Social media giant Facebook is launching its own digital currency and will change e-commerce, challenging Bitcoin.
The world’s largest social media platform is looking to claim a stake in the next big e-commerce revolution, cryptocurrency. And it is aiming to make a big impact. Everyone, welcome Facebook Libro cryptocurrency.
Expected to launch in the next 12 months, Libra, Facebook’s personal digital cryptocurrency will enable users to shop directly off the platforms, changing the way we interact with sites and online shopping. Instagram and Whatsapp, both owned by Facebook, are expected to incorporate this new digital currency.
Shop online with ease
Currently, e-commerce websites such as Amazon, Superbalist and Takealot advertise products on social media using paid ads. Once engaged with, the advert directs users off the social media site and onto their e-commerce website.
Although this is unlikely to change in the beginning, Facebook’s Libra will offer users the chance to purchase products directly off the social media page without moving across. The cryptocurrency will pay the e-commerce website and each sale will be logged as a purchase on the site and communicated through the social platform.
Why digital currency?
Currencies change in value all the time. And with each currency, bank and country having specific regulations regarding international and online payments, the concept of having a specific currency which people use on each platform makes transfers and controlling regulations easier.
The idea is simple: You exchange your currency for Libra and use it to buy things on Facebook, Instagram and Whatsapp (once Whatsapp advertising is fully tested and finally launched).
Is there another reason?
Yes, the other reason is money. Facebook has over 2 billion users globally, meaning they can control and access the way these users spend money with the potential of taking a portion of the transactions, resulting in a lot of money for the Facebook.
Even if they don’t take a portion, the potential of such a giant market using their cryptocurrency will result in the value of Libra escalating exponentially, much like the rise we saw with Bitcoin in 2017.
Has this been done before?
Yes, by another online chat application WeChat. The Chinese-owned application has been offering customers the chance to buy things online directly off the platform. However, the digital currency aspect is somewhat new as Facebook will launch its own cryptocurrency.
The service is only available in specific locations for WeChat users, and considering the recent ban on Huawei products using Google Android operating systems due to security threats, the battle for digital supremacy in leading markets such as China and India will be huge.
Will Libra be valuable?
We don’t know yet. If it’s made available to the public and is open for trading, Libra will be similar to other cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) which fluctuates in value on a daily basis.
If Facebook keeps Libra in-house, they might be able to dictate the exchange rate and value. However, this involves a lot of legislation and could require a large human aspect to the process as many inquiries will need to be answered and resolved.
Will Facebook rule cryptocurrency?
Again, we can’t answer that now. Such a large user base still needs to buy into the idea of cryptocurrencies and many social media users don’t buy things online yet. And Facebook won’t be the only company trying this.
Google and Amazon currently control a large part of how we engage with e-commerce. If they decide to jump on this cryptocurrency train, they will certainly join Facebook in becoming a digital currency disruptor.
All information contained in this article was accurate at the time of publishing. Information regarding the topic or any information obtained from sources is subject to change without the notice of this article.