Facebook coin is Facebook’s stablecoin. The social media giant has named the project as Libra. The stablecoin is pegged to several different currencies, including securities. This means that its price won’t fluctuate like that of Bitcoin and it won’t either be tied exclusively to the dollar. Facebook handpicked a team 50 of engineers to work on the Libra project.
It is anticipated that Facebook coin will be listed on virtual currency exchanges, which will serve as a gateway for people to purchase, sell, and trade the coin. The coin will at least be partially decentralized with pre-selected nodes entitled to validate the transaction. However, Facebook has partnered with crypto exchanges and other financial institutions like MasterCard and Visa.
How will Facebook coin work?
Mark Zuckerberg, Facebook’s founder, announced in a blog post titled a ‘Privacy-Focused Vision for Social Networking” that he intends to move the internet towards secure, private encrypted conversations. Adding that he thinks “Bitcoin was also envisioned as a private, secure, encrypted money.”
Today Facebook is like a digital town square, but with the new focus, you can have private conversations with family and friends without worrying about your online comments to come back and haunt you later. The founder of Facebook added that Facebook users should be able to have private conversations without the fear of being spied on by criminals, hackers, or the government.
The new type of Facebook payment system will be private, encrypted, and secure. If it’s done correctly, Facebook will become a global player in financial services and the world economy.
To bring in a clear picture, let’s compare Facebook coin with other global payment methods.
Facebook vs. Tencent
China is at the forefront when it comes to mobile payments. The United States has Apple Pay, square, Google pay, PayPal, and other payment systems. China, on the other hand, has two payment methods; WeChat Pay and Alipay. The two have emerged as the Visa and MasterCard of the Chinese payment sector.
Tencent owns WeChat Pay and backed by WeChat, China’s popular social media platform. Just like Facebook, WeChat has a vast network of publishers and brands who host their pages on the platform, and WeChat Pay has made it easier for them to accept payment.
With WeChat, you can easily buy from restaurants and retailers by scanning a QR code. Libra pay will be quite different from WeChat Pay since it runs on its own decentralized blockchain platform.
As such, Libra Pay will be more secure, encrypted, and private since it does not run through traditional payment methods such as Visa and MasterCard.
Facebook vs. Credit cards
Paying online with credit cards is difficult as every site requires you to re-enter your credit card details, you are required to update the credit card when it expires, manually check the three-digit code and pay interest if you carry a balance.
Facebook coin, on the other hand, will be a massive improvement over credit card payments as you will attach it to your bank account, transfer your fiat currency into Libra, then make the payment. The recipient can immediately transfer back into dollars or leave it in Libra.
Facebook vs. Cash
China is almost a cashless society, AliPay and WeChat Pay are widely used, and the Chinese government had to remind merchants to accept cash still. In this digital era, people seem to avoid paper money. Paper money is dangerous, for instance, you can be robbed, and it’s also inconvenient. Libra could replace paper money as AliPay and WeChat Pay have replaced paper money in China.
How to invest in Facebook coin
Details have not been confirmed yet, but Facebook will likely use the new currency to enable payments from within its platform. Investors will be able to invest in Facebook coin by trading and buying it on digital exchanges. Crypto is about people and the more people who use it, the more valuable it becomes. Facebook is one of the most valuable networks in the world, which is an advantage.
Libra is envisioned as a stablecoin, and its value would likely flow into Facebook’s stock price. In that, every dollar you invest in Libra, consider a dollar in FB stock.
If Facebook coin takes off, other tech companies like Google, Apple, and Twitter may follow suit with their own digital currencies.
Blockchain is about people, and with Facebook focusing to connect people, this is the perfect opportunity to become a blockchain leader. Additionally, there will be lots of opportunities for Facebook coin, such as trading against other global currencies and stablecoins.
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