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These 7 numbers tell us why Facebook’s Libra scares everyone!

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facebook-number-users

We have all heard the line “There is strength in numbers.” That is absolutely true when it comes to Facebook.

Why did the government suddenly take interest in cryptocurrency as soon as Facebook announced its interest with the possible introduction of Libra? While the mainstream rhetoric of recent privacy breaches and lack of trust in Facebook as a company to be ethical with user data have some truth to them, the real reason why everyone is panicking about Facebook’s move can be found in the numbers we are about to examine.

Caution: Some outrageous (maybe not) assumptions ahead

community

We have deliberately used some outrageous assumptions in this article. For instance, we take 70% of Facebook’s user base as “potential” users of Libra, the Facebook cryptocurrency.

From a “potential” standpoint, we could say 100% users minus the bot-driven and abandoned accounts. But we are sticking with 70%.

Bitcoin wallets, according Bitcoin.com, are around 41 million, while other sources show around 35 million. We are using 41 million for the purpose of this article.

The number of users does not automatically dictate the revenues generated; however, we are deliberately comparing the user base instead of revenue for the purposes of this article. For instance, JPMorgan Chase had $131 billion in revenue, with just 62 million users served, while Facebook generated $55 billion with a user base of over 2.5 billion.

With those housekeeping notes out of the way, let’s begin the comparison.

If Facebook were a Nation

Purely by numbers, if Facebook were a nation, it would be the largest nation on the planet. In fact, it would have been bigger than the population of China, Europe and the United States, combined.

As of 2019, Facebook’s user base is around 2.41 billion.

Recent stats put China’s population at 1.4 billion, Europe’s population at 743 million and the United States at 327 million, adding them to get a total of 2.47 billion.

Let that sink in for a second.

Facebook’s user base is bigger than China, Europe and the United States together.

Facebook as a nation
Using the total user base of Facebook, we will look at the potential of Facebook’s Libra, if it launches as planned.

These numbers don’t even account for the Instagram and WhatsApp user bases. Both these apps together have a user base of over 2 billion and growing. I do not have a personal Facebook account, but I do have WhatsApp, and I know a lot of people who will never touch Facebook but have both WhatsApp and Instagram accounts.

We hear about exodus from Facebook, never WhatsApp or Instagram.

That is the genius behind Facebook’s long-term strategy, even if they lose users from Facebook, they still have a staggering user base that keeps growing on both WhatsApp and Instagram.

If Facebook’s Libra was a currency

Sir John Hargrave noted during our interview that “the power of the United States, among other things, comes largely from the power of the US dollar.”

We agree.

As of today, the US dollar remains the most powerful currency in the world. It touches about 358 million people around the world.

However, if Facebook’s Libra were to be adopted by only 30% of its current user base, then Libra would touch 750 million people, more than twice the US dollar.

Facebook-as-a-currency
WhatsApp and Instagram could conservatively add another 20% to 40% new user base to the Libra nation. Again, a lot of people stopped using Facebook while they continue to use WhatsApp and Instagram.What happens if more than 50% of Facebook’s users start using Libra?

Cumulatively, the users joining the Libra cryptocurrency could be three to four times those that use the US dollar.

Of course, it scares the bejesus out of the governments, especially the US government. Imagine what kind of power that wields!

If Facebook’s Libra was a bank (World)

The world’s largest bank, Industrial and Commercial Bank of China, has a user base of about 607 million.

The potential user base that could one day become users of Libra, at 70% of its total user base and without counting the users who are easy converts on platforms like Instagram and WhatsApp, is around 1.8 billion. That puts Libra at three times the user base of world’s largest bank.
Facebook-as-a-world-bank
If Facebook’s Libra was a bank (United States)

JPMorgan Chase is America’s largest bank by revenue. JPM has a household customer base 62 million.

Following a similar logic as previously, with 70% of the Facebook’s 169 million users from the United States (and without counting the easy converts from WhatsApp and Instagram), Libra could one day have over 118 million customers. That is twice the size of the largest bank in the United States.
Facebook as a bank US

It took around 150 years to build the JPMorgan empire to make it the largest US bank by revenue with a lot of sweat, mergers, service and lobbying.

Facebook could surpass all that in less than a decade with a simple out of thin air cryptocurrency that is not even decentralized.

No wonder financial institutions are doing everything they can to put brakes on this monstrous venture.

If Facebook’s Libra was a bank (Europe)

Europe’s largest bank, HSBC, has a user base of 38 million around the world (not just Europe). While we couldn’t pull the data pertaining to the bank’s customer base in Europe, we assigned a generous 50% of total user base to Europe for the purposes of this comparison.

Facebook’s user base in Europe is around 286 million.

Same as before, we are using a figure of 70% potential Libra users (without accounting for the WhatsApp and Instagram users jumping in on Libra) from the 286 million Facebook users in Europe.

That puts Libra’s Europe customer base at 200 million. A staggering 10 times the customer size of Europe’s largest bank.
Facebook as a bank Europe

If Facebook’s Libra was AliPay for the World

AliPay, China’s most popular messenger-based payment system captures 54% of China’s market, making it the market leader. It has a user base of 608 million monthly active users.

AliPay’s revenue is around $100 million. Focused primarily in China, AliPay’s reach is somewhat restricted.

Facebook as a alipay

Facebook has a global reach (except in China), and with a user base of 2.41 billion and an assumed penetration rate of 70%, Facebook’s Libra could be three times the size of AliPay from the get-go.

We have not even scratched the surface with what happens when people who are unbanked join in because the ease and comfort of Facebook’s messenger-based settlements.

If Facebook’s Libra was to replace Bitcoin!

How can we leave bitcoin from our conversation when we are talking about cryptocurrencies? After all, it is still the king of cryptos.
Facebook as a bitcoin

While bitcoin is truly decentralized and Facebook’s Libra is a lousy copycat of a cryptocurrency concept, that will not stop Facebook’s Libra from becoming a household name.

This is because even at 41 million wallets, bitcoin’s adoption represents less than 1% of the total potential customers that could benefit from bitcoin.

On the other hand, with a direct access to over 2.5 billion people through Facebook, Instagram and WhatsApp, in a matter of months Facebook’s Libra could surpass hundreds of millions of accounts.

When it comes to technology adoption, numbers really matter.

One thing that is working bitcoin’s favor is the speed at which wallets are getting created. There were only 3 million wallets last year in July, and by July of 2019 we have over 41 million. That’s more than ten times the number of wallets.

Even at under 4% growth from 2018 to 2019, Facebook added approximately 90 million users.

In spite of flaws, breaches and plethora of issues, Facebook just marches on solely on the power of its numbers.

It sounds ridiculous, but it could be worse

facebook users volume

Imagine if and when Libra becomes functional and people are able to settle payments through its messenger, what Facebook would do to the 1.7 billion plus unbanked individuals around the world.

And as we have stated throughout the article, we have not considered the nonoverlapping user base on Instagram and WhatsApp who can be made to use Libra quite easily to the mix.

Think for a minute as to how powerful Libra could become when:

  • Over 2.5 billion users from Instagram and WhatsApp users start using Libra
  • 7 billion unbanked start receiving banking services through Facebook’s messenger with Libra
  • What if Facebook’s Libra gets integrated with other online sites, like eBay, to compete with Amazon. Integrating cryptocurrency reduces the cost (like credit card charges, etc.) and may help other shopping sites to compete with Amazon
  • Credit card companies charge anywhere from 1% to 3% on transactions. These costs eat into the profits of sellers. Integrating a messenger-based payment system could eliminate the use of credit cards and the installation of POS systems

All of these real issues that could be solved by Facebook Libra will draw more people to it.

And there you have it, a partial list of why everyone is scared of Facebook’s Libra project.

Thank you for reading the article.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.


IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

About the author

RK Reddy holds two Masters degrees, one in Accounting and another in Business Administration with over 15 years of experience in the financial services industry.

Read more about the author here.

 

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All Roads Lead to $100K Bitcoin: Various Perspectives that Support $100K BTC

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Bitcoin to 100K

Bitcoin to 100K

There are a lot of theories in the crypto space that argue that Bitcoin will reach $100,000 before the next halving.  Some even argue that we could reach that price point before the end of 2021.

Here we have compiled a few perspectives that support a higher price point for Bitcoin.

IF we missed any, please let us know and we will be glad to add it for others to read.

Bitcoin’s ability to reward savers

If you saved $100,000 throughout 2017, today its value would have been $94,000, a total loss of 6% due to inflation. That is without considering the fees and hidden charges that institutes charge.

Even if you invested in the S&P 500 for 12 months at $8333 each month throughout 2017, your portfolio value today would have been $110,000.

If you saved $100,000 in Bitcoin throughout the 2017 (prices ranged from $920 through $14,000 during Jan 2017 through December 2017).  For the purposes of this comparison we are using the last week prices from each month as available on Coinmarketcap historical snapshots.

$100,000 invested in equal amounts throughout 2017 would look something like this.

Bitcoin to 100K

Since 2017, Bitcoin price has crashed and rebounded.  At the lowest point of the crash of $3000 per bitcoin, your portfolio value would have been $144,000.

In today’s average price of $16000 per bitcoin, your $100,000 savings would have been worth $770,000.

Due to its increasing demand and reducing supply, Bitcoin is expected to reach $100,000 in the next 4 years. Some models show that bitcoin will be worth $1 Million by 2030.

Only time will tell us whether bitcoin reaches these prices or not, but point being, no other asset of any class has crazy growth predictions like Bitcoin has.

Stock-to-flow ratio

According to Plan B, Gold had the highest stock-to-flow (SF) ratio of 62.  That is, it will take 62 years to produce the gold that is currently in the market.  In other words, you cannot willy-nilly inflate the supply in a year or two due to how scarce gold is and how difficult it is to find and mine it.

Current SF for Bitcoin is 25, however, by the end of 2020 or 2021, this could jump to 50.  By the next halving in 2024, Bitcoin could surpass the SF of gold.

According to Plan B, “The predicted market value for bitcoin after May 2020 halving is $1trn, which translates in a bitcoin price of $55,000. That is quite spectacular. I guess time will tell and we will probably know one or two years after the halving, in 2020 or 2021. A great out of sample test of this hypothesis and model.”

However, following the trajectory of Plan B’s SF analysis, Bitcoin could easily reach $1 Million dollars by 2030, according to some commenters.

Stimulus and unlimited printing of fiat

COVID has exposed another flaw in the fiat system.  It is that governments can print as much money as they wish whenever they wish to do so.

Whenever governments resort to simply print money without having a basis in asset value or growth in GDP, it erodes the value of the fiat in circulation.

This is what happened to Argentina, Venezuela, Zimbabwe and more.  

The US dollar has lost over 99.97% value since 1900.  For instance, whatever you could buy with $1 in 1900 will need $31 today.

COVID has added salt to the wound for fiat.  It exposed the blatant fact that governments can and will print money to their whim without regard to the inflation and impact on savers.

This increased supply in fiat helps stock market and market liquidity which in itself helps people who are invested in the stock market and other vehicles which is generally the wealthier part of the society.

Other factors strengthening the crazy Bitcoin price predictions

  • Institutional FOMO, for instance, Square, PayPal, Grayscale, etc., entering the market
  • Easier onboarding of new retail investors
  • Greater technologies and DApps being built on Bitcoin 
  • Great DeFi services to lend and borrow money
  • Globally accepted single denomination that does not need to be converted in the future (with enough places accepting bitcoin)

What other factors do you think will contribute to Bitcoin’s shooting past the $100,000 barrier?

Let the FOMO begin…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

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Crypto Roundup: All Your YouTube Influencers in One Place

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Crypto Roundup

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place.    

Worried about missing updates from your favorite YouTube crypto influencers?  

Welcome to the Crypto Roundup.  

On this page, we will post a quick summary of the videos from some of the most popular YouTube crypto influencers.

Ivan on Tech  Altcoin Daily

Crypto Zombie Box Mining

Ellio Trades Lark Davis

Data Dash Bitboy Crypto

MMCrypto Chico Crypto

Altcoin Daily

Video title: Bitcoin Will Be OVER $20,000 By Christmas 2020! BIGGEST WEALTH SHIFT OF OUR LIFETIME! Cryptocurrency

Date: 19-Nov-20

  • World’s biggest wealth shift of our lifetime is happening right now and no mainstream media is talking about it, except CNBC.

  • Preston Pysh predicted on August 26th that: “Bitcoin should be reaching its all time high by Christmas.”

  • If you are looking to buy a dip, there may not be one.
  • Ricardo Salinas Pliego, a mexican billionaire, has just revealed that 10% of his liquid assets are into bitcoin.

Lark Davis

Video Title: STOCKS HIT NEW HIGHS! WILL COVID VACCINES LEAD TO MEGA PUMP IN 2021? [Are You Ready?]

Date: 19-Nov-2020

  • Stock markets and bitcoin pumps higher on the news of the second successful covid vaccine.
  • There could be more chances for the new stimulus. Means more inflation, more debt and simultaneously pumps stocks, gold and bitcoin.

Crypto Zombie

Video Title: BITCOIN $18.5k TOP!!?! DON’T BE FOOLED!! HODL FOMO BEGINS!!! $TRILLIONS FLOOD!!

Date: 18-Nov-2020

  • Overall sentiment of Bitcoin has changed drastically from ICO craze in 2017 to a time where people are FOMOing to own more bitcoin.

Ivan on tech 

Video Title: BIG WARNING TO ALL HODLERS!!!!!!!!! DO NOT GET REKT!!! BITCOIN $18,500 REJECTED – NOW WHAT?

Date: 18-Nov-2020

  • Ivan expects bitcoin to shoot past $20K resistance before end of this year, giving it 85% probability

Chico Crypto

Video Title: World’s Most Powerful Turn BULLISH on BITCOIN

Date: 19-Nov-2020

  • All those who hold big bags of Bitcoin will come out of the shadows to talk up the Bitcoin rally, a $20K bitcoin could be on the cards before the end of this year
  • Ethereum mining could act as a big catalyst for Ethereum’s price
  • Big companies like google could play a bigger role in mass adoption of crypto

Let the FOMO begin…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Lessons from the Veteran HODLERS to the Newbies!

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Lessons in Crypto

For all those who entered the crypto market after the 2017 bull run – here are few lessons from the HODLERS from the last bull run(s).

This is our attempt at making all you newbies aware of the mistakes veteran cryptoers did.

Let’s get started…

Don’t FOMO in to all the hype

FomoIt’s hard not to FOMO in crypto.  The trick is to make sure you don’t lose your shirt in crazy bets.  Always limit your bets to what you are comfortable losing.

The common ways you can become victim of FOMO are:

  • Following your favorite YouTuber without actually doing your own research on the project.
  • Investing into projects at the top.
  • Believing in promises of 100x or 1000x without any substance behind those claims.

HODLing far too long

Remember why you are into crypto – to make the money.

Never fall in love with your crypto, and HODL the tokens even when they are 10x and more.

Have a strategy to take your capital out before you become a HODLer.  

If you believe the project really has what it takes to go beyond 100x and more, just sell in instalments so as to not miss the ride.

One of the best ways to HODL is to take your capital in full and profit in tranches.

This rekt story will give you a right perspective of what it looks like, it’s one of many:

Don’t put all your eggs in one basket

Never go all in on one project. No matter how strong the project may look, even the projects with strong fundamentals don’t do well sometimes. 

And, you will be kicking yourself watching other projects go up and your portfolio just doesn’t seem to make a move.

And don’t over do it and have a portfolio with over 100 projects either. It is very difficult not to have invested in more than 15 projects but anything less than 20 is a good way to go, in our opinion. 

Put aside the share of Profits for Taxes.

One way you can get a good night’s sleep is by paying taxes. 

Always keep a habit of putting aside a % of your profits in USDT or other stable coins, as a reserve to take advantage of market volatility and also to meet your tax obligations. 

Exchanges are more evil during bull run

Foreign ExchangesDon’t trust exchanges. Yes we already know that, but they play more games during bullrun, some intentional and some technical. 

Many exchanges tend to go under maintenance when the prices shoot up too high too soon (Coinbase?), and you can’t sell. 

And the shady exchanges scam out before you know.

Regulators seem interested when the market cap of these projects goes through the roof, which then adds FUD around the project crashing the prices.  

Exchange may freeze funds pending investigations when such issues arise.

Take for example OKEx. Users are unable to withdraw their assets from the exchange for almost a month now, not certain if they ever will, and all that started with the legal dispute.

Never fall for Arbitrage gains

Arbitrage is when you buy in one exchange at a lower rate and sell on the other for a higher rate to take some profits. 

Some shady exchanges show a lot higher prices than the other genuine exchanges and when you deposit your assets to sell at those prices there won’t be actual volume to execute the trade. You may be stuck with either a high fee for withdrawal or other funky rules to take your own money out. 

Remember, there is no free Giveaway

Free CryptoScammers rise with the rising market.  

When the crypto market buzzes with all time highs – scammers cash in big time on newbies.

The most lucrative scam in crypto is ‘Free Giveaway’. Whether it be through YouYube ads or discussion groups and wherever they can get your attention.  Read this article on various sophisticated scams that are being deployed.

We hope these lessons help you through your trades and crypto life.  Stay safe and always DYOR.

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

Continue Reading

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