tech2 News Staff Mar 01, 2019 17:17:02 IST
Crypto-currencies have been around for a while now, promising a world where online transactions won’t be overseen by a central authority or regulators. Towards the end of 2017, the boom in bitcoin brought cryptocurrencies on the front pages.
There has since been a huge rise in the cryptocurrency startup space.
According to a report in the The New York Times, Facebook is secretly guarding its crypto plans to the extent that its 50+ member cryptocurrency team works in a silo in a different office premise requiring unique key-cards to access. It is also in talks with cryptocurrency exchanges to list its digital coin which Facebook is expected to launch in the first half of 2019, most likely to be transacted on WhatsApp.
Messaging apps such as Telegram and Signal are also working on their own cryptocurrencies which are expected to be released next year.
A man stands near an advertisement of a cryptocurrency exchange in Tokyo, Japan March 30, 2018. REUTERS/Toru Hanai/Files
Facebook’s cryptocurrency ambitions
Facebook-owned WhatsApp is one of the most popular messaging platforms globally. WhatsApp Pay, which is WhatsApp’s fintech-focussed feature is getting delayed in India and many countries due to regulatory hurdles. To bypass this, it looks like Facebook is working on a virtual coin that WhatsApp users could send to their friends and family members over the messaging platform, five people familiar with the matter told NYT.
This project is being headed by David Marcus, who was the former president of PayPal. Speculations hint that the coin being worked on would be pegged to the value of traditional currencies including not just the US dollar but other currencies too. It is more geared towards introducing a stablecoin — one who’s value doesn’t wildly fluctuate. Facebook is expected to guarantee the value of its coin by backing every coin with traditional dollars or euros or other traditional currencies held in Facebook’s bank accounts.
Facebook’s plans to integrate WhatsApp, Messenger and Instagram messengers could be another step in that direction, as this will then let Facebook have around 2.7 bn people (according to current user base) on a single platform.
But since Facebook likes to have complete control over things, one wonders how the principles of cryptocurrency would apply, which is fundamentally based on the premise of being without regulation. Facebook is said to be in talks with some cryptocurrency exchanges to facilitate this, but nothing is known for sure.
Creating something with strong privacy guarantees that a billion people will have access to on day one would combine liquidity and anonymity in a way we’ve never seen before.
No precedent for this, hence my suggestion that FB start public discussions on the tradeoffs early.
— Alex Stamos (@alexstamos) February 28, 2019
Former Facebook head of information security, Alex Stamos tweeted that this was a one of a kind project, but it was more important to ensure privacy from the get-go.
“Without mathematically-backed privacy features having all of this data in one place would be a massive source of security and privacy risk, and a huge boon for countries with leverage over FB to get data access,” tweeted Stamos, calling for more public discussions on this project.
But many are already convinced that this is just a recipe for more troubles in Facebook’s scheme of things, given the company’s track record in user data privacy.
Telegram, Signal and others
Founder and CEO of Telegram Pavel Durov delivers a keynote speech during the Mobile World Congress in Barcelona, Spain February 23, 2016. REUTERS/Albert Gea – D1AESOQXTQAB
Telegram with its 300 million users globally is also working on its own cryptocurrency, speculated to be called Gram. In fact, three weeks ago, Telegram in a letter to its investors said that the Telegram Open Network (TON) project is 90 per cent complete and it has also raised $1.7 bn in its initial coin offering.
According to this report on CoinTelegraph, the Gram tokens will be terminated if the TON does not launch by 31 October 2019 according to a purchase agreement.
TON will not have any bank or government bodies involved and its flexible architecture claims to allow millions of transactions per second.
Signal is also expected to release its Mobilecoin for which it had raised $30 mn in 2018 and there are plans to release another $30 mn.
It’s still early days to say how these cryptocurrencies on major messaging platforms will play out.
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