Apart from a spike in Bitcoin’s popularity at the end of 2017, and its subsequent crash, cryptocurrency has failed to bring its promised benefits to the masses. Facebook could seriously challenge the current payment hegemony, no thanks to the site’s 2.3 billion users, WhatsApp’s 1.5 billion and Instagram’s 375 million.
Even more so, seeing that some of the Libra founding partners include big names such as Visa, Mastercard, PayPal, Uber and eBay. Together with these partners, Facebook has the power few financial institutions have to kickstart a crypto revolution.
Imagine this scenario. A brand you like on Facebook releases a new product. With no more than a few clicks you’ve purchased it with your Libra cryptocurrency, without having to take out your credit card to fill in details. The purchase has been fulfilled through the Calibra digital wallet, created for Libra, and you did not have to leave Facebook once.
As much as this might be a convenience for the user, it’s Facebook reaping the benefits. Not only does it increase the functionality of its site to herd users even more into its walled garden, but the company, of course, gets a small cut of the purchase. Plus, these purchases dramatically increase the already vast amount of data Facebook has gathered on their users - a fact that have regulators more than a bit worried.
But while e-commerce facilitation could drive the use of Libra, perhaps more significant is its use for microtransactions. While we’ve seen the use of mobile money transfer via the likes of M-Pesa and SnapScan, Facebook - through WhatsApp - will be unlocking a world were paying someone is as easy as sending an image.
If you have the person’s number, you can pay, and taking into account the popularity of WhatsApp not only in Africa, but also India, Europe and South America, this could just be Libra’s killer application. Facebook was quick to point out that Libra could be the saving grace for the 1.7billion unbanked in the world.
For publishers, the use of Libra could indeed be a life line. If paying a R99 subscription is deemed too much for readers to consider, how about a measly R1 to read an article? The same can apply to crypto donations to any type of creators, artists and especially musicians, who seemed to have received not much more than exposure through YouTube, Spotify and SoundCloud.
If there is a valid concern, it’s that of security in a time where, when it comes to hacking, it’s no longer “if” but “when”. One could imagine that Facebook users would feel a lot different if there’s actually money on the line and not simply a breach of personal details.
Also, will there be an uptake of Libra if the Facebook brand reaches a level of toxicity where users (and legislative bodies) are simply not comfortable with trusting Mark Zuckerberg with even more of their data?
Between now and 2020, expect a lot more speculation, hype and far more Libra announcements. But, taking into account the size of Facebook’s communal user base, and its Libra partners, it would take a brave man to dismiss this as just another cryptocurrency. Libra is a game-changer.
Charlie Stewart is the chief executive of Rogerwilco.