Facebook finally reveal the future of digital money and currency: Libra
For anyone who has been working in the digital marketing and cryptocurrency space for a while, many will have been waiting for official news of what Facebook had planned for their own entrance into the space.
What do Facebook offer with Libra?
A brand new global currency based on cryptocurrency and blockchain technology.
So where are they with it all and does it have issues?
Facebook have been cleverly planning but still have issues to be resolved.
As usual Facebook have made a very calculated and clear objective to enter the online currency space.
They want to offer 1.7 billion people without access to a bank account the possibility to pay for things and transfer money online using Facebook or WhatsApp.
This desire will undoubtedly leave compliance issues to be fixed, but Facebook say that since the Cambridge Analytics issue, their subsidiary company Calibra will keep financial and social data strictly separate, we are told.
As stated by Rory Cellan-Jones in the BBC article one of the big challenges will be getting the ‘Know Your Client’ (KYC) anti money laundering process approval for countries without formal identity cards, like those in the US and UK.
And it is hoped, by those who are seeking to protect user sensitive user data, that insurance agents, advertisers etc do not get access to this sensitive data such as spending power to target ads to different segments based on their ability to afford things or their spending frequency (we all know certain ladies cannot resist a nice pair of shoes at the start of the month!).
As my mum always says, ‘if it wasn’t for women, the economy would collapse, and she is not far from the truth’….
How the issue of transactional and buyer behaviour data manifests will be interesting to see, but I can see many an internet marketer and brand feeling like they may have another method to tap into the best converting people with specific ads and content once this roles out by 2020.
Facebook on a global money mission:
Facebook’s David Marcus explained to the BBC that it is about giving billions of people more freedom with money and “righting the many wrongs of the present system”.
Why are big competitors so keen to work with Facebook?
You may think that the likes of PayPal and VISA (no news on Stripe at this stage) would look to lock out the newcomer that wields such latent potential.
But the reality is that these companies do not want to miss out on an increased ability to reach more buyers and offer more transactions in emerging markets.
And perhaps cynically, and more importantly, get potential access to tonnes of useful personal data, that may be served to partners.
Already Facebook are in the process of arranging partnership deals with PayPal, Mastercard, VISA, Uber and Lyft and the large venture capital firms, partners will be paying Facebook around $10 million each for each node.
Facebook Global Dominance
So with the Globes’ big players already claiming their stake, this really could shape up to be the start of some kind of modern money system.
And with such expertise behind the coalition of the future of money, the issues that Facebook currently have over privacy and data, may well be ironed out by being part of a trusted network and club.
Is the program designed to make money from transactions?
It is thought that the small transactional fees will be a positive gain for offering the service, but expected that the real power is keeping people on Facebook to make money out of advertising revenue.
So why choose a cryptocurrency to base Libra on?
Some say that it is the future of currency and also has a fantastic PR element to it currenctly
But the blockchain has advantages in terms of its distributed ledger basis, it also was found to be a little slow in the base of Bitcoin for really fast constant transaction.
Facebook claim that the new Libra Cryptocurrency will offer higher speeds for instantaneous transactions and not rely on energy hungry mining activities to harvest the new coins, reducing the global impact that Bitcoin mining is perceived to cause.
Stay tuned for more news on the Facebook Cryptocurrency coin Libra, as a marketer I am fascinated to see where it takes us soon!