January 1, 1970

Will Facebook’s New Cryptocurrency usurp Bitcoin’s Place on the Throne?

January 1, 1970

Will Facebook’s New Cryptocurrency usurp Bitcoin’s Place on the Throne?

Will Facebook’s New Cryptocurrency usurp Bitcoin’s Place on the Throne?

Will Facebook’s New Cryptocurrency usurp Bitcoin’s Place on the Throne?

Facebook just might be the one to disrupt the crypto market.

Social media titan Facebook recently announced it will finally introduce its very own version of Bitcoin later this year, the Facebook Coin (AKA Coin). The project is still mostly kept under wraps, but we have done some research to bring you up to speed. The altcoin will participate in transactions which will take place on WhatsApp, a child company of Facebook and a widely popular messaging app. Facebook hopes this venture will allow users to send and receive payments in a secure and quick manner.

Now, there is one question on everybody’s mind: Will Coin change the crypto game?

Continue reading the rest of the article below to find out!

What is this Mystery Altcoin?

Over the past year or so, Facebook seems to have created a stablecoin, which is a digital currency that its market price moves in correlation to the US dollar or a basket of major currencies in order to rein in its otherwise volatile nature. The parent company’s control over this Bitcoin and US dollar hybrid has yet to be determined. Members of the fintech community are also curious to see how Facebook will manage with the different technological obstacles and the regulatory related troubles that are usually inflicted on cryptocurrencies.

How is Coin any different from Bitcoin?

First, while Bitcoin has approximately 23 million wallet addresses and Ether has around 60 million addresses, but a single coin holder could use several addresses. If all goes according to plan, Facebook will integrate its popular trio of messaging services, which consists of WhatsApp, Messenger, and Instagram Direct, where the company could reach about 2.7 billion potential users. Even it will get 5 percent of its users to hop on the crypto train, Facebook’s new cryptocurrency will still be able to have more users than Bitcoin and Ether combined.

The other major difference which we have mentioned earlier is its ties to fiat currencies like the US dollar, euro, and GBP. Most, if not all, cryptocurrencies are not directly or indirectly affected by real world events, which contributes to their high level of volatility. Their market value is more likely to move if they face regulatory changes such as being banned from a certain country. This event had repeated itself in several countries like Saudi Arabia, Bolivia, Ecuador, and Egypt to name a few.

Coin and Bitcoin will also behave in a similar manner, on the other hand. Coin will stay in digital form much like Bitcoin, and will offer its owners the ability to enjoy blockchain technology. This will further translate into the clients gaining access to the highest level of security and privacy measures when paying sellers online available on the market. Facebook’s Coin will offer reduced transaction fees, faster processing times, reliability, and efficiency, just a few attributes digital coins hold over fiat currencies.

Why does Facebook need a Cryptocurrency?

There are numerous reasons why any company would consider developing a cryptocurrency, but we will be focusing on two. We will start with the most basic one: revenue. Facebook’s very own stablecoin is expected to bring the company a revenue boost by diversifying its sources. At the moment, most of its revenue comes from ads, but Facebook intends on charging users a commission fee for send or receiving payments with the new altcoin.

Facebook, however, is not just after the money with this new business venture. The social media king has set itself the goal of becoming a payment solution provider in its own right. For that to happen, Facebook will need to have customers who hold onto this virtual currency on an eWallet within the actual website and spend it there, as well. Face is likely to follow in WeChat’s footsteps.

The latter is a household name in China which serves as an odd combination of Mastercard, Facebook, WhatsApp, Venmo, and a bunch of other platforms. The multi-option crossover app works online and in real stores across the country, replacing cash, checks, and credit cards all at once. Facebook’s model, however, will try to copy WeChat’s business model for a much larger audience.

The Bottom Line

If Facebook will play its cards right, it could create an altcoin that is both stable and a good store of value. With popular demand among sellers and buyers alike and being able to successfully handle regulation, Coin could become a reliable, commonly used digital currency due to its reach.

Facebook’s Coin has the potential to disrupt the crypto market, bringing new blood to a market which has lost its luster in the eyes of some traders. Perhaps, Facebook’s move will encourage other household names to follow suit. Stock traders are also feeling hopeful, as the launch and potential success of the new crypto asset could mean a boost for Facebook’s market value, as well.

If you’d like to learn how you can take advantage of this opportunity, open your live trading account now or contact your market analyst ASAP!

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