Facebook has recently held discussions with some major crypto exchanges in order to have it’s cryptocurrency enrolled. The rumors started last year following a revealing Bloomberg report.
It divulged that the social media giant was working on a stablecoin and it’s targets were Indian WhatsApp users. A desire to enter the country’s burgeoning remittance market was seen as the main reason behind the movement.
A renowned New York Times reporters Mike Isaac and Nathaniel Popper broke news of the latest development on Thursday. And according to their post, Facebook has been working on a cryptocurrency that they plan to integrate into WhatsApp. The WhatsApp messaging app boasts over 1.5 billion users while Facebook user base exceeds a little above 2 billion. This is according to statistics from Statista. This provides the two platforms an unrivaled and outstanding advantage over mainstream crypto transfer competitors. If the company officially launches it’s crypto project, new demographics will definitely be carved out and uncharted markets will be opened. The New York Times report also discloses that Facebook currently has over 50 engineers working on the “Basketcoin”. Staff working on the project are distinctly situated in a separate section of the company where only members with a key cards are allowed access. This revelation portrays the high level of importance and secrecy surrounding the project. Again, as opposed to a stablecoin, a basketcoin’s value is not pinned to just a fiat currency but vastly connected to an assortment of other related assets. And this has brought about many speculation that Facebook’s coin will have it’s value attached to the US Dollar, the Japanese Yen and the Euro.
One of the major significance that basketcoins and stablecoins have over conventional cryptocurrencies such as Bitcoin is that their value doesn’t fluctuate as wildly. This is an important element that helps manage and relieve price movement fears among consumers.
At the moment, Facebook looks to be targeting the consumer market, which will use cryptocurrencies as a medium of exchange and not just as a store of value. Other than the development of a cryptocurrency, the company has been looking into ways to implementing blockchain into it’s applications.
In a recent video posted some weeks back by CEO Mark Zuckerberg, he mentioned that blockchain technology could potentially provide the company and it’s users greater experience as well as convenience. This is by enabling the latter to store login credentials on the blockchain. Integrating such a feature would allow users to securely log in from different locations without any need to provide their information to a third party. He also spoke about some of the major challenges app developers are facing at the moment and one of those was being forced to use intermediaries such as Apple Store or Google Play Store. In his view, blockchain seems like a possible solution.
OTHER SOCIAL MEDIA DEVELOPING THEIR CRYPTOCURRENCY
Apart from Facebook, other major social networking platforms have recently shown a dire desire to move into the crypto segment and the popular app Telegram is one of them.
Founded by two Russian brothers, Nikolai and Pavel Durov, Telegram has a user base of over 300 million. It has somewhat fascinating similarities like the WhatsApp but has a more robust encryption system. According to a past study published by Global Web Index, Telegram, BBM and WeChat members are very much likely to appreciate a money transfer feature than those on networks like Facebook and Snap chat .
According to the report, about 90% of Telegram users would be elated to see a money transfer integration. And on the other hand, only about 46% of all Facebook users are likely to prefer such a service.
On that note, the much anticipated crypto Telegram Open Network (TON) project is reportedly about 90% complete. This is according to recently leaked documents. The highly secretive project raised an overwhelming $1.7 billion through it’s ICO last year.
The documents highlights that project developers have already contacted major Asian exchanges for a listing once the testnet is live. Other messaging and networking companies that are reportedly building their own coins include Japan’s Line and South Korea’s Kakao.
SOME MAJOR CHALLENGES AHEAD
Due to the decentralized nature of cryptocurrencies, companies looking to launch them will most likely face significant headwinds, most especially in the national regulations. Some jurisdictions, such as Saudi Arabia, have already put a ban on crypto trading. There is also the question of abuse. Many major cryptocurrency platforms have had to deal with a many security issues and hackers on the other hand, have proven relentless in their pursuit to undermine the most stellar of countermeasures. How companies such as Facebook plan to deal with these issues is still very much unknown.
It will be fascinating to see how the duel of social media platforms will finalize in reality. While major social media platforms such as Facebook have significant reach, the notion of cryptocurrencies is still at it’s infancy, especially to the people in developing countries. And convincing this demographic to join in is likely to be another project on it’s own.