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Why Facebook’s “CopyCat” Coin should worry and excite true bitcoiners?

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CopyCat Coin

Facebook’s CopyCat Coin – What follows is an opinion piece.  Read it as such.
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Facebook recently announced that it will create its own cryptocurrency, called by various names by the media (some called it global coin, some called it Libra coin, others just FB coin).   

For our purposes, we will just call it what it is: CopyCat Coin.

Messenger PaymentsWe call it CopyCat Coin because using native app currency via messengers is not a new concept. In fact, China has been running trillions of dollars worth of commerce via messengers.  WeChat and AliPay apps handle quite a lot of financial affairs in China through messenger apps.

China gave a free hand to the internet giants to experiment with bringing financial transactions to the messaging apps, according to McKinsey’s report. This model works in China because Government has openly declared that it will monitor its citizens behavior via surveillance to grant them social scores. Surveillance is not seen as a threat by most Chinese nationals, in fact, they assume it. And Governments have a direct interest (sometimes financially) in these companies that operate in China, so the Government already has access and control of personal data, one way or the other.

It is a different story in western world.  

We still live in the delusion of privacy and data rights.  

While most of us know that it is a delusion that we created to make ourselves feel cozy, it was taken away from us when Cambridge Analytica news broke out and it was further wounded by the news about Facebook granting access to our personal information to other big companies, without ever disclosing it.


Doubling down the intrusion

Facebook garners over 2 billion users, that is about 50% of the world’s internet users.  It would have been higher if Facebook were to penetrate China, but we know that is not going to happen. The point is, when their CopyCat Coin comes into market, they are going to market it as a thing of convenience.

People will resist it initially, however, Facebook will lure them with heavy discounts, freebies, and even throw some free coins at its users to get them to try.

Conducting commerce through messengers is very convenient. People will forego their right to privacy for convenience. This is a fact and Facebook knows it.

When people are hooked to sitting on the couch and settling bills via messenger, they will happily grant access to their personal details, knowing quite well that this information is not going to be used for the world betterment.

When another scandal breaks out – it will not be about name and phone number, it will be about our credit scores, our social scores (which may not be openly declared like China did, it may be a covert operation) and pretty much everything.

This point was driven home by Paul Kocher in his interview with Mashable, [Our] medical procedures, personal relationships, health problems, bad habits, hopes, and fears are all reflected in how we spend money,” he continued. “If abused, this information can harm users in both obvious ways (e.g. job discrimination, etc.) and more subtly (e.g. showing offers for higher-interest credit cards or lower quality health insurance). Given this, the idea of combining Bitcoin’s theft mitigation and Facebook’s privacy seems particularly toxic for users.”

Why should this bother true bitcoiners?

bitcoinThe idea of decentralization is slowly seeping into the mass consciousness.

Media is doing an amazing job directing people’s attention to bitcoin’s price action but a small percentage of people are learning about what bitcoin is and how decentralization could change the social structure for the better.

Now, Facebook’s coin is going to sidetrack the decentralization conversation.  

We are sure that companies like Amazon will not freely let Facebook capture online market.  Imagine what Amazon coin will do to the market, if and when they create one? All it will take is for Amazon to say that using Amazon coin will grant you X% discount, and voila.  

Facebook may have a larger user outreach than Amazon, but from a sales perspective, Amazon is 6 times bigger than Facebook whose sales hovered around $40 billion, while Amazon at $232 Billion.

That could change, if CopyCat Coin catches on and succeeds to bring buyers and sellers onto its platform before the other players catch on.

All of this noise of the big players entering the ‘supposed crypto’ space, will stray away people who would otherwise had the opportunity to learn what decentralization is and why bitcoin was born. Without the right knowledge and insights into what bitcoin is and what it can do, the concept of decentralization may face the threat of fading away.

Not everyone looks at it that way, and that’s a good thing

While we focused on rather negative and cynical potentialities, not everyone thinks that Facebook’s CopyCat Coin is going to disrupt bitcoin’s progress.

In fact, they believe that Facebook’s entry only affirms the cryptocurrency market’s validity and further extends bitcoin’s reign as the king.

Caitlin LongCaitlin Long, one of the greatest influencers in the blockchain space, predicts that Facebook’s coin will only bring more attention to bitcoin.  In her words, “Here’s my biggest prediction: Facebook’s foray into cryptocurrency will end up benefiting bitcoin. It will take time, but Facebook will greatly accelerate the pace of teaching people about cryptocurrencies. And when this happens, more people will turn to bitcoin for one simple reason—bitcoin is scarce, while Facebook’s cryptocurrency is not.”

 

Teeka TiwariFinancial markets expert and crypto veteran Teeka Tiwari ecos Caitlin’s sentiments. He opined  as more people get exposed to crypto-like assets and functionality, they’ll understand how much more powerful bitcoin and ether are compared to JPM Coin and Facebook Coin.

Now, I know a lot of people are wondering whether JPM Coin or Facebook Coin will kill the rest of the crypto space. But the answer is, of course not… They’re just internal coins. They’ll only make the rest of the crypto space much bigger.”

The gist of the opinions of other financial and crypto veterans is that Facebook’s entry into the space is going to act as a catalyst for the overall crypto space in general and to strengthen bitcoin’s position in particular.

While we are of the opinion that the noise, hype and media coverage around these giants entering the space will deter the general public from becoming aware of the power of decentralization – others are of the opinion that it will do the opposite.  

We just have to wait and see which of those versions plays out, or something else entirely.

Thank you for reading this article.

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.

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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.

RK Reddy is an ardent fan of Blockchain and Cryptocurrencies. You can see the excitement about this new blockchain technology in every article on Cryptotapas.com. Sometimes this excitement leads to an overly optimistic view. Guilty as charged. RK Reddy says what may seem like an ‘overly optimistic expectation’ today may become an everyday norm in 5-10 years; look at the history of cars or airplanes, Blockchain and Cryptocurrencies belong to a similar frame of reference.”  Of course, that is just his opinion.

 

Crypto News

Crypto News Today #53

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A rather slow week in the crypto space.  

Bitcoin on track to $100,000 by 2025

A Bloomberg report titled “Bitcoin Trend, Adding Zeroes” predicts that $100,000 by 2025 is on track.  “Bitcoin could continue doing what it has for most of its nascent existence, appreciating in price on the back of increasing adoption, but at a slower pace as we see it. The first-born crypto has had a tendency to add zeros to its price from around $10 in 2011. It took about four years to go from $1,000 to $10,000 in 2017, so doubling that time frame for maturation could get the price toward $100,000 in about five more years. Or the new technology could fail, but our demand indicators are positive. With the exception of stable coins, the rest of the crypto market is subject to excess supply and competition,” report read.

Another company joins the $100 Million Bitcoin club

Stone Ridge created a subsidiary called New York Digital Investment Group (NYDIG) to act as the custodian of its own customers bitcoin.  The move was prompted by the growing demand from customers who were willingly investing 1% to 5% of their portfolio in Bitcoin.  Forbes reported that “Stone Ridge Holdings Group revealed NYDIG is acting as custodian of 10,000 of the parent company’s bitcoin, valued at $115 million at today’s price.” “The two largest funds currently managed by NYDIG are the $190 million Institutional Bitcoin Fund LP, disclosed in regulatory documents in June and the $140 million Bitcoin Yield Enhancement Fund LP disclosed in May,” the article revealed.

Coinbase lost 5% of its workforce, got over 1000 requests from FBI

coinbase best exchangeAbout 5% of the workforce left Coinbase due to its ‘no politics at work’ stance. At the same time, it has allegedly received more than 1000 requests from agencies, mainly FBI, regarding crypto transactions. While these news are unrelated – Reddit and other social media channels are flaring up with anarchists rhetoric calling crypto users to move away from the capitalists Coinbase. We are indifferent on the matter.

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

We have been tracking the most important news in blockchain and crypto space since 2017. You can check out all the chronicled news here.  

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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 News

Crypto News Today #52

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On ramps are being built to pave the world’s businesses to the blockchain. Latest in this trajectory is EY, one of the world’s big 4 accounting firms, who has built a solution to onboard businesses onto blockchain.

EY launches Ethereum Solution ONP

OpsChain Network Procurement (ONP) which is expected to help convert the procurement contracts into digital smart contracts and automate volume discounts/rebates has been launched by Ernst & Young (EY) on Ethereum Blockchain. EY is one of the Big 4 accounting firms in the world that has been eyeing to be at the forefront of blockchain technology and this ONP is a great addition to its forte. “EY OpsChain Network Procurement supports network-level business processes by moving those business processes outside of any single ERP system and into a shared blockchain-based smart contract. It builds upon EY experience with other procurement activities, such as software royalty calculations, where shifting to blockchain-based contracts has compressed cycle times by more than 90% and cut costs by 40%,” according to the press release.

KuCoin hack hauls $130 Million, creates a stir re: decentralization

KuCoin got hacked during the week for 100s of millions of dollars.  However, according to the KuCoin CEO Johnny Lyu substantial part of those stolen funds have been recovered. Over $200 Million in stolen funds have been recovered. While many crypto maximalists were furious at the fact that KuCoin and the projects supporting KuCoin were able to freeze the funds in the suspected accounts, some argued that the key tenet of blockchain and cryptocurrencies is the ability to be not shut down by an external force. Say what may – this recovery of funds has been welcomed by those who use KuCoin. In a clear twist of the plot, KuCoin was able to turn these things around and instill confidence in the exchange. The latest in this hack thriller is that KuCoin claims to have located the hackers and are now working with the authorities to take the legal action.

The man who called banking system a scam buys his first Bitcoin

The UK politician whose speech against the banking scam has been referred to by crypto communities, Godfrey Bloom,  has tweeted that he made his first purchase of Bitcoin. 

 

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

We have been tracking the most important news in blockchain and crypto space since 2017. You can check out all the chronicled news here.  

Consider subscribing to our newsletters to receive these news updates in ONE neat email per week along with other freebies that we give away once-in-a-while.

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 News

Crypto News Today #51

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This week people are reminded why Blockchain and cryptocurrencies are needed.  An expose by Buzzfeed reviewed the FinCEN files to show that major financial institutions have been assisting and facilitating illicit affairs to earn their fees.

$2 Trillion scandal shows why we need blockchain now

Standard Chartered, HSBC, Bank of America and many of the world’s biggest financial institutions have been secretly mining money in the form of fees for the world’s most dangerous individuals and entities.  “A huge trove of secret government documents reveals for the first time how the giants of Western banking move trillions of dollars in suspicious transactions, enriching themselves and their shareholders while facilitating the work of terrorists, kleptocrats, and drug kingpins,” reports Buzzfeed which ran an expose on the whole matter.  This reminds us one more time that the number one choice of criminals is not bitcoin or cryptocurrency which remain quite traceable.  Criminals use cash and also major bank accounts in broad daylight for their illicit affairs.

OCC issues clarification for banks regarding stablecoins

Office of Comptroller of the Currency issued clarification about banks holding cryptocurrencies, specifically, stablecoins.  Essentially, OCC gave greenlight for banks to hold stablecoins as long as they have 1:1 reserve.  “A bank providing services in support of a stablecoin project must comply with all applicable laws and regulations and ensure that it has instituted appropriate controls and conducted sufficient due diligence commensurate with the risks associated with maintaining a relationship with a stablecoin issuer. The due diligence process should facilitate an understanding of the risks of cryptocurrency and include a review for compliance with applicable laws and regulations, including those related to the Bank Secrecy Act (BSA) and anti-money laundering,” OCC letter clarified.

Cryptos are part of Visa’s future strategy

Digital assets and blockchain technology are going to be important parts of Visa’s future,” was the conclusion of an exclusive Forbes interview with Terry Angelos, SVP global head of fintech at Visa and Cuy Sheffield, senior director, head of crypto at Visa. “We are seeing significant interest in demand from crypto companies that want to work with Visa and connect their clients to our network of 60-plus million merchants,” Terry mentioned during the interview. Visa expects to be part of broader cryptocurrency adoption and also work closely with the world’s major banks in the CBDC adoption.

EU announces plan to regulate cryptocurrencies

European Commission is working on introducing a framework to regulate cryptocurrencies.  It could potentially take a year or more for these regulations to come out.  Investor protection and enabling innovation will be cornerstones of these proposed plans.  The new plan will mean that crypto-asset companies authorized by one of the 27 EU countries will be able to provide its services across all the other member states, according to the CNBC.

Gemini is expanding into United Kingdom

Winklevoss brothers brainchild, Gemini, is expanding into the UK as it received the electronic money license from the Financial Conduct Authority (FCA).  This move will allow residents of the UK to buy bitcoin using a debit card on the Gemini platform.  According to the article in Bloomberg, Gemini is looking to expand into Singapore next.  

Fun Fact: Norway, Blackrock and Vanguard hold Bitcoin, indirectly

The Norwegian Government Pension Fund, which owns 1.5% of MicroStrategy, effectively owns roughly 577 bitcoins. Blackrock and Vanguard also own shares in Microstrategy which in turn makes them indirect holders of Bitcoin. Source: Forbes.

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

We have been tracking the most important news in blockchain and crypto space since 2017. You can check out all the chronicled news here.  

Consider subscribing to our newsletters to receive these news updates in ONE neat email per week along with other freebies that we give away once-in-a-while.

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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