How Facebook Hopes To Succeed Where Bitcoin Failed
Bitcoin made an indelible and unquestionable mark on the world of finance and shape the way we see and think about cryptocurrencies. But Bitcoin didn’t live up to its potential since there were inherent flaws within the system itself that made things clunky once the coin was established. All blockchain-based cryptocurrencies, regardless of the type, suffer from similar woes – scalability, transactional cost and transactional time being three bottlenecks within a coin’s operating paradigm. Codementor notes the effects of a massive amount of users on a blockchain, highlighting these three areas of weakness among others. The failure of Bitcoin isn’t the end of the world, however. If anything, its past success suggests that a coin that can manage the issues that Bitcoin faced may be poised to become a leader in the digital cryptocurrency sphere.
The Mainstream Adoption of Blockchain
CNN reported recently that a US bank, JP Morgan Chase, was rolling out a blockchain-based digital solution tied to the value of the US dollar called JPM Coin. Touted as a stable coin because of a lack of volatility, it is hoped that it would be one of the more popular digital coin offerings since it comes from a reputable bank which has a strong financial backing behind it. However, it has been argued by Forbes that the JPM Coin isn’t a true cryptocurrency, due to the fact that it’s not an openly available currency and doesn’t have the same aim as cryptocurrency in giving power back to the consumer since it operates under the purview of a financial institution. In the sense of giving transactional power back to the people, there have been quite a few alternative attempts by messaging companies to incorporate payment methods based on digital coins.
Cryptocurrencies and In-Messenger Payment Solutions
Telegram, another messaging service, recently announced their own crypto offering TON is about 90% complete, according to The Block Genesis. Telegram’s operators have routinely gone against the status quo. The initial founders were a group of Russian exile and their disdain for the establishment has been at the forefront of their pushing the boundaries of innovation. Cryptocurrency seems right in line with this sort of thinking. Signal, another privacy-oriented messaging service is also looking at developing a cryptocurrency termed Mobilecoin. Both of these systems are built on the existing success of applications like Venmo which allows for the digital transfer of funds from a mobile application to a bitcoin wallet.
Facebook’s Messenger Cryptocurrency
Facebook (which also owns Instagram and WhatsApp) has thrown their hat into the ring as well, and because of their user base across these three highly popular applications, their coin may have less of an issue being accepted as currency. Bloomberg notes that Facebook’s initial market is the WhatsApp user base, leveraging the coin as a way to transfer money through the popular mobile messaging app. However, despite their popularity, it’s likely that Facebook may face the same hurdles to jump through as Bitcoin to be accepted as a currency across the world, to say nothing of the technological limitations of the blockchain. Facebook’s aim in piggybacking off the success of Bitcoin is to not fall prey to the same problems the first cryptocurrency encountered. The only way to do that is to innovate on the idea of blockchain with the aim of creating a more sustainable economic model.
Freedom of Person to Person Transactions
If Facebook succeeds, it would be a win for both cryptocurrencies as well as for the average citizen. By allowing freedom of transferring funds, Facebook gives back the consumer the power to use their money as they fit without having to pay for utilizing the services of financial institutions. The way around the bottlenecks that plague traditional blockchain is likely to think outside of the box. Development of cryptocurrencies is still a nascent industry, but there are teams like Grasscity, and Grasscity UK who accept bitcoin that are pushing the envelope when it comes to what is possible within this sphere. We can only hope that Facebook is one of those teams and that their currency becomes accepted by the user base they built it for.