How Facebook’s cryptocurrency sets a precedent in the blockchain sector.
I am pretty sure you have all heard the news that Facebook is gonna have its own cryptocurrency by 2020 (or never, considering possible regulatory hurdles, but that is another story ).
I mean, I really wanted to write an article about it, expressing my thoughts on it. But then I opened my laptop and the web was FLOOOOODED with so many of them that I did not even know where to start reading.
Plus, it seems to me each one tackles things from a particular perspective and getting the whole picture is pretty hard.
This article will not be about Libra as such, but rather, about the precedence it sets: for the first time, a company is issuing its own cryptocurrency.
The ICO craze
In 2017 and 2018 we saw the emergence and eventual collapse of the ICO bubble. An insane amount of companies rode the hype waves of the blockchain craze and tried to raise capital for the most different projects.
Eventually, the market started to become saturated, regulators become more regulating and even users slowly became more aware of where they were investing their money.
ICOs were easy to do, unregulated and attracted a great deal of outside interest towards the blockchain sector — whether that’s good or bad it’s up for discussion.
During the last year, the cryptocurrency market experienced a year-long (and still ongoing) bear market, eventually resulting in a reduction of the number of project conducting ICOs (that now became STEs, STOs, TEEs and other weird combinations of letter to defy users) and especially in the amounts of money collected — also due to the establishment of several regulations on the matter, and some of the people behind scams starting to be prosecuted.
It seems like the ICO craze has come to a halt.
The fact that Facebook wants to create its own company-specific (or rather, companiES) has definitely an impact on the market. While many mOoN bOyZ believe this will make everyone rich again and Bitcoin will hit ATH, they completely miss the point.
Then.. What’s the point?
The fact that one of the most debated and central authorities of our era is coming up with its own cryptocurrency, sets a huge precedent.
Up until a few months ago, the way companies saw cryptocurrencies was summed up by definitions of the likes of Warren Buffet or Bill Gates, defining Bitcoin as “worse than rat poison” .
However, and this has to be stated, they always showed their interests in the blockchain — many of them going by the motto “blockchain, not Bitcoin”.
And I mean, they can’t be blamed right? As much as the cryptocurrency community would love to have only decentralized, open, borderless and censorship resistants systems (aka Bitcoin), companies have stakeholders and a bottom line to defend. Also, most of them declared that their main barrier to adoption of blockchain technology are #1 the relatively newness of the technology and #2 the fact that they don’t really understand it.
What Facebook is doing is very very interesting — and this does not depend on whether you are a cyberpunk or a corporate a moon boy or a speculator, because the developments of such experiments in the industry cannot be stopped. It is the natural evolution of a new industry. We are all in for freedom of speech and enterprise. There are different use cases where different systems architecture, incentives and governance systems can be applied.
All kinds of new projects will eventually be developed.
What Facebook is really doing is telling everyone else in the industry that blockchain is interesting and worth exploring.
It is setting up a precedent that will have other companies calling up around and try to set up a blockchain team to understand whether they will also be able to come up with a company-specific coin.
Just some months ago, news were circulating about a JPMorganCoin (yeah, the company ran by the same guy in the picture above).
And this is just the beginning..
Companies will soon realise that — some of them — might benefit from coming up with a company-specific token.
They will probably not resemble cryptocurrencies, as I imagine they will be based on permissioned or consortium systems and probably be more of a stablecoin.
Get ready for the new wave..
I am pretty sure more and more company-specific coins will come up within the next few years..