Why Facebook’s Foray into Crypto Could be Fruitless
Mainstream media was abuzz last week with the news that Facebook has plans to launch its own digital token, ‘GlobalCoin’. This highlights the ignorance that big news outlets have, as Facebook really is ill-suited to have anything close to what we consider cryptocurrency.
Cryptocurrency by nature is a mathematically secure, disruptive peer to peer technology designed to act as a decentralized form of finance. Facebook is a million miles away from these concepts as it is highly centralized, highly censored, highly insecure, and largely untrusted. Any currency the social media monopoly produces of its own are likely to have the same traits.
Recent research suggests that the Facebook user base is shifting demographically. The latest report by research firm Diar implies that Facebook’s foray into crypto could be fruitless. Quoting figures from Pew Research Center Diar added,
Facebook will be facing an uphill battle on multiple fronts, primarily starting from an aging user base whose knowledge of cryptocurrency likely to be near nil.
The platform has lost its dominance in the US teen market as numbers dwindle in favour of alternative social media outlets such as YouTube and Snapchat. Teens the do use it are unlikely to be in the financial position to be loading up on Facebook stablecoins either.
The report adds that the number of retirees that have flocked to Facebook has doubled since 2012. There are very few in that category that even know what cryptocurrency is, let alone tech savvy enough to be able to use it as Diar points out;
Educating 25% of the world’s population about current cryptocurrency infrastructure that requires private-key management and the glaring reminder of the possible ultimate loss of funds is also unlikely as it would result in the project’s near instant failure.
GlobalCoin: Escalating Worries
Some big name news outlets have compared GlobalCoin to Bitcoin claiming that to could possibly be a competitor. The two could not be more different, Bitcoin transactions cannot be stopped as the blockchain is immutable by design. Facebook, like Paypal, will have full and total control over any funds deposited and converted into its new coin.
Considering its reputation with safeguarding personal data it would be pertinent to say that Facebook is not in the position to handle large scale finance. Diar picked up on this also adding;
The ownership of data by corporates using it to profit is just one of the anathemas to the decentralized ideology.
Over the past year or two Facebook has been embroiled in scandals involving major data privacy violations, security breaches, censorship, and fake news dissemination. How many people of sane mind are likely to trust it with their hard earned?
Would you use a crypto coin owned by Facebook? Add your comments below.
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