According to recent reports, Facebook is planning a release of its own blockchain-based currency in the second half of 2019. The new Facebook cryptocurrency, designed to work on WhatsApp (and perhaps other platforms in Facebook’s portfolio soon after), is meant to allow users to send payments instantly through an encrypted network.
Bear in mind that this isn’t the first time Facebook has tried to develop its own payment system. However, Facebook’s application of blockchain and cryptocurrency, especially in their peer-to-peer form via WhatsApp, is interesting on its own. What does this new development mean for the future of crypto payment?
Failed Attempts
As mentioned before, Facebook has tried to develop its own payment system in the past. In fact, the company made several attempts to create a payment network to support its social networking platform. Back in 2011, Facebook introduced Facebook Credits, mainly for buying content and completing in-game transactions. It was shut down after only two years.
Soon after, we were also introduced to Facebook Gifts. However, this particular attempt was riddled with problems. International gifts, for example, practically didn’t work due to the different challenges Facebook faced across borders. Similar to Facebook Credits, Facebook Gifts were dissolved two years after they were introduced in 2012.
The most recent attempt is Facebook Messenger Payments, which was introduced exclusively in the United States in 2015. Two years after the first US trial, Facebook brought Facebook Messenger Payments to the European market. Messenger Payments is still a feature that you can use today, but did you know this payment option has been available all along? Exactly. Messenger Payments never received the wide adoption it was designed for.
So, plenty of failed attempts provide a clear sign that Facebook is just not good with payments, right? Well, not quite. While Facebook may not have the history and reputation for creating a stable and user-friendly payment platform, the company certainly has the resources to do it. That brings us to the company’s current attempt.
Crypto Payments in WhatsApp
There aren’t that many confirmed details about the new payment system for WhatsApp, but there are several routes that Facebook can choose depending on what they want to achieve. At least we know that blockchain will be the underlying technology this time.
Facebook has been researching the use of blockchain in various applications, so developing its new payment system on top of blockchain technology is not out of character. In fact, Facebook has the ability to build and maintain its own decentralized network thanks to its massive user base.
Aside from being decentralized, Facebook also has another reason to decentralize its new payment system: regulation. As we all know with Facebook Gifts, entering multiple markets at the same time and complying with regulations in each of them is a big undertaking.
Rather than taking on the markets on its own, Facebook is showing signs of introducing its new crypto payment to exchanges. It will be up to the exchanges to market the coins and service the users, allowing Facebook to focus more on the technology and value of the coins.
It is almost certain that Facebook’s next payment system is a crypto payment, but it may not be cryptocurrency in the traditional sense of the concept. In fact, Facebook may try to create a stablecoin, which is a form of crypto-based currency with a flat value.
By eliminating the price volatility (almost) entirely, Facebook’s new crypto payment could be the perfect transactional coin we’ve all been looking for. With the value of the currency being well-maintained, a stablecoin by Facebook could change the entire market indeed.
Market Impact to be Expected
The crypto market is more vibrant than ever. Coins like Bitcoin, Dash, Ethereum, and Litecoin are all expanding exponentially. More businesses are welcoming cryptocurrencies either as a payment method or an investment instrument. The adoption of crypto among individual users continues to grow at a sustainable rate.
Major companies accepting cryptocurrencies are always interesting. PayPal was one of the first to embrace Bitcoin as a payment method. PayPal’s unique position as a payment processor makes its acceptance of Bitcoin a huge thing.
Investors are also pampered with more tools and resources. Coins.live, for instance, is now the go-to portal for crypto prices. The crypto prices are live and monitoring them is easier than ever. There are tools to help you organize your crypto portfolio and investments too, making this site a must-use if you want to enter the cryptocurrency market.
Will Facebook’s new crypto payment disrupt the current market balance? Many experts believe that the answer to that question is a no. While the new crypto-based coin from Facebook may introduce a payment method that users will widely accept, it will actually bring positive impacts – instead of disruptive ones – to the cryptocurrency market as a whole. We actually can’t wait to see how Facebook uses blockchain for its new payment system!
