Zuckerberg and his associates websites, The idea being that if they own the coin that they wont choose to go elsewhere. People who invest in crypto currency love the decentralisation, the ability to store it without the need of a middleman. How will this coin improve upon any of those features? I really don't see it myself. The rich will get richer and the poor will stay poor. This wont be an investment opportunity - It's a stablecoin. Facebook already dominated the https protocol and now they want the blockchain.
Think about it
Facebook currently has 2.38 billion (Yes BILLION) monthly active users as of March 2019 against a global population of 7.6 billion. That could lead to financial influence of the likes we have never experienced in the world. Imagine if a majority of users invest in this coin, they wont be interested in blockchain or traders, at least not in the traditional sense. These people will be looking to buy second hand trampolines for their kids on eBay market place or spend some (more!) money on some of the sites, companies and apps that already have a strangle hold on the market place. Such enormous wealth could be created for so few, every coin bought- a cut, every transaction made - a cut. It could lead to a total Monopoly in a field where the governments of the world are flailing around, trying to catch up.
And that's not all......we all remember this....
Facebook are no exactly the best when i comes to the protection of your data! I mean, sure, they say they have cleaned up their act but do you want to rush out there and complete a KYC process with them if needed? I sure don't.
I'm not saying it will be all bad, there might be some positive influx of people who actually want to learn and trade coins in the cryptocurrency space but i just worry about at what cost?