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Major companies such as Visa and PayPal would be willing to pay millions of dollars for the privilege of managing a node on Facebook's cryptocurrency network.
Facebook's incursion into crypto has provoked mixed reactions. Some welcome it as the next step in the global financial revolution, while others have expressed concern about society's dark history of security, privacy and data abuse.
Nevertheless, the US giants of technology and finance clearly want some of the encrypted Facebook pie. According to the Wall Street newspapera number of financial and e-commerce companies, venture capital companies and telecommunications companies have already committed to support the new project.
Big names want to participate in GlobalCoin
The report adds that more than a dozen companies, including Mastercard Inc., Visa Inc., PayPal Holdings Inc., Stripe Inc., Booking.com and Uber Technologies Inc., have formed a consortium and have agreed to pay USD 10 million each to secure the governance of the new Crypto Coin
Last month, it was announced that the social media giant was hiring funders and was aiming to raise $ 1 billion for the cryptography project.
The currency called "Balance" or "Global Coin" should be officially announced next week. The fixed currency will be pegged to a basket of currencies issued by governments – similar to the IMF's SDR currency basket – to avoid the volatility of cryptocurrencies.
The report was not very complimentary of Bitcoin indicating,
Bitcoin was born ten years ago already, but consumers hardly use it – or among hundreds of other crypto-currencies – to pay for their purchases. Facebook is betting that this can change that with a cryptographic-based payment system built around its giant social network and its billions of users.
The usual regulatory concerns were raised as governments worried about the potential for money laundering. According to the WSJ, Facebook will not control exactly the new piece, any more than the individual members of the consortium, known as the Libra Association.
Quoting people familiar with the situation, he added that some could serve as nodes for validation of chain transactions.
Facebook is still the direct developer of this highly protected technology and its influence on the piece is therefore probably as strong as on the data of the social media platform. Just like Google, Facebook uses an extremely secretive algorithm that determines what users can and can not see in their news feed.
Facebook coin will boost bitcoin
Morgan Creek Digital's co-founder and partner, Anthony Pomp, Pompliano, said the move was particularly optimistic for the adoption of Bitcoin, with two of the donors being Visa and Mastercard.
Facebook has secured Visa and MasterCard as two of the contributors to their new cryptocurrency.
Very positive signs for the future adoption of Bitcoin ?
– Pomp (@APompliano) June 13, 2019
Participation in the Libra project allows companies such as PayPal, Visa and Mastercard to exercise some control over the new "cryptocurrency" and its centralized governance. This makes the new coin unlike Bitcoin which is an open access cryptocurrency that allows anyone to download the software and run a node.
As a result, Facebook Coin is unlikely to pose a real threat to the future of decentralized peer-to-peer financing. Instead, it already looks more like a competitor of banks or even Starbucks Rewards than P2P's "digital gold".
Will Facebook cryptography be a threat to Bitcoin? Add your thoughts below.
Pictures via Shutterstock
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