June 26, 2019
Blockchain Technology Adoption: In the last few days, there has been lots of buzz in the cryptocurrency industry. Facebook in June has unveiled its plan to enter into the world of blockchain based cryptocurrency with a new coin termed Libra. This bold announcement by the social media giant had the world grappling with the news. Everybody was trying to make sense of what the Libra could be and how it could compete with bitcoin and what how Facebook is looking to monetize from it.
When Facebook announced Libra, they said that it would let users send money and buy things with Libra. Their caliber wallet or other third party wallets will enable this type of transaction. Libra is touted to be a stable coin due for launch in 2020.
What does this Libra do to Bitcoin and all other coins that have been in existence for a while? Bitcoin has dominated the world of decentralizing cryptocurrency, and all the altcoins have been competing for their presence in the Cryptocurrency space. However, the biggest drawback has been the way liquidity and fluctuations in the price of the coins and the swings that are unpredictable that throughs purchasers balance off the ground. Also, the acceptance of cryptocurrencies in the general transaction of buying and selling hasn’t been welcomed as a norm yet. So how does Facebook plan to topple the market and gain its presence in this crowded and already growing unstable market? On top it there has always been privacy concerns
For one, Facebook has already built a massive network of active users through its different apps. It is easy for it to tap into this existing user bases. By integrating wallet into its messenger and WhatsApp applications, it can allow its current users to transact using Libra. In the long term, it could also enable to use the coins on its marketplace and sell through its other app. Facebook’s main stream of revenue is through add; however, currently, Facebook is not targeting revenue through ads with Libra. Instead, they allow transactions on the platform, which can eventually lead to ad revenue. When it decides to do, it has the existing relationship with the advertisers and small business and users that it can leverage.
Facebook has done a few unique things with Libra. Facebook is not the single entity governing the body of Libra; it has enlisted a list of founding members (invested this project). Secondly, Libra will be an open source project with a new programming language. Facebook also is not looking to monetize using Libra and drain money in the name of transaction fees. The transaction fee is going to be low or none.
Although Libra looks promising, there are still some unanswered questions. The circulation of Libra is vaguely defined, Facebook advertisers that Libra will allow users to transact to buy and spend using Libra currency without using the banks, however, the question is where the users will get the Libra coin. Another critical concern domain will be the privacy of the data. FB already has traveled in the wrong road on data privacy. With the invent of Libra, FB will have to answer how they are going to keep the privacy issues in its platform from cropping into this one. These are some of the problems they will need to keep addressing for a large scale adoption of this in the future
Facebook looked poised to capture the blockchain space, but they have to address some of the critical issues and make it easier for users to adopt, and then it could be a game changer. Blockchain Technology adoption could become mainstream with Facebook entry.
P.S