The recent announcement that Facebook is venturing into cryptocurrency is seen as a pinnacle moment for the digital trading of cryptocurrencies according to many investors in the crypto world. The move to this platform by Facebook could see the digital asset used as a form of payment within its messenger applications facilitating buying crypto assets such as Bitcoin. This move could be the impetus needed for the banks to activate similar schemes.
According to Spencer Bogart of Blockchain Capital, this move by Facebook is seen as one of the most critical moments in Bitcoin and the trading of cryptocurrencies being accepted since this technology was launched.
What this means for the crypto world
The crypto and digital currency world are upbeat about the efforts of Facebook. Advocates of Bitcoin see this as a move to the regulating of this space.
Various newsagents have published reports that Facebook is looking into having a Facebook digital currency, that can be used for both purchases and payments through their applications, namely Facebook Messenger and Whatsapp. This news from Facebook has let to Bitcoin trading above $9,000, the highest in the past year. The announcement also saw a climb in Facebook shares that rose by more than 3% early this week in anticipation of the announcement.
David Marcus, a previous executive with PayPal, has been tasked by Facebook to look at how blockchain and the cryptocurrency technology can benefit Facebook. The team tasked with this research numbers more than 100 with reports that this number is set to grow.
Additional reports indicate that Facebook is also exploring the introduction of machines similar to ATMs, which can be used to purchase the currency. Also, employees could be paid in the new currency via the ATMs.
An easier path to the crypto market
Facebook’s venture into the crypto world would give the man in the street a less complicated method of venturing into this new industry. Currently Bitcoin is purchased and traded on platforms such as Coinbase or Gemini or via financial applications like Square Cash or Robinhood.
The difficulty arises when converting from any global currency to the digital asset. However, once the user is familiar with the online world, fewer problems are encountered when moving from an asset like Facebook to something like Bitcoin.
The global popularity of Facebook will give them an outstanding opportunity to introduce their users to the digital asset industry.
Another supporter of Bitcoin from its inception and a man who started the Digital Currency Group, Barry Silbert, expressed his view that this move by Facebook is the one that spurred the masses into taking on the digital world. He compared this to the impact made with the launch of the Netscape browser.
The primary reason for the development and introduction of Bitcoin was as a means of sidestepping the customary financial institutions. The cryptocurrency hit the news when Mt Gox, a Bitcoin exchange based in Tokyo, suffered several malware attacks and then ousted by the United States financial system for administrative irregularities and then in 2013 the exchange was forced to cease operating and filed for insolvency.
When the underground trader Silk Road was forced to cease operations in 2015 following the use of Bitcoin for purchasing weapons and other illegal goods, Bitcoin was tarnished and viewed as a currency used by criminals – a question that is still asked today.
President of the Bitcoin Association, Jimmy Nguyen pointed out the in its early years, those involved in the crypto world were seen as revolutionary and antagonistic towards governments and financial institutions which sounded the alarm bells and prevented these larger commercial organizations from becoming entangled and investing in cryptocurrency.
As more and more of the bigger corporates become involved, it lends more credence and validity to the crypto world.
The growth of Bitcoin
When Bitcoin hit a record high of nearly $20 000 at the end of 2017, more and more investors looked at this asset, and it made its way into conventional finance. CEO of Genesis Global Trading, Michael Moro, saw this as the moment when investors saw Bitcoin as less obscure and odd and so the popularity of the currency grew.
Moro went on to say that the general public would become more acquainted with the concept, should Facebook introduce its own digital currency.
Skepticism surrounding Bitcoin
In its initial stages, the purpose of Bitcoin was a means of payment between associates. This has moved to become an asset of value or digital gold, which would be the significant difference between the cryptocurrency of Facebook and Bitcoin. Moro went on to say that Facebook may lead to, in the long term, a society that operates without cash.
Co-founder of DataTrek research, Nicholas Colas, said that this move could endorse Bitcoin and that for the many companies that are in favor of Facebook’s launch into the crypto world, many who are not.
Colas indicated that Facebook may use the Bitcoin technology and that this venture could lead to a redistributed payment and currency scheme.
The Framework of the Facebook cryptocurrency
With the pending announcement from Facebook, many see this as the catalyst for forcing financial departments to implement support structures for accepting the crypto world. Fidelity Digital Asset Services came on board in the early stages by protecting investors on a multitude of platforms such as hedge funds and trade exchanges.
A statement from Blockchain Capital indicated that the financial world can no longer sit back and watch the development of the crypto world and the grown of online trading but that it needs to set up the required support systems for the adoption of the digital world.
Malware attacks have always been the greatest threat to the investment in cryptocurrency, which has prevented larger financial institutions from accepting digital assets. The efforts of Facebook may lead to the organizing of wallets, custody, and regulation among the more prominent financial conglomerates.