When Facebook announced its grand cryptocurrency idea on Tuesday, the rebellious nature of crypto-coins — decentralized, anonymous, not backed by a government — was decidedly missing. Facebook has a highly sophisticated way of identifying users, said its currency would be backed by real money, and “Libra” seems anything but libertarian.
The currency does, however, open up tremendous opportunity for the social media giant: Sellers will be many clicks closer to buyers than before using Facebook-bucks. Users won’t ever have to leave the platform, as the currency will continue to close the loop on Facebook’s eco-system, and Facebook will gain both data and potential transaction fees from this new creation.
You can read Facebook’s views on this issue by downloading the Libra White Paper.
Avivah Litan, a Gartner analyst who specializes in Blockchain applications, had this to say about Facebook’s new product:
“It does go against the ethos of no central authority, non-sovereign currency. It replaces central authority with Calibra Network authority .. for now until they become a public network as they say they plan to,” Litan said.
More ad revenue
“What benefits does a cryptocurrency provide to Facebook? “More ad revenue since there will be more conversion of consumers who view ads to buyers – as it will be easier for them to buy the goods/services without having to type in their credit card as they have to do on most mobile interfaces.
“Promises that they will protect consumer privacy/data unless consumers opt in to share it (and consumers will likely NOT OPT IN so now they appear consumer privacy friendly while they are gathering the most useful information out there for advertisers…)
“A more attractive e-commerce marketplace that gains sellers and buyers in growing economies without access to e-money services for transactions. Essentially cryptocurrency available through the Facebook wallet opens the marketplace up to sellers and buyers in growing economies who don’t necessarily have active or any bank accounts. ”