It seems Facebook has bigger cryptocurrency plans that it originally let on. First it was Facebook coin; now, the social media giant says it’s looking into building an entire “cryptocurrency network.”
Facebook and Crypto Have Been in Bed for Some Time
The network is known as “Project Libra,” according to a new report detailing the system. The platform will allow users to pay for various goods and services through Facebook using the digital currency Facebook Coin, which has been in “construction mode” for several months.
At the time of writing, Facebook currently boasts roughly 1.5 billion users. A new study shows that by approximately 2070, many Facebook users probably won’t be around anymore, but until then, entrepreneur and tech executive Mark Zuckerberg is planning to do all he can to exploit both crypto’s and Facebook’s abilities.
Right now, the company says it’s seeking over $1 billion in investments from financial and payment companies such as Visa and Mastercard. It has also contacted the payment processor First Data about garnering potential funds. A spokesperson says:
Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology.
Facebook has also approached several “e-commerce companies” and applications about investing in the platform. It has allegedly proposed “zero card-processing fees” to these businesses to entice them.
One of the big aspects of Facebook Coin, which users will use via the platform, is that it is alleged to be a stable currency. It will be tied to USD so that users will not be subjected to crypto’s typically volatile nature.
One of the big reasons, as we all know, why institutional investors have failed to potentially invest in crypto is because of the price swings that cryptocurrencies are currently prone to. Bitcoin, for example, was trading for over $20,000 in December 2017, but later fell to less than $4,000 a year later. Now, the currency is trading for over $5,000 following some bullish behavior, but there’s still plenty of room for growth.
Many investors fear the idea of potentially losing their money as soon as they invest it. Stable coins are designed to put these fears to rest and give them a chance to place their money into a safer, and thus more “stable” venture.
Facebook is also developing what it’s calling a “virtual checkout” system that will allow users to pay for items with Facebook Coin on other websites. They can use their Facebook credentials to login, meaning they will not be required to come up with new usernames and/or passwords. Lastly, users can also earn units of Facebook Coin by watching ads or engaging with other content.
What Will Facebook Change?
Henry Liu, a former Facebook employee and a managing partner at YGC, claims:
Payments and commerce are Facebook’s only way out from its freemium advertising business model.