Facebook VS Regulators: Why Mark Zuckerberg Isn’t a New Crypto Messiah
Okay, this article will be a bit different than other Superorder guides. No trading suggestions, no tips on using our services, no innovative blockchain projects. Today, we’re going to talk about global things. It’s important for all traders/investors who try to develop a better — decentralized — community.
Be ready to dive into the current state of crypto economics, interactions with traditional regulators, and potential changes. As an example, let’s take the latest news. Most likely, you’ve heard that Facebook now allows American users to access Facebook Pay — a new payment solution integrated into native products.
Why does it matter? How it can affect the crypto world? What’s the matter with Libra? Let’s answer together.
Facebook Pay in a Nutshell
According to a recent post on the official Facebook blog and a dedicated site, the company has launched a brand new system called Facebook Pay. Generally, it’s just a money transfer solution integrated into native interfaces. It allows:
- Add credit cards and payment processors.
- Get customer support in real-time.
- Purchase products/services or pay for charity.
- Send and receive money from friends.
- Set up this payment method for all or the chosen apps.
- View payment history and check methods.
Facebook Pay works with different partners like Visa, MasterCard, and PayPal. Users can connect these options and then pay or transfer money using native apps. It looks pretty convenient, especially because Facebook promises top-notch security.
Currently, the solution is available for US citizens only (if you’re the lucky one, enter Settings and connect the preferred payment methods). As well, it works on Facebook and Messenger apps but developers promise to add support of Instagram and WhatsApp later.
Hurdles to Libra
Announced almost half a year ago, the ambitious Zuckerberg’s project may sink. Despite optimistic blog posts from Libra developers, the real state of things is pretty bad. The team claims that they’re actively testing the network, cooperate with Coinbase and Uber, deploy nodes, etc. However, this tech stuff is meaningless without the approval of the US Congress. If Facebook will not be able to launch Libra, all the developments will be obsolete.
Supported by top players, the project becomes less and less attractive to institutional investors. Visa, MasterCard, PayPal, Stripe, eBay, and other partners have left the association already. Yeah, the first three names work with Facebook Pay if you remember. Libra and Facebook can’t convince American regulators that the planned cryptocurrency is safe, anonymous, and non-threatening for the users’ data.
Facebook Revenue Streams
Okay, so we have two facts. The first one: Facebook faces barely surmountable obstacles with the launch of its global cryptocurrency — Libra. And the second one: Facebook has successfully launched its native traditional payment system — Facebook Pay. These facts are connected, undoubtedly.
For instance, let’s look at the revenue from advertising. In 2018, stunning 98% of the total $56 billion earned by Facebook came from ads. Obviously that Mark Zuckerberg focuses on maximizing this revenue. There are a lot of arguments around real Libra goals but we think that it also was designed for higher profits.
Today, we have Facebook Pay. Why it was deployed? Because Libra is stuck and Facebook still wants to get tasty prizes — personal data. In this case, the new payment service is also ad-focused. It helps the company to gather various info about consumers, process it, deliver better ads, and make more money. Everything is legal, what’s more interesting.
Consequences and Disruptions
As a result, we can draw two main conclusions:
- Facebook lives from advertising. As seen on the chart above, the company gets insane revenue from ads. It has thousands and thousands of partners who run campaigns based on the personal information of users (hi, Cambridge Analytica!).
- Facebook can collect sensitive data. Thanks to Facebook Pay, the company can get even more personalized and valuable info. Even representatives admit that the network may show you ads of products you’ve bought using the new service.
Still, it’s only the tip of the iceberg. Officially, representatives say that Facebook Pay and Libra aren’t connected at all. In reality, failures of the latter could lead to the accelerated launch of the former. Moreover, the full power of watchdogs focused on Libra is beneficial for Facebook Pay as it can work without obstacles collecting precious data and generating more income.
The conclusion? It’s pretty simple. Mark Zuckerberg has its own plan. Probably, he wants to help people worldwide with a global crypto system that can beat Bitcoin. But, most likely, he just focuses on Facebook growth. And it’s dangerous.
We understand that you may disagree with these thoughts. So, let’s discuss! Proceed to our Telegram channel, share this article with your friends, and let’s make the crypto world a bit better. It’s possible with real enthusiasts.
