Facebook is said to be exploring minting its own cryptocurrencyIf Facebook wants to mint private currency, can it still be the judge of morals and manners among users?
A software engineer and tech blogger sees ideas sprout up all over, including both the absurd and the brilliant, as traditional companies try to incorporate cryptocurrencies into their business model.
Some companies are simply minting their own currencies, negotiable for their products, but many of them have fallen by the wayside:
ICOs raised more than $5.6 billion in 2017. But many of the projects that launched ICOs were abandoned or turned out to be outright scams, leaving buyers with a bunch of useless coins and creating a general sense of mistrust toward ICOs and the companies behind them. Ben Dickson, “Brilliant or Dumb? Traditional Companies Eye Cryptocurrencies” at PCMag
Private currency isn’t in principle a scam. Historically, privately minted currencies were used in parts of North America that faced a shortage of recognized government currencies, especially for the fur trade in remote regions.
However, a currency that was backed by marketable furs in cold storage had intrinsic value. What is the market value of an idea that never took off?
Facebook is said to be looking at creating its own its own cryptocurrency and Dickson thinks it stands a better chance than the recent flops:
FaceCoin, or whatever Facebook plans to name its cryptocurrency, also has a great chance of succeeding. The company already allows payments through its Messenger app, but only when connected to a debit card or PayPal accounts, which is not an option for a large portion of Messenger’s 1.3 billion users. With a lower entrance barrier, cryptocurrencies enable more users to make peer-to-peer payments through Messenger, which could make Facebook’s token the most popular cryptocurrency once it launches. And contrary to centralized in-app currencies, cryptocurrencies let users buy or sell them on decentralized exchanges and other digital marketplaces that are unrelated to their native platforms.
Presumably, then, you could use your FaceCoin at Amazon. Provided, of course, Facebook hasn’t kicked you off the platform. Which raises, once again, the perennial question with big social media companies: Do they want to be a telephone company or Miss Manners? That is, do they enable connections or act as chaperones and cops? The fact that Facebook pages are free to most users means that the question doesn’t get beyond the opinion stage. Get money involved and it will all become much more complex.
If they plan to mint currency in a free market, they must lean toward the former model.
See also: How do bitcoins work, anyway? And what’s their future? A roundup for non-geeks
How Bitcoin works: The social value of trust (Jonathan Bartlett)
Is Bitcoin safe? Why the human side of security is critical (Jonathan Bartlett)
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