3 Reasons Why Facebook’s Cryptocurrency Should Never Launch
Given Facebook's history with privacy, such a cryptocurrency can spell doom
Since last few days, tech and, especially the crypto world has been abuzz with news about Facebook’s own cryptocurrency. Allegedly named as Facecoin, crypto enthusiasts are pretty excited about this development.
Along with Facebook, popular messenger apps such as Line and Signal have also revealed their interest in having their own cryptocurrency.
If we talk about Facebook, and their plan to launch their own cryptocurrency, then we have some reservations. Infact, Facecoin should be never launched.
Here are three reasons why:
Reason #1: Money Laundering Scare
The biggest and the most crucial reason is money laundering.
Facebook’s ambition is to develop a digital currency, which can be used by 2.7 billion users of Whatsapp, Facebook, and Instagram. Atleast 2.7 billion users use either one of these apps in a day, and the plan looks perfect.
However, the issue here is the technology which Facebook is using for their digital currency.
As per former Chief Security Officer of Facebook, Alex Stamos, Facebook’s private and encrypted messaging service combined with an open, Zerocoin-like, zk-SNARK backed cryptocurrency will lead to money laundering on a global level. Unethical businesses will start using Facebook’s crypto platform to evade taxes, and no Govt. will be able to counter that.
Yes, such instances are already happening in the crypto-currency world, but the inclusion of Facebook, the `world’s biggest social network, changes the perspective.
Reason #2: Privacy Scare
And now, the second biggest scare: Privacy.
In case Facebook decides to keep their cryptocurrency platform open, and decided to decrypt their messaging platform, then there arises the risk of privacy. Billions of account information will be out there in the open, and it will be a privacy nightmare.
Hence, both closed and open crypto network spells doom for 2 billion+ Facebook, Whatsapp and Instagram users.
Cryptocurrency isn’t fitting into Facebook’s overall existence.
Reason #3: Facebook’s History With Currencies
And lastly, Facebook own endeavors with currency and/or currency-type projects.
In 2011, Facebook launched Facebook Credits, a virtual currency feature, very much like a cryptocurrency. Within a year, more than 15 million bought Facebook Credits, but the project failed. Brands didn’t trust Facebook, and they failed to come on board. Facebook Credits was best known for its 2-year old experiment, and it was shut down in 2013.
In 2012, Facebook launched Facebook Gifts, another experiment with the currency niche. It was designed to copy Starbucks and iTunes gift card feature, but it failed`. Facebook Gifts was shut down in 2014.
Yes, payments and money exchange is the next step for Facebook, and that has been the reality since last few years, but it seems that a crypto-based P2P network or a payments network isnt the right thing to do, atleast now.