Facebook is finally admitting that they are pursuing the implementation of a digital currency called "GlobalCoin".
If you are familiar with Facebook (you have heard of Facebook, right?), You probably know that they are not the most reputable when it comes to Facebook. protecting the user's privacy. Still, you may be thinking that it is great that they are dipping their fingers in the volatile ocean of the cryptocurrency.
Except that when Facebook dips its fingers into something like cryptography, it's very likely that everything will be lost point of cryptocurrency in your search to monetize everything.
And if Facebook is the entry point for new cryptography users around the world, many casual users run the risk of losing the point.
There is no doubt, a cryptocurrency backed by Facebook that makes sending money "so easy … like sending a picture" would be enormously popular. But the important question is, will GlobalCoin really be a good cryptocurrency?
Probably not. In the features below, I am talking specifically about the concepts that make up the type of cryptocurrency that many in the industry would consider ideal: there are some that do not share these characteristics and still have a use in the real world.
Crypto is Borderless
A true cryptocurrency must consist of a few key attributes to be considered, well … well. If it lacks these key features, it is really just a digital version of the same old money that we have been using for centuries. Maybe.
First, a good cryptocurrency must be without Borders. It must work anywhere, whether you send it to your neighbor next door, or to someone in a country that is otherwise highly inaccessible, perhaps due to sanctions, such as Iran or Venezuela.
Facebook plans to deploy GlobalCoin in selected regions that have met certain expectations of regulatory compliance, probably involving the exchange of personal information with several future powers. The currency will initially be available in a dozen countries to be processed through WhatsApp, and could have difficulties to find approval in places like India and China.
It seems highly unlikely that it will be marketed Between Places like Venezuela and the United States, for example.
Crypto is without permission
Which brings the second key feature of a good cryptocurrency. Needs to be without permission.
Nobody needs to enter a bank and sign a stack of papers to be granted the privilege of sending Bitcoin, Litecoin or Ethereum to another person, for example. Any person, anywhere, can send or receive a good cryptocurrency, as long as there are available nodes with which to connect and declare a transaction.
With Facebook's GlobalCoin, it is likely that a series of permits will only be granted once certain requirements are met, which is more important, being one's nationality, but also possibly other requirements, including the exchange of personal data (which, let's be honest, it seems probable).
Some countries may also restrict who can transmit value using the currency. The users would be at the mercy of Facebook and any regulatory norm in force in a certain region.
Crypto is confident
Speaking of being at the mercy of Facebook, good cryptocurrencies should be Without hope, that is, one must be able to verify the validity of transactions without having to trust any other party, such as Facebook, for example.
Surely, Facebook will keep a close watch, very closely, on all the monetary operations of this GlobalCoin, and will have to decide how and when it will be issued and processed. As far as we know, it is planned to be a kind of stable, stuck to a basket of fiat currencies like the euro, the yen and the dollar. The way in which this is determined is unknown and, once again, it depends on the people of Facebook to find out, which requires another layer of confidence in the corporate entity to wisely design the protocol of the currency.
Crypto is decentralized
What makes highlight the most important attribute of a truly good cryptocurrency, a feature that GlobalCoin will surely lack: decentralization.
This digital currency will be the most central of centralized currencies (but at least we can stop complaining about XRP!) With Facebook running the program; Lock, cylinder head and barrel.
There will not be a decentralized network of nodes that, through the free market gambling mechanisms, confirm the validity of the transactions. No hashing power competition will guarantee the security and integrity of this chain of blocks. This will be an operation 100% authorized by Facebook, from start to finish, fully integrated into WhatsApp, to obtain maximum profitability.
If Facebook decides to turn it off, for whatever reason, boom, it's down. If Facebook decides that a particular user can no longer use GlobalCoin – poof – gone. If Facebook has some kind of technical problem that causes your system to freeze, it will freeze for everyone. These are just some of the problems caused by centralization.
Facebook has no incentive to create a good crypto
What really stinks of the whole situation is that this GlobalCoin will probably be very popular and will make many believe that they have taken advantage of the freedom and independence of the cryptocurrency as a revolutionary technology, without any of the key features that make it special.
"Bitcoin is great, but this is better, it's on Facebook!
The real revolution will take place silently in other places, as good cryptocurrencies continue to grow and spread, perhaps in a more organic and slow way, but with a genuine purpose.
The danger is that this subtle and unique revolution can be stifled by the marketing power of Facebook, with most people simply losing the point … and buying GlobalCoin instead.
Facebook will have your updates, your photos, your face, your friends, your habits … and now your money.
Time for #DeleteGlobalCoin?