Mark Zuckerberg has stirred-up rumors in the ethos of cryptocurrency chatter. Speculations are swirling that Facebook may be poised to introduce their own cryptocurrency. Other questions remain such as the type of tech that would be behind such a coin. Furthermore, how would a Facebookcoin compare to the other social coins already in existence?
While answers remain elusive, we here at Cryptocoinzone can’t help but dive into the gossip head first.
Evidence That Zuckerberg is up to Something
The rumors began on January 4 – in what has now become a Zuckerberg tradition – inside a long Facebook post outlining where his energy will be spent in the upcoming year. Toward the end of the post, he mentions cryptocurrency and the potential they have.
● “Many people now believe technology only centralizes power rather than decentralizes it.”
Zuckerberg is critiquing the same technology and centralized systems that he helped bring to the mainstream. Are we seeing a change of heart from one of the internet’s most powerful people?
● “There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people's hands.”
We see him exclaiming the potential of crypto and more importantly, the benefits of encryption and decentralized systems of exchange. It’s an interesting opinion to have, especially coming from the world’s leader in anti-privacy technology.
● “But they come with the risk of being harder to control. I'm interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”
And in the final sentence, we can see Zuckerberg’s true feelings on the matter. His opinion that there is a “risk” in technology that is harder to control is more in line with the Facebook mantra. From this brief quote, it can be surmised he is looking for ways to implement crypto-technology while maintaining infamous Facebook control.
Why ban Cryptocurrency ads From Facebook?
Facebook just recently banned all ads related to cryptocurrency – for a company obsessed with ad revenue, why would they remove this growing income stream from their business model? Facebook's official statement claims the ban is to end scams that are associated with aggressive marketing. Maybe, but isn’t it more fun to dive a little deeper?
For a company as large as Facebook, blocking all forms of advertisement related to competitive technology would give them the upper-hand in any marketing campaign introducing a new coin. By denying all crypto-related ads, it could help regain the public’s trust in the new technology. After a few months, most users would forget about crypto and the scams associated with it. This opens a window for Facebook to launch their coin, during a time when apprehension of crypto is at an all-time low.
What Kind of Coin Would it be?
Even though Zuckerberg toys with the idea of a decentralized coin, that would never happen, not with Facebook's name on it. Any token created would be generated and simply given out to every Facebook user on the platform. Facebook and its executives would possess the lion’s share – of course. The technology would likely incorporate an inflationary model, with a certain percentage of new coins being generated every year. Perhaps pegged to the number of new users added.
Facebook is concerned with scalability above all else. We speculate the coin would be based on tangle technology or at least a hybrid version of the DAG. Any token created will have the goal of making microtransactions as ubiquitous as the Like-Button.
Other Social Coins Already in Existence
● Reddcoin - Uses a Proof of Stake model for its coin. decentralized and featuring nearly 0 transaction fees, REDDcoin allows for incorporation with social media. Add it to Twitter accounts or reddit (reddcoin, get it?) in order to “tip” content creators and thought-provoking comments. Exchanges for Reddcoin are Bleutrade and Bittrex.
● Steem - Uses both proof of work and proof of stake. Creators are able to earn tokens from the pool where STEEM holders can vote on content with tokens. The theory behind it seeks to prove that valuable content will attract users. Exchanges for Steem are Bittrex, Binance, Poloniex and HitBTC.
● Lbry - Uses proof of work blockchain to host videos. Users can “buy” downloads with LBRY as well as use the tokens to publish videos. LBRY facilitates decentralized torrenting by using blockchain to store content. Think of it like a decentralized Youtube with fast transactions aimed at rewarding content creators - a censor-proof storage solution. Exchanges LBRY are Changelly, Bittrex, Shapeshift and Poloniex.
Facebook Market Domination
Although there is competition in the social media crypto space, Facebook’s entry into the market will bring utter devastation to everyone else. With over 2.2 billion monthly users, the market cap for the coin would obliterate all other social coins, it would even compete with Bitcoin for crypto-dominance.
Would people use it? Yes, not only would a value transacting coin be mass adopted by new crypto users but crypto-fanatics would take full advantage of it, trading FBcoins for other assets. The potential for Facebook to single-handily inflate the entire crypto-market cap has the potential to boost the price of almost every other coin.
Facebook would become a bank. Similar to Paypal, if Facebook rolled out their own currency, they would quickly become the world leader in value-based transactions. Think about paying your friends for drinks, or ordering a pizza, even rent would take place via Facebook. Why wouldn’t it! Combine the ease of use with no transaction fees – the sky’s the limit when you have a 2.2 billion person user base.
Would Facebook Profit From its own Token?
Would launching its own cryptocurrency be a profitable endeavor? That’s the billion dollar question and one that Facebook will have to answer, eventually. Zuckerberg has already made public statements about the possibility of implementing crypto into Facebook’s bottom line. The ban on crypto-ads has spawned theories pointing to it as a sign of the inevitable FBcoin. Would cryptocoins already in existence be able to compete against the social media juggernaut? Facebook offers the cryptoworld a path toward instant mass adoption- but is it worth the risk?
Store you cryptocurrencies safe. Read more about different safe ways to store cryptocurrencies in our blog post, Store cryptocurrencies safe 2018.