If Facebook owns a cryptocurrency, it will give the additional $19 billion revenue by 2021, reported in CNBC.
Ross Sandler, the Barclays senior internet analyst, wrote an article that Facebook’s cryptocurrency coin could provide a new revenue share aside from advertisements for the company.
Recent Issues On Facebook
In the last year, Facebook (FB) business model faced problems from politicians, consumers, and advertisers. Its shares also influenced during these days. Cambridge Analytica, the British political consulting company, gathered data of 50 million FB user’s data without their permission. Even though, the company income increased nearly 30 percent the current year.
If the investors abruptly become less pardoning, introducing new payment methods will provide FB a lifeline. FB’s cryptocurrency could create a new earning option.
Cryptocurrency Adoption Problems
According to The New York Times and Bloomberg, Facebook is in the process of preparing a cryptocurrency for a universal payment system. This virtual currency will tie up to the traditional fiat currencies and available via its messenger “WhatsApp.” Till now the firm not commented on these reports.
The major problem in cryptocurrency adoption is price volatile. But FB’s virtual currency, “stable coin,” would expect less attractive because of its rigid price like U.S. dollar.
Facebook Credits
Facebook’s payment model is almost ten years back. The Menlo Park, California located firm, invented a digital currency in 2010 named “Facebook Credits.” It is similar to today’s cryptocurrency. Users would top up these digital coins with fiat currencies and used those coins for App purchases. Users required a credit or debit card to prepay the coins.
Sandler pointed, FB faces the major problem is interchange cost, which is so many effects the profit of the business.
Sandler also pointed out that FB’s cryptocurrency project is bigger than the previous one. The Barclays indicated David Marcus, the head of FB’s blockchain and crypto panel, who was earlier president of payment company PayPal. The analyst noted that Facebook recently hired several employees from blockchain company Chainspace.
Today both FB and digital currency matured. Now, the company has more potential users, and more popular apps such as FB messenger, WhatsApp, and Instagram. The firm’s a new cryptocurrency plan can re-strengthen business strategy.
