At least at this stage, the Facebook Coin model looks more like a loyalty point system.
Saying that Facebook is going to pay attention to user privacy, everyone laughs, and you must have forgotten the "Cambridge Analysis" scandal.
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Facebook hasn't been friendly with user data before, and it's an inappropriate metaphor. They either throw your data in the city square or throw it in your living room.
On Thursday (May 2), The Wall Street Journal reported on some new details of the Facebook cryptocurrency program, revealing that they are seeking dozens of business partners, including online merchants and financial companies, to expand "Facebook. Coin's market coverage. In addition, Facebook's potential partners are also required to join an investment fund worth $1 billion (or more). The fund's main role is to provide endorsement support for Facebook Coin to avoid speculation similar to bitcoin and other cryptocurrencies. Price fluctuations. In addition, according to the Wall Street Journal, partners joining the Facebook Coin cryptocurrency program will also need to offer merchants a lower transaction rate than credit cards.
In the short term, Facebook may not immediately make money from the payment business, but it seems that Facebook does not care about this “small money”. The main purpose of their cryptocurrency is to let you spend more time “sticking”. On Facebook.
Mark Zuckerberg is not talking about the blockchain, but talking about "money"
Today's Facebook has focused on channel construction. If everything goes well, its platform business success is a matter of course. At the recent F8 Developers Conference, Mark Zuckerberg did not mention the word "blockchain" too much, but instead emphasized that Facebook plans to reorganize users' network relationships so that they can be on the Facebook platform. Get a more intimate experience, and Zuckerberg’s most mentioned word is “money”.
Mark Zuckerberg said:
“I think that when you send money to someone else, it should be as easy as sending a photo. The core feature of Facebook's privacy-oriented vision will be – simple and secure payment.”
Mark Zuckerberg’s current idea is clearly beyond the peer-to-peer payment service offered by Venmo and Facebook Messenger, so he urgently needs a series of “business reforms” on Facebook, including: getting Instagram Digital Mall to better checkout and exchange expressions. And make it easier for small and medium-sized businesses to post products on WhatsApp to help them complete transactions through instant messaging applications.
In fact, you'll find that WhatsApp is more like a Facebook business focus than a cryptocurrency – at least for now.
At the latest F8 Developer Conference, Facebook revealed that WhatsApp Pay has begun trials in the Indian market and may extend the service to other countries' markets by the end of the year – for now, this platform is not Based on blockchain, it is specifically designed for peer-to-peer payments. However, it should be noted that since 80% of SMEs in India are using WhatsApp to sell their products, the platform's payment method upgrade is also a natural evolution. After all, cryptocurrency is one of the best solutions for cross-border payment. . In December last year, Bloomberg reported that Facebook's first cryptocurrency test may have occurred in India, because Facebook Coin was originally designed to help Indian overseas workers send money home.
Is Facebook Coin a point?
Another key point mentioned in the Wall Street Journal report is that Facebook may integrate their cryptocurrencies into their lucrative advertising ecosystem, but Facebook revealed that the plan may need to be discussed further internally. If it's true as described in the story, Facebook Coin may have two effects on the Facebook advertising ecosystem:
First, merchants can use Facebook Coin to pay for advertising;
Second, users can get Facebook Coin token rewards if they view ads or interact with ads.
Of course, this model is not new, such as the Brave browser has introduced a similar feature, users can click on the ad in the browser to get token compensation. For users, Facebook Coin may make them realize for the first time that they can make money by “following” rather than just being a money-making tool for the Internet giant. For Facebook, cryptocurrencies allow them to enhance the privacy concept in their advertising business, and they also bundle Facebook Coin and its users on the Facebook platform.
But the question is, if Facebook Coin is used in Facebook ads or other ecosystems, is it really a cryptocurrency?
Professor Joshua Gans of the University of Toronto said:
“I think what Facebook is doing now is to increase the interaction between users and their platforms.”
Providing remittance services to businesses is a real challenge compared to mutual transfers between friends and family, as companies are likely to sell their Facebook Coin at the end of the month’s financial settlement/liquidation and convert it into legal tender.
Joshua Gans believes that if Facebook pays for the users who watch the ads, then the cryptocurrency system becomes very complicated. On the one hand, assuming that the user clicks on the ad and gets a discount on the product in this way, is the discount returned to the user by Facebook Coin, or is it provided directly by the merchant at the time of the commodity transaction? On the other hand, if merchants use Facebook Coin to pay for advertising and services, does it mean that Facebook Coin can't flow out of the system, just circulating in a closed loop?
As the Wall Street Journal pointed out, at least at this stage, the Facebook Coin model looks more like a loyalty point system – people can use this token to get services on Facebook or spend it on the Facebook system. Or redeem merchandise through a partner merchant. In this regard, there are actually precedents in the technology industry. For example, Uber's previous "Uber Cash" is to motivate users to make purchases inside and outside the Uber APP through funds in specific applications; and Apple's "Apple Card" ", the purpose is similar, but Apple realized that this is just a service that allows users to buy more Apple apps and products, but not to subvert the credit card industry.
Facebook Coin has many challenges
A Facebook spokesperson recently responded to some of the topics on the market and said:
“Like many other companies, Facebook is exploring ways to leverage blockchain technology, and we now have a new small team exploring the different applications of blockchain technology.”
It is undeniable that in the field of cryptocurrencies, Facebook still faces many challenges, including:
1. How is the Facebook Coin cryptocurrency system supervised;
2. Privacy concerns of users;
3. How to determine the business process of currency inflow and outflow;
4. How to trade with other cryptocurrencies – this operation is usually handled by the exchange;
5. If Facebook Coin uses the “a basket of currencies” model to anchor in order to avoid volatility, how to deal with the impact of fiat currencies in the global economic system, the system is mainly based on the euro, the yen and the dollar. And Facebook Coin is not likely to be stable with every currency in the world. This is not the way the world works. Therefore, it is necessary to seek the help of financial partners to make the transactions inside and outside the Facebook system smoother.
So far, we don't know how Facebook Coin will work in practice. Is it a point? Still a real cryptocurrency? The answer may only be revealed at the last minute, after all, Facebook does not always play cards.
This article from Wired, the original author: Gregory Barber
Odaily Planet Daily Translator | Moni
This article is translated from https://www.wired.com/story/facebooks-cryptocurrency-might-work-like-loyalty-points/. Please indicate the source if you reprint.