For all of you who are not familiar with cryptocurrencies, here’s the most basic of explanations you’ll ever read. Cryptocurrencies are a digital form of money. Just like you use currency i.e. cash & coins; cryptocurrencies are a virtual and digital form of these coins, the most common being Bitcoin nowadays. How these cryptocurrencies are based and verified is another topic on blockchain technology for another time. Today we will solely focus on the pros and cons, some classic crypto success stories & new innovations taking place in this particular industry, mainly the facebook cryptocurrency
Let’s begin with the latter. Libra; the newest addition to the list of cryptocurrencies is a huge launch by Facebook. Not only this, but it is backed by the likes of 27 multinational companies. Visa & Mastercard being the financial giants from the bunch & Spotify, Uber, Lyft, eBay being some of the tech giants involved. Talk about launching with clout! Facebook boasts that Libra will change how humans exchange money, goods & services and there are whispers that the banking industry should be worried. Well not to over exaggerate it but if a buyer can just transfer some Libra to a seller from their phone or handheld device as a mode of payment then yes there may be a possibility of customers switching to it compared to traditional banking services years down the line. Now I know you might be asking “Yeah but didn’t Bitcoin try doing that already & not succeed?” Let me explain this to you with a simple economic concept.
Bitcoin acquired fame quite quickly overtime and acted as the face of the crypto industry. This lead to its price shooting up in very short time frames as demand of buying Bitcoins was surging massively. Now let’s shed some light over the story of Eric Finman i.e. the youngest Bitcoin millionaire. He bought $1000 worth of Bitcoin when it was just priced at $10 (kudos to his grandma for gifting him a thousand bucks) and then sold it a few years later when it was at $1100. He then used the money to open up an online educational business and then sold that business for 400 bitcoins. Currently Eric Finman is 19 years of age and is worth $4M.
The information we deduce from this story is that bitcoin was like digital gold for making a good amount of money in a very short period of time and so its purpose of being used as a day to day medium of exchange was not completely achieved. Libra, the facebook cryptocurrency on the other hand has entered the market when customers are done experimenting from the likes of Bitcoin and other crypto currencies. Furthermore, the vision Facebook has presented of transforming the financial system is being communicated to users from the very start. Integrating Libra with major social media communication platforms such as WhatsApp & Messenger is also a very successful strategy in my opinion as customers of all age groups and preferences are familiar with these platforms.
All that is left is for us to wait and observe how lawmakers and governments react to the idea of Libra, the facebook cryptocurrency being mainstreamed to the world and how our lives are impacted by new advancements in the tech industry.
Stay Tuned to PulseLine Pakistan for more exciting tech news!