Facebook may be about to create its own crypto-currency. And the company’s goal was nothing less than clashing with traditional companies credit card. According to the Wall Street Journal, Mark Zuckerberg’s firm is trying to raise $ 1 billion of investment from traditional financial institutions.
The amount should serve as the ballast to protect the new currency from the strong price fluctuations. Such fluctuations are commonly seen in competitors such as Bitcoin. With this, it must differentiate itself by being more stable. Since it will probably be sustained by the value of the dollar or other traditional currencies.
Recent news indicates that Facebook is also working on a different crypto-currency. It’s intended for use through WhatsApp. However, that other option would be linked not to currencies to a distinct set of currencies.
The novelty has advantages …
According to the WSJ, the Zuckerberg company wants to position its payment network as a direct rival to companies such as Visa and Mastercard. Theoretically, using a blockchain system would free sellers from the fees they have to pay to accept amounts received on sales made with ordinary credit cards.
Another advantage is the fact that many sites already use the social networking API to allow users to log in. So it would be enough to extend the infrastructure to allow people to use the same credentials to make payments on third-party services.
… but disadvantages too
Facebook is also apparently considering other uses for its crypto-currency in addition to transaction payments. The social network considers rewarding its users with a fraction of the coin every time they see an ad. This the newspaper said would spur more genuine interactions. It will discourage bots and propagators of hate speech. That’s a logic that simply does not seem to make sense. As it highlights the Ars Technica.
The most obvious conclusion of the award-winning initiative would be an increase in the efforts of bot-makers. They would like to increase their counterfeit traffic to receive more exchanges. In addition, the Facebook initiative lacks an important point in the other crypto-currencies. It is essential for its rapid growth and use for innovation. And that is a decentralized, open source framework.
With social networking plans to create a robust payment system, they would have to employ people and systems to protect users from hackers and scammers. In addition, it would be necessary to establish a kind of internal police to prevent money laundering. With all this, the rules and restrictions would likely make the new crypto-currency something much like traditional payment networks. And this will reduce its advantages. It remains to see how Facebook intends to address such issues.