Facebook to reveal cryptocurrency this month and sell it from ATMs
Facebook's cryptocurrency has slowly taken form through sporadic rumours, but soon we'll see it in full.
- Facebook will be selling its cryptocurrency from ATM machines.
- The coin will be managed by an independent foundation and a distributed set of nodes.
- The project has been met with scepticism internally.
The secretive Facebook cryptocurrency, which has reportedly been dubbed GlobalCoin internally, has gradually been revealed piece by piece through occasional reports. The latest one comes from The Information, which reports that Facebook will be unveiling its cryptocurrency later this month.
There are plenty of other tantalising details too.
The most revealing new detail may be that Facebook will reportedly be selling its cryptocurrency straight from ATM-style machines, and aggressively marketing it to developing economies that lack stable government currencies. It will be exchangeable to and from regular local fiat currency at these machines, as well as through Facebook apps including Messenger and WhatsApp.
The Information says it will have no transaction fees, and previous reports have said it will be a collateralised stablecoin pegged to a basket of international currencies.
It also indicates that this will be quite true to cryptocurrency form, in that it will be governed by an independent foundation and managed by a range of distributed nodes. Facebook has reportedly been courting third party organisations with the aim of getting them to serve as nodes, although Facebook is also thinking about charging those nodes up to $10 million for the privilege.
This begs the question: what are those nodes getting out of the arrangement? If the Facebook stablecoin is backed by collateral it's unlikely that there will be regular Bitcoin-style emissions for nodes. And if it has no transaction fees, there's nothing for the nodes to skim there either.
Facebook chief operating officer Cheryl Sandberg and Facebook chief financial officer David Wehner have reportedly been sceptical of the project internally.
There are still plenty of questions left unanswered about Facebook's cryptocurrency, but they won't be unanswered for much longer.
Facebook cryptocurrency in summary
To summarise previous reports on Facebook's cryptocurrency:
- What it's called: Internally it's been called by the supervillain-esque name of "GlobalCoin" but Facebook has set up a company called Libra Networks which is focused on blockchain and payments, which may be a more suitable name.
- How much it's worth: It will be a stablecoin pegged to a basket of international currencies.
- How to get it: It will be available through physical ATM machines as well as digitally through various Facebook apps. Facebook has reportedly also been in talks with cryptocurrency exchanges.
- What it's for: It's for spending and storing value.
- How it works: The digital currency will be spearheaded by an organisation separate to Facebook and run by a distributed set of nodes.
But will anyone use it?
Anecdotally most people are leery towards Facebook in general, even leerier towards the idea of a Facebook currency, and completely distrusting of cryptocurrency in general. Surveys have found cold attitudes towards the idea of a Facebook cryptocurrency from the USA.
On paper, the Facebook cryptocurrency is looking like it will be an extraordinarily unpopular product that no one asked for. But as Henry Ford is often quoted, "If I had asked people what they wanted, they would have said faster horses."
If it can solve the problems of slow and expensive money transfers, and unstable local currencies, it might be exactly what people really want, and this is where it's aimed. As The Information said, it will be aggressively marketed in developing countries and places where the local currency is unstable.
We're about to see what happens when a global giant tries to create its own digital currency. It's an entertaining coincidence that its release is happening at almost the exact same time as Kik, the fledgling messaging app, is on the verge of getting thrashed by the SEC for attempting the same.
Whatever happens next will be interesting one way or another.
Disclosure: The author holds BTC, BNB, ATOM, IOTA at the time of writing.