Amid a blizzard of new reports on Facebook’s probable future ‘Globalcoin,’ we’re starting to get a pretty defined picture of what this new cryptocurrency would look like.
Reports this week at CNBC show that the new Facebook coin, which would facilitate in-app purchases, could also be used as a salary incentive for employees.
In addition, Facebook plans to roll out physical ATM machines where consumers can buy this digital asset.
These breaking reports are starting to give us a visual of how Facebook could be the game-changer for cryptocurrency.
To date, consumers have been slow to embrace Bitcoin for various reasons. But the global obsession with Facebook could make Facebook’s Globalcoin the coin that takes off – the coin that you see people buying on the street, and using to purchase goods and services.
However, perhaps the biggest news about Facebook’s plans is that the company intends to partner with outside parties in order to decentralize the cryptocurrency.
Part of the big controversy with private coins has always been centralization.
When Satoshi Nakamoto mined the first Bitcoin, part of the philosophy of the new fintech phenom was that cryptocurrencies are inherently decentralized, and thus transparent and verifiable.
So when some party, for example J.P. Morgan, creates its own coin, which is totally controlled internally, it sets up an essential oxymoron – a centralized cryptocurrency that really doesn’t utilize the power of the blockchain in terms of its consensus-based model for asset verification.
Facebook’s innovative approach could solve this, too.
“Facebook is soliciting third-party organizations to act as ‘nodes’ to help manage the cryptocurrency, and has discussed charging $10 million for the privilege,” writes Matt Rosoff at CNBC yesterday, citing a report published in “The Information.” “Cryptocurrency nodes contain the computing power necessary to resolve complicated mathematical equations, which are used to validate transactions. They are typically decentralized and spread among thousands of parties, but Facebook is creating a foundation with named partners to help manage its currency, the report says.”
Rosoff also notes that a Facebook spokesperson declined to comment – so while we are getting a lot of details, Facebook isn’t coming out publicly and blabbing about what it intends to do with crypto currency. We’ll just have to wait and see.