The New York Times Is Wrong About Bitcoin and Facebook

According to the New York Times, the answer is in the affirmative — but they are wrong because Bitcoin (BTC) has not failed. Bitcoin’s adoption appears to be increasing with new use cases — such as the Lightning Network and sidechains— emerging. Furthermore, the altcoins expected from Telegram and Facebook are designed for distinctly different purposes than Bitcoin. Lastly, they are centralized in ways that Bitcoin is not.  

What Is Facebook Up To?

Very little is known about the cryptocurrency being developed by Facebook. The New York Times alleges that those close to the project have signed confidentiality agreements which prohibited their identity from being revealed. Up to five people close to the project were supposedly interviewed. These anonymous witnesses supposedly reported that:

• Over 50 engineers are developing the yet-unnamed Facebook cryptocurrency.
• The cryptocurrency will first be released on WhatsApp — a messaging app owned by Facebook — where users should be able to send and receive it.
• The cryptocurrency is expected to be integrated into other apps owned by Facebook, including Messenger and Instagram, over a period of around a year.

2.7 billion people supposedly use WhatsApp, Messenger, and Instagram.

Why The New York Times is Wrong

The New York Times alleges that the cryptocurrencies being developed by Facebook and other companies will introduce “mainstream consumers to the alternative world of digital coins.” This may be true, but this was never the purpose of Bitcoin. Bitcoin was developed as a decentralized peer-to-peer electronic cash system. Using the coin, individuals are transfer value between each other without banks, corporations, or governments getting involved.

Facebook's new digital token is far enough along that they are talking to cryptocurrency exchanges about listing it, we heard. The current plan is for each coin to be pegged to a basket of foreign currencies, to keep the value stable. https://t.co/liup4kwoi8

— Nathaniel Popper (@nathanielpopper) February 28, 2019

Furthermore, the involvement of Facebook seems to violate these principles of decentralization. Facebook is a company which displays centralized ownership and authority over the products it develops — like Instagram, Messenger, and WhatsApp. [bctt tweet=”The cryptocurrency produced by Facebook is likely to be centralized in multiple ways.” username=”beincrypto”] The cryptocurrency produced by Facebook is likely to be similarly centralized. It is not known whether or not the blockchain of this coin will be public but, given the secrecy of the project, it seems unlikely. Additionally, it appears that Facebook will be the primary producer and distributor over the cryptocurrency, in addition to being its owner and governor. For these and many other reasons, Facebook will never be able to succeed where Bitcoin has failed. In a battle between Bitcoin (BTC) and Facebook, which do you support? Let us know your thoughts in the comments below!