Shall GlobalCoin (Facebook’s new cryptocurrency) Fail Or Not?

Cryptocurrencies – digital currency that can only be transferred electronically and is kept safe via cryptography. Meaning, the sender-receiver personal information is kept safe and validated to eliminate possibilities of fraud and embezzlement. It has been a global phenomenon worldwide since 2017. Thousands of cryptocurrencies have been launched since then but very few have survived. The primary reason behind it is the drastic fall of bitcoin and the remaining cryptocurrencies turning out to be scams. However, those days are long gone and people are now more cautious with their investments in cryptocurrencies. There have also been some major changes in ICOs (initial coin offerings) to avoid scams. But the crypto market is still not regulated properly which is why significant risks remain for the investors.

So, who’s next in line?

As of recently, there have been rumors of a social media giant launching its own cryptocurrency flooding the internet. It has been reported that Facebook has been holding meetings with major cryptocurrency exchange platforms like Coinbase (USA’s biggest cryptocurrency exchange) and Gemini. (owned by the Winklevoss twins) The facebook cryptocurrency is rumored to be called ‘Globalcoin’. All these talks between Facebook and other exchanges aren’t being disclosed at the moment and the exchanges have declined to make any comment regarding this issue.

The Winklevoss twins have been known to be engaged in legal battles with Zuckerberg over Facebook, but have agreed to engage in talks regarding the new Facebook cryptocurrency.

While bitcoin is being blamed for disrupting the current financial system, ‘Globalcoin’ is going to be in line with the current financial system & regulations. Zuckerberg is going to try his best to build maximum trust regarding his cryptocurrency. Globalcoins might be valued as a major currency, probably the US dollar. Meaning 1 US dollar will have an exchange rate of a certain amount of bitcoins. Apart from this, Facebook is also thinking of partnering up with brokers, merchants and other financial firms to get a head start in the crypto market. Government and financial regulators are also expected to help Facebook for the launch and regulations of their coin.

Around 2 billion people using the same currency would really put a positive impact on the global economy which might be bigger than that of Bitcoin’s.

Is this the end for Bitcoin?

Referring back to a research published on May 28 by cryptocurrency analytics firm Diar, it is being expected that Globalcoin might fail to gain traction due to the the user demographics of the platform’s user base. Despite of Facebook being the largest social media platform in the world, GlobalCoin’s transition into an aging Facebook population is forecasted to be quite tough.

The research done by Diar shows that less than half of Facebook’s users are under the age of 35, whereas the number of retirees (age 65+) have doubled since 2012. Statistically, baby boomers are the group of individuals to have spent the least amount of money in bitcoins throughout history. So the chance of them being interested in GlobalCoin are far less likely.

According to Diar’s report, GlobalCoin shall not appeal to the younger nor the older facebook population, resulting in an instant failure.

The reason being, the older population not having the knowledge of cryptocurrency and the younger population not having enough money to save.

Apart from the aging user base, Facebook is also falling behind with the younger demography. From a report published from Pew Research Center, it can be said that Facebook has lost their dominance among the teen market compared to other platforms.

So, if Facebook’s own user base does not find cryptocurrency appealing then it is likely to fail like so many other cryptocurrencies which were once deemed as Bitcoin competitors. From what experts are projecting, Globalcoin’s release could fall flat and instead, provide validation for bitcoin and other established cryptocurrencies.