With the Bitcoin soaring high through 2018 and early 2019, Facebook has subtly made its entry into the world of Cryptocurrency. It was revealed some time ago by the New York Times that new cryptocurrency will be emerging in order to give competition to bitcoin for digital peer-to-peer payments developed by Facebook. Mark Zuckerberg has recently made a statement explaining his vision for Facebook which in his opinion has been a secure and trusted digital platform for private messages between users and now will be extending the services of payments too. As of now, The Company has its lips sealed about the details of this venture.
Facebook is aiming to develop a peer to peer network architecture similar to Bitcoin but with trust, cloud, and scale in place of Bitcoin’s distributed and trustless platform. The most targeted audience for this network will be the users of WhatsApp- which Facebook owns, in Asian countries, specifically India to satisfy the requirement of digital domestic payments. Whether the coin will run on the blockchain or not is still unknown, although distributed ledger technologies have been mentioned by Zuckerberg in a bunch of interviews.
The whole FB coin shenanigan is expected to go down the same road as did JP Morgan’s JPM coin. The news of Facebook cryptocurrency has not in any way affected the price of BTC. FB coin is pegged to be similar to JPM coin, an accounting system stable coin- used to move around dollars. This cryptocurrency has nothing over what Bitcoin has to offer, and due to that, experts claim that it can’t even compete with BTC.
Trying to replicate a success story like Bitcoin, the most thriving deployment of public key cryptography in history, is a very difficult task for someone with the reputation of Facebook. While the decentralized peer-to-peer network offers a trust less, open, transparent and extremely secure banking and financial transactions for its users, Facebook‘s ingenuity regarding responsibility for privacy has not gone down well with the public.
The likes of FB coin and JP Morgan’s asset have been proclaimed as ‘Intranets’ by Technologist Phil Chen, whereas Bitcoin is like ‘Internet’ – a system that thrives on freedom for innovation. At best FB Coin can be as good as PayPal or Venmo, workable for small-scale transactions.
Another point of concern is also the “system failure” experienced by centralized systems time and again. Facebook went down on April 13th for a couple of hours along with its platforms Instagram and WhatsApp. This system failure was mostly seen across Asia and Europe with thousands of complaining users. The system had gone down earlier in March as well for more than 24 hours which was explained as a result of the server configuration change. One of the foremost payment solution provider, Visa also experienced a system failure last year where the users were left to fend for themselves with no access to their money.
These incidents highlight the reliability of Bitcoin, and it’s decentralized network design where the network will keep working uninterrupted even in the case of hundreds of Bitcoin nodes going offline. Private keys, controlled by individual users are used for the protection of funds in the Decentralized wallets, hence it takes a lot to attack this network.
With all this skepticism with the new FB Coin already established, it can be said that welcomed or not, the fact that Facebook’s Crypto is rapidly arriving does not change.