“The Social Media Giant Is Set to Introduce Its Own Cryptocurrency That Could Change the Way the World Transacts.
If the widely accepted and stable US dollar and the revolutionary but volatile Bitcoin gave birth to a new currency, it would most likely be the one Facebook plans to introduce later this year.
The details on this secret cryptocurrency project are still scarce but here’s what we know: the digital currency will be a stable coin and will be first made available for foreign remittances on WhatsApp. We do not yet know how much control Facebook is going to have over this currency and how does it plan on overcoming the regulatory and technological hurdles. We also do not have an official name so I will refer to it as “Coin” for simplicity.
How is Coin different from Bitcoin and other cryptocurrencies?
Let’s start with reach. Bitcoin currently has 23 million distinct wallet addresses and Ether has 60 million, but a single user usually has multiple addresses. With Facebook’s plan to integrate its three messaging services — Messenger, WhatsApp and Instagram Direct — the potential reach of 2.7 billion users dwarfs the competitors. Even if Facebook manages to get 5 percent (135 million) of its users on-board, it will be far greater than all cryptocurrencies’ combined.”
Read the full article by author Sarvesh Mathi here.
This is a very interesting article. Less for the Facebook specifics, but for the explanation of how a stable coin works. The gist: you can peg a coin to a fiat asset such as the dollar. One coin will then always cost one dollar. But that can not be guaranteed since coins are traded in public and are subject to what people are willing to pay for. If demand rises, then the price will go up. The owner – Facebook here – has to dynamically create new coins to balance demand. This is the same principle as Tender currencies will apply. With one big difference: Facebook is always in control, either a benevolent or malevolent dictator but always a dictator. With Tender control of emissions is spread to all application owners who participate in the Tender economy. The broader the economy, the more shoulders control rests upon. This will make Tender much more democratic than any Facebook coin.