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The development of Facebook Inc. of its cryptocurrency, reported by Bloomberg in December, has the potential to quickly launch digital tokens, such as Bitcoin, but also suggests an obscure and dystopian future.
Facebook incursion whispers in this new world have been circulating for more than a year in cryptocurrency circles. But few had any idea what the company was doing. After all, there are many applications for cryptocurrency and related blockchain technology.
Quoting anonymous sources, Bloomberg reported that Facebook is developing a so-called "stablecoin", a type of cryptocurrency anchored to the US dollar, to be used in its messaging platform WhatsApp.
The Facebook project seems to resemble the payment system in the popular WeChat, by the Chinese Tencent Holdings Ltd. While not using cryptocurrency, that payment method has been so widespread in China that anyone who still uses money is immediately referred to as a tourist.
Facebook's cryptocurrency has the potential to do it for the rest of the world. If it is even half the success of WeChat Pay, it will probably be widely used, rooted in people's lives in the same way as the social network.
Cryptocurrencies – of which Bitcoin, marking its tenth anniversary on Thursday, was the first – operate without a central authority, allowing users to make peer-to-peer payments. With broad adoption, it can get rid of the transaction fees of debit and credit cards that traders claim and turn into prices.
Facebook is perhaps the biggest mainstream player to embrace the cryptocurrency at this level and its move reaches the largest number of people. It would bring the new technology to the attention of billions, potentially triggering the big change in payment systems for which cryptocurrency enthusiasts had hoped.
But a Facebook cryptocurrant has a dark side. The technology giant would be able to collect far more than the simple transactions people do; would be able to combine and analyze this information with personal details extracted from their social network profiles. This is a powerful and priceless information that few have on a large scale.
Although not legal tender in most countries, cryptocurrency, especially that with a stable price, works just like money. With its release, Facebook also becomes a quasi-bank, with the great power that comes with it.
Consider the case of Tether Ltd., the company behind the most famous stablecoin, which has been investigated by the US Department of Justice. While the department said little, academics and traders claimed that Tether's similar name coin was used to strategically buy Bitcoin, bringing its value to heights of $ 25,000 in 2017. The company denied the malefic.
