Blockchain engineers remain a highly sought-after resource. The proliferation of cryptocurrency throughout the past two years drew the interest of major corporate entities. Now, even as the cryptocurrency market itself cools, these corporations are adopting blockchain tech for their own use. Telegram’s ICO famously brought in nearly $2 billion dollars – and JP Morgan Chase & Co. (NYSE: JPM) announced their own ‘cryptocurrency’ to bolster their financial offerings. Meanwhile, Facebook appears deeply involved with a blockchain related project – although details are sparse.
Analysts suspect that the Facebook, Inc. (NASDAQ: FB) coin will be used to power an internal money transfer system. While this is, theoretically, the system behind many of the top cryptocurrencies – it makes little sense for a centralized system like Facebook’s messaging apps. Further, Facebook shows little interest in protecting the data privacy of their users – something that cryptocurrency is inherently designed to do. As such, the purpose of Facebook’s project remains in doubt.
The Mainstream Blockchain Blitz
Cryptocurrency fanatics eagerly await the entry of traditional corporations into the blockchain industry. In their belief, this will cause an influx of funding that will buoy prices across the market. Telegram’s ICO seemed a step in the right direction, as the messaging app is preeminently popular among cryptocurrency businesses. However, we are now seeing the other side of this coin. The announcement of JP Morgan Chase’s JPM Coin shows that big players do not need to work with established cryptocurrency projects to be active in the space. Instead, they can simply create their own ecosystem to circumvent the entire process.
Luckily for cryptocurrency projects, the initial entrance of traditional companies seems poised to miss the mark. JPM Coin is little more than a proprietary stablecoin – an attempt to apply blockchain as a solution to a problem outside of its scope. Originally touted as a Ripple-killer, further details revealed that the coin would not be available to the general public. Instead, JP Morgan believed the coin would be used by the financial world to facilitate inter-corporation transfers.
Facebook’s Cryptocurrency Business Model
The new Facebook cryptocurrency will allow WhatsApp users to transfer money easily within the messaging app. However, as the system will be entirely under the control of Facebook, there does not seem to be any advantage to using blockchain technology. A direct money transfer system like Venmo or PayPal would serve the same purpose without the considerable effort spent on decentralizing a blockchain. As such, there is a high chance that further details will show a more nuanced approach. However, it is entirely possible that Facebook is chasing the blockchain boom and looking to capitalize on the buzz surrounding the technology – despite it serving no major logical purpose for them.
Article By: Adam Stone