Facebook has announced that their cryptocurrency libra has been backed by companies like Uber, PayPal, Visa and Mastercard. While there is a vivid discussion about the centralization of cryptocurrencies, I believe that Facebook can massively scale the user base of the libra Coin.
Facebook owns the network – and networks are stronger than decentralization
Although it oftentimes does not sound like when I am giving keynotes or speeches, I believe in decentralization. Nonetheless, the other side of the card is the power of established players. And there is oftentimes a conflict of interest: Which interest do centralized platforms have to support decentralized cryptocurrencies – which would oftentimes mean to give up the control over users.
Why Facebook could turn out as the most important player to drive mass adoption for cryptocurrencies
Practically thinking, I am convinced that most people would rather use a more centralized currency that is very easy to use and tangible than a fully decentralized cryptocurrency.
Expecting people (especially non tech savvy) to buy cryptocurrencies on an exchange, create a wallet, withdraw the currency from the exchange and then use it with the wallet seems irrealistic to me. If there is a far less (technically) advanced currency, that instead provides an interface to buy it in less than a minute with your credit card, this can truly drive mass adoption.
How does the future of libra look like?
Concluding the before said, Facebook simply has everything to scale the libra Coin and obviously the resources to invest in proper R&D. Furthermore, adding key players like Visa, Mastercard, and Paypal as payment processors and Uber as end-user applications is a genius move. It enables easy access to the libra coin and possibly the first platforms that accept it before it has even been launched.
Congratulations to Facebook for a very smart move.
In the end, the polarised views of centralized and decentralized worlds will merge together in the long run – this is what I am convinced of.
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This is no financial advice and no indication of future happenings. Do your own research.