Rumors surrounding Facebook and its native cryptocurrency have been swirling for almost a year now. Recently, the project was confirmed to be releasing sometime in the first quarter of 2020. Contrary to some expectations, GlobalCoin seems nothing like Bitcoin (BTC).
Although details are still emerging, we do know that the cryptocurrency will effectively be a stablecoin. GlobalCoin will be used to make transactions and store value directly on the Facebook platform. It will be pegged to multiple major fiat currencies. The social media giant is likely taking more inspiration from PayPal than from Bitcoin in this regard.
Facebook & GlobalCoin
GlobalCoin will have its own blockchain. In fact, Facebook has reportedly hired two compliance officers working with Coinbase. It’s also been confirmed that the platform is working closely with banks to ensure proper fiat backing for GlobalCoin.
The project is, by all accounts, a lovechild between major banks and big tech on a private blockchain. The only reason it can be considered a ‘cryptocurrency’ is due to its reliance on blockchain technology. However, it’s nonetheless tightly controlled by a centralized firm and it’s not part of the decentralized vision that much of the cryptocurrency sector shares.
Blockchain Technology, For All The Wrong Reasons
Companies leveraging private blockchains and creating their own cryptocurrencies was to be expected. Major conglomerates can all too easily create their own systems to automate their already-centralized processes.
GlobalCoin is effectively an attempt to further entrench Facebook’s control over digital commerce. In this way, Facebook is creating GlobalCoin to be PayPal — but with extra steps.
By expanding into the payments sector, Facebook will also have another powerful metric to judge consumer patterns. For a company which has faced persistent controversies, GlobalCoin is Facebook’s alternative revenue stream.
[bctt tweet=”By expanding into the payments sector, Facebook will also have another powerful metric to judge consumer patterns.” username=”beincrypto”]
GlobalCoin Is Not The Answer
If the promise of blockchain technology is to be realized, it won’t come from major tech firms producing their own private systems. Instead, it will come from everyday developers creating decentralized alternatives to compete with big tech.
Just imagine if Facebook announced it was creating a decentralized social media platform. Instead, all we got was GlobalCoin.
Do you believe Facebook’s GlobalCoin is an actual ‘cryptocurrency?’ Let us know your thoughts in the comments below.