Facebook's Cryptocurrency is a nail in the box for "Blockchain Not Bitcoin & # 39;
Edan Yago is the founder of CementDAO, an attempt to collect stablecoins into a unified ecosystem. The views expressed here are his own.
With the announcement of Libra, cryptocurrency has entered the major leagues.
Facebook's entry to this market means that every single company must now take cryptocurrency seriously. Companies around the world are now considering their cryptocurrency strategy.
This is not a repetition of corporate circle chips in 2015 and 2017. Then companies played with the idea of having a "blockchain" strategy. Blockchain was a buzzword, and companies disguised their innovation departments in building toys that never saw the light of day as actual products. This time could not be any different. Facebook has hammered the last nail into the coffin of "blockchain not bitcoin."
Facebook has taken blockchain seriously. They understand that "technology" is not cool. What is cool is the high quality products that technology can be used to create: digital cash, new currencies, and programmatic money. Every single business has ever tried to make money.
Now, one of the world's largest corporations, has decided to dispense with the middle steps and go directly to the money party.
"Why have the crypto customers been asked," Do they need a block chain for this? "" Libra will be allowed. They could have "just used a database."
The answer is simple. Even Facebook could not create this product without (though limited) decentralization that blockchain provides. Facebook needs blockchain for this for the same reason that any cryptocurrency needs blockchain. The only key players that are allowed to issue money are regulated financial institutions. They must be regulated wherever money is issued and used. There are hundreds of different jurisdictions with thousands of regulations.
Blockchains are protocols that make money and transact money in the form of cryptographic evidence. They are unregulated for the same reason peer-to-peer encryption is unregulated: They are too abstract. The combination of decentralized management and value that results in solving mathematical problems means that regulators themselves define laws that will be limited enough to be sensible and broad enough to be effective.
They have tried to regulate encryption and encryption many times and always failed.
Up to now, it was a curious fact that polite society had agreed to mostly ignore, sometimes with a disgusting laugh. From now on, it is a fact of business that serious leaders must master.
Master what they want, and Facebook has posted the textbook:
- Decentralize as much as is needed, but no more
- ] Give a sign of stable value so that it can be reliably used in trade
- Utilize your existing ecosystem to get users.
Opens these things and you a whole world of profit from seigniorage before you. Build loyalty that goes beyond just brand and product to the actual payment method for these products. Collect data previously unheard of and assign purchasing behavior to marketing in ways never before possible. Tax each transaction or interest earned on funds held as reserves. And if you play your cards properly, you can even make money out of thin air.
The big leagues attract the big players. Banks, technology companies, giant dealers, telecoms now have no choice but to enter this game.
The world will not be idiotic and let Facebook own this new, phenomenal market opportunity. A thousand stallcoins come. Starbucks will let you buy wait with "Starbucks." Verizon and AT & T will give money as mobile and smart as the device already in your pocket.
Juul will give you discounts if you pay in Jems. The city of Venice will make tourists pay for the burden they have been in, more so, Ducats.
Sure, many of these products will have the same fate as Pets.com. Most products fail. And then? Money is a product now, and if there is one thing every business wants to do, it makes money.
Bell via Shutterstock
