Zuckerberg’s virtual currency is a nightmare for Bitcoin supporters
Facebook is working on its own digital currency project. Garrick Hileman, an academic from the London School of Economics, does not hesitate to identify this as one of the most critical events in cryptocurrency history. Other analysts, however, look at the activities of the often prosecuted technology giant with considerable suspicion. Hileman argues that, while about 30 million people use cryptocurrencies, Facebook’s user base reaches 2.4 billion people. Therefore, the company has the potential to materially popularize transactions with digital coins.
Bloomberg’s commentator, Lionel Laurent, sees the size of Facebook and its business as a risk. Laurent writes: “This is a step that would allow an already incredibly powerful centralized network to collect data; not only on user behavior and preferences, but also on how they spend their money.” He also says that the unintended consequences of cryptocurrency under Facebook’s patronage can be enormous.
At the same time, the journalist and analyst suggests that Bitcoin, the best-known cryptocurrency, would not necessarily be threatened by the advent of Facebook’s GlobalCoin. Both projects are conceptually different. “From the perspective of true cryptocurrency supporters, Facebook’s initiative is a nightmare,” writes Laurent.
The future of Bitcoin
According to Laurent, the purpose of Bitcoin is to offer an alternative to the established financial system. On the other hand, Facebook’s initiative is seeking a symbiosis with it. Investors must prepare for the fact that the value of one “GlobalCoin” will not likely exceed one dollar. This is because these virtual coins are to be firmly tied to the value of the U.S. currency.
“The beauty of Bitcoin and other cryptocurrencies is that they make censorship impossible. No one can freeze your account or block a transaction,” says Steven Buchko, an online writer for CNN. Founded in 2009 as an alternative to official currencies, Bitcoin has established itself as the leading cyber currency over the years. However, its price is subject to considerable fluctuations.
In 2017, the price of Bitcoin experienced a sharp rise, and the currency came to the center of media attention. By the end of that year, the price had exceeded $19,000, but a year later, it had come close to $3,000. Currently, its value stands at around $8,000. Critics of Bitcoin, however, argue that it is this extreme volatility that prevents this virtual currency from becoming a massively used medium of exchange.
Update: Facebook’s GlobalCoin project has changed its name to “Libra”, you can read more information in the following link: https://en.wikipedia.org/wiki/Libra_(digital_currency)