Facebook cryptocurrency, skepticism is growing

Facebook cryptocurrency, skepticism is growing. That's why Tech Central analysts don't believe in facecoin.

You can be confident about the new one Facebook cryptocurrency? Some say yes, others say no. According to Tech Central analysts, for example, he is mounting a substantial skepticism, based on numerous aspects of reference.

First of all, the TC analysts point out, if there is a characteristic common to the hundreds of projects of criptovaluta announced in the last four years, is that the hype has often turned out to be exaggerated. For example, of the 103 projects announced by the 2015 to date and able to apply the so-called blockchain technologies, on financial services, all, except for a handful, have peacefully disappeared. No one has yet been led to commercial-scale launch, although around half a dozen projects could achieve this by the 2021.

Is there anything in Facebook that could suggest a different result? According to many not, even if the obvious parallel is with the Chinese payment solution WeChat Pay, the largest mobile and internet payment solution used by 900 millions of users, almost exclusively in China. However, WeChat Pay does not involve cryptocurrency, but uses consolidated server technologies to allow people to transfer money into and out of conventional bank accounts and other users.

Facecoin

The New York Times reports, rather surprisingly, that the facecoin (Unlike WeChat Pay) will be based on integration with cryptocurrency exchange systems, which exchange conventional money for digital currencies, rather than with the conventional banking system. But since cryptographic exchanges are subject to increasing regulatory pressure due to their lack of transparency and irregularities in their functioning, it is unlikely that this link will encourage people to adopt such a project.

It is also difficult to make sense of the intended use of the facecoin for remittances. Large banks already send funds almost instantly and without cost from one country to another. Costs and inefficiencies arise in the last mile, when the funds are converted into local currency and are used for a local bank account or for cash collection. There facecoin technology it will do nothing to solve these problems.

Another question mark relates to support for facecoin. Unlike bitcoin, which is not anchored in any other currency, facecoin will need real money support to maintain its fixed price. The safest approach will be full coverage: for every dollar issued by Facecoin, Facebook could hold 1 dollar reserves in a separate account. In the case of partial coverage, Facebook would need a banking license and would expose itself to all the burden of banking regulation. Ideally, the reserves would be held at a central bank. But central banks will be reluctant to support a private currency.

Skepticism comes from users, privacy and authenticity

But perhaps the main reason for the skepticism derives from the challenges that Facebook must already face as regards i user data, privacy andauthenticity. If it takes on such an important role in daily payments as it has already had in personal communications and social media, then it will become an even bigger target for the growing antitrust movement ...