The social media giant Facebook made waves last week with the announcement of its in-house cryptocurrency called Libra. Intended as an internal payment system for users of the social media giant, Libra is likely the first of the major corporate cryptocurrencies.
However, while Facebook may be the first to issue a digital payment system, it likely won’t be the last, according to some early adopters. Notably, Cameron Winklevoss, co-founder of Gemini exchange, suggested that the FAANG companies (Facebook, Apple, Amazon, Netflix, and Google) will begin adding coins over the next year or two.
Prediction: ever FAANG company will have its own coin within 24 months.
— Cameron Winklevoss (@cameron) June 17, 2019
Will Facebook Libra Reign King?
The tweet reflects a greater growing awareness among technology corporations of blockchain technology, the foundation of Bitcoin. The simplicity, security, and speed of blockchain-based payment systems have made digital assets something of an internet sensation.
Facebook founder Mark Zuckerberg believes that digital assets like Libra and payment systems within the platform are the way of the future. The company believes that cryptocurrencies offer a new revenue source, and analysts seem to agree. For example, the RBC Capital Markets analyst team had this to say:
“We believe this may prove to be one of the most important initiatives in the history of the company to unlock new engagement and revenue streams.”
Explosive Industry, Centralized Concerns
The suggestion that such corporate digital assets would proliferate in the coming months is not far-fetched. Most technology firms, including the FAANG companies, seek to lead the industry with new releases. But when beaten to the punch in the past, they have been known to follow rather than lead.
As the industry adopts cryptocurrency and digital payment methods, many cryptocurrency faithful believe Bitcoin will continue to garner followers. While FAANG offers may hold appeal, they still have the same weaknesses that have lead many out of legacy systems into decentralized choices.
Bitcoin offers a non-corporate solution to the problems facing the digital payment world. While corporate digital assets may represent a small step forward, they are still ultimately linked to profits. In other words, they are not primarily about the end user, so much as the host company’s bottom line.
Libra will likely be the first among many corporate digital offerings, as Cameron Winklevoss predicts. But if Libra and other corporate offerings are to survive, let alone thrive, they must reconsider their value proposition.
Decentralization is what makes cryptocurrencies like Bitcoin sustainable. Centralized corporate knock-offs hold little of the appeal of true cryptocurrencies.
Do you think LIBRA will give Bitcoin a run for its money? Is it too little, too late for Facebook and the rest of the FAANG companies? Let us know your thoughts in the comments below!