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It may sound like a 2014-era shitcoin, but Globalcoin is this yearâs most anticipated new digital asset. It doesnât matter that itâs not decentralized, not permissionless, and not even crypto. The only question that really matters is what does Facebookâs currency spell for bitcoin? Will it steal its thunder or accelerate adoption?
Also read: Traders Are Now Banned From Using Localbitcoins Exchange in Iran
Globalcoin: Coming Soon to a World Near You
If Mark Zuckerberg had hoped to convince the world that heâs a normal guy, and not a shape-shifting Illuminati reptilian, Globalcoin has scuppered that. Itâs the name that satirists would have dubbed Facebookâs forthcoming currency, had Zuck not gone and claimed it for himself. Like Facebook itself, Globalcoin (GC) is easy to mock and easier to meme, but away from the easy one-liners, whatâs known about the coin and what effect â if any â will it have on cryptocurrency?
GC is scheduled to launch in Q1 2020. Lest confirmation were needed as to how entrenched in the legacy financial system Zuck bucks will be, Facebookâs CEO has reportedly met with Bank of England governor Mark Carney as well as seeking advice from the U.S. Treasury. Project Libra, as the program is known, has been one of the worldâs worst kept secrets since 2018, when it emerged that Facebook was seeking to hire blockchain developers for a covert monetary project.
Mining GlobalCoin pic.twitter.com/G4fuSq956f
â cryptograffiti (@cryptograffiti) May 24, 2019
GC will be nothing more than another fiat-pegged stablecoin, which is unremarkable. The coinâs real power comes in the network effects that can be leveraged to get the currency into the hands of billions, including Facebook users who donât have bank accounts. The benefits this could bring to Facebook-loyal consumers, who can seamlessly use the coin in-app (be it FB, Insta, or Whatsapp) to pay friends and purchase goods, are substantial. But the benefits this powerful new trove of data will bring Facebook are bigger still.
A Cash Grab From the Worldâs Data Despots
Facebookâs extremely shitty attitude towards protecting user privacy does not need reiterating. Indeed, it is hard to think of a worse qualified custodian of a global digital currency. For all its crimes though â deplatforming, unauthorized data sharing, censorship and flagrant privacy violations â Facebook remains the worldâs dominant social network. People are inherently complacent and, save for a handful of privacy purists, there has been no mass exodus of users in the wake of the Cambridge Analytica scandal and similar abuses. It doesnât matter how much data Globalcoin harvests or who itâs shared with: if the coin works seamlessly, people will use it.
As for quite how crypto Facebookâs crypto is, the answer is ânot very.â As a permissioned currency, just like the permissioned social network it lives inside, itâs irrelevant whether GC runs on a blockchain or an SQL database. No amount of nodes or validators will change the fact that your globalcoins are only yours provided you use them for the purpose that Zuckerberg intended. Play by the rules, and youâll be just fine. Step out of line, however, and expect to see your account balance emptied and wallet frozen. As Bloomberg put it, âMore than 2 billion users spending one currency, controlled by one billionaire. Whatâs to worry about?,â noting that Dr Evil would love Globalcoin.
Wow bold move from Facebook on the Globalcoin logo pic.twitter.com/YAMFRoxUYt
â Josh Cincinnati (@acityinohio) May 24, 2019
What Globalcoin Means for Cryptocurrencies
As for what GC means for crypto, there are essentially two schools of thought. One holds that GC holds a genuine threat in giving the masses the benefits of crypto â fast settlement, low fees, wrapped in a package that even grandma can understand â with none of the downsides, such as volatility, complexity, or the irreversible loss of funds. In this paradigm, GC will replace BTC as a medium of exchange (MoE), leaving bitcoin to serve as a store of value (SoV) and for payments that fall outside of Facebookâs purview â like buying drugs. If this comes to pass, then GC could also threaten other cryptos such as BCH, LTC, and DASH.
The other school of thought holds that Globalcoin will serve as a Trojan horse, or gateway drug, to ârealâ cryptocurrencies. Through normalizing the use of digital currency, it will make the transition to permissionless crypto seem less scary, ensuring that bitcoin is primely placed to onboard the masses when they tire of GCâs limitations: the privacy concerns, the data abuses, and the limited means of spending. In this context, Zuckerbergâs vanilla crypto will get bested by bitcoin, which can outmuscle it on all fronts, save for network effects. With an estimated 30 million cryptocurrency users versus 2.4 billion Facebook users, Globalcoin will launch with a massive advantage.
Didnât think Iâd ever say this, but:
I donât want to live in a world where mark zuckerberg beats the winklevii.
â Ryan Selkis (@twobitidiot) May 24, 2019
Love, hate, or fear it, Globalcoin merely represents the inevitable evolution of money. The majority of our spending has already gravitated to the digital realm, be it Paypal, Apple Pay, Visa, Venmo or bitcoin. With the underlying payment network being abstracted away while cash dies a slow death, Globalcoin will take a seat at the table of digital payment solutions, despite offering nothing new. As has been reiterated many times over, bitcoin doesnât need to take over the world to succeed: it simply needs to survive, in one form or another. It is highly probable that Globalcoin will gain more users in its first month than bitcoin ever has or ever will. That metric, however, is meaningless.
What are your thoughts on Globalcoin? Let us know in the comments section below.
Images courtesy of Shutterstock.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.