Facebook Coin: How to Invest in Libra, Facebook’s New Cryptocurrency

What is it?

Facebook’s new cryptocurrency is called Libra, after the Roman unit of measurement used to mint coins. (Download the white paper here.) For blockchain investors, this is news to all. Talk about general acceptance: Facebook’s reach is so great that it could become the new world currency overnight, just like the dollar and the euro.

Here’s what we know.

It’s a stable one. Scales are a value system linked to different currencies. This means that the price does not fluctuate like bitcoin’s, but it is also not tied exclusively to the dollar.

It’s a very large and very secretive team. More than 50 engineers are working on the project, which is strictly confidential and requires special key cards to enter the building.

They want to trade it on the stock exchange. Facebook’s team is in talks with digital exchanges about taking Libra public. This means that it is not just linked to Facebook, but is a real currency that can be bought, sold and traded.

The expected completion date is 2020. In talks with the exchange, Facebook said it plans to launch the program in the first half of 2020.

It will be at least partially decentralized. By partnering with exchanges, Facebook is signaling that it won’t be strictly centralized. By using the blockchain, Facebook is indicating that it is not a gaming currency for Facebook users only.


  US dollars Bitcoin scale
Good job. Payments, taxes Investment, speculation Digital payments
A stable price? Yes No I hope so,
Supported by Government Minors Facebook
Tender Unlimited Corrected by Unlimited
A good long-term investment? No Maybe. No (but see comment below about FB shares).

How it works: New type of super money

You can imagine Mark Zuckerberg’s desperation: His company is under fire from the government, while governments are using his company to spread their propaganda. You can understand why he would be willing to form a new kind of super money outside of government.

In a blog post titled Privacy-Focused Vision for Social Networking, Mark Zuckerberg announced that he plans to move the Internet toward private, secure and encrypted conversations. If these words sound familiar, it’s because bitcoin was also designed as a private, secure, and encrypted means of payment.

Staff. While Facebook today resembles a digital marketplace, Zuckerberg said the new focus will be a digital living room where you can have private conversations with friends and family without fear that online comments will haunt you later.

Of course. Zuckerberg said Facebook users should be able to communicate privately without fear of being spied on by hackers, criminals or the government (or, I might add, by Facebook itself). And, he added, we all expect to be able to make things like payments privately and reliably. (Underlining added.)

It’s encrypted. How can we guarantee this confidentiality and security? With end-to-end encryption, which he says is already built into Facebook-owned WhatsApp. The encryption, Zuckerberg said, is decentralized. What else is being decentralized? I think you know that.

With his announcement, Zuckerberg is paving the way for a new kind of Facebook payment system that is private, secure and encrypted. If done right, Facebook will become a global player in financial services and the global economy.

To understand why, let’s compare Libra to other global payment methods.

Facebook vs Tencent

China is ahead of the US in mobile payments. While the US has Apple Pay, Google Pay, PayPal, Square and a dozen other payment systems, China has two: Alipay and WeChat Pay. These two have become the Mastercard and Visa of the Chinese payment world.

WeChat Pay is owned by Tencent, a major Chinese conglomerate, and is integrated into the popular Chinese social media platform WeChat. Like Facebook, WeChat has an extensive network of brands and publishers that host their own WeChat pages, and with WeChat Pay, they can easily accept payments.

Think of it this way: When was the last time you bought something on Facebook?

As you can see in this video, WeChat Pay allows you to make purchases in stores and restaurants by simply scanning a QR code. Imagine being able to pay at almost any checkpoint or website just with your Facebook app (not to mention WhatsApp or Instagram, which are also part of Facebook).

Libra Pay will differentiate itself from WeChat Pay by using its own decentralized cryptocurrency. Payments can then be truly private, secure and encrypted than with traditional payment systems (such as Mastercard and Visa). It’s like Facebook minting its own money: a real Facebook coin.

Facebook vs. credit cards

Paying with credit cards on the internet is a big deal. At each site, you have to re-enter your credit card, you have to manually pull out your credit card to verify the three-digit code, you have to renew your credit cards when they expire, and you have to pay interest when you have a balance.

Scales can be a huge improvement over credit cards because you simply plug them into your bank account, convert your money into scales, and then make a payment that the recipient can immediately return in dollars or keep in scales.

Today, for example, you pay with an Uber credit card, with a 2% surcharge going directly to Mastercard or Visa. With a decentralized currency, you can call a driver through the Facebook app and pay him directly, getting rid of both credit cards and Uber :

This has huge implications, as you and the driver may decide to keep more of your money on the balance sheet, which would maintain its value against the dollar. As we explain below, Facebook’s value is likely to rise (this could be a good time to buy Facebook shares).

Facebook vs Cash

China has become an almost cashless society: Alipay and WeChat Pay are so widely used that the Chinese government needs to remind merchants to always accept cash. According to the Wall Street Journal, Alipay and WeChat Pay are even used by merchants.

In the digital age, paper money is terrible. Paper money is dangerous (it can be stolen if you carry it). Paper money is inconvenient (if you leave it at home, you can’t buy anything). Nobody uses paper charts. Why are we still using paper money?

Can scales even replace paper money, as Alipay and WeChat Pay have done in China? That’s how it can happen.

The practice of crypto-currencies. The challenge with digital currencies is to make them so simple that even your grandfather can use them. Since your grandfather is a major target audience for Facebook, the scale can open the floodgates of digital money to grandfathers everywhere.

The new digital payment standard. Facebit (sorry, Scales) could initially be used to pay within Facebook, but eventually as a currency with which you can buy anything online. What we’re describing here isn’t just another payment system like Apple Pay or Venmo – it’s a real currency that can be used instead of dollars.

A new global economic power. By creating Facebook’s new cryptocurrency, Zuckerberg is enabling traditional public currency. And by pegging to a basket of foreign currencies (not just the dollar), it spreads its risk.

Who would have thought that Facebook, with all its centralized power, could become the new model for decentralized payments? Soon he may be called Mark Zuckerblock.

How to invest in scales

While details have not yet been confirmed, it is likely that Facebook will use its new currency for payments within the Facebook platform. When not linked to the Facebook platform, investors can invest in Libra by buying and trading on digital exchanges.

Here, savvy blockchain investors can learn from the thousands of altcoins launched over the past few years.

The value is determined by the users. Blockchain is for people: The more people use blockchain, the more valuable it becomes due to network effects. Facebook is one of the most valuable networks on the planet, giving its currency a potentially huge valuation (if it can convince enough people to use it).

Facebook’s stock is likely to appreciate in value. Because scale is a digital currency with a stable value, like the dollar, the value of the new economy will likely translate into Facebook’s share price. In other words: For every dollar invested in Libra, a dollar must be invested in FB stock.

There are many business opportunities. While we tend to be fans of investing in blockchain value (buying and holding), there will be plenty of trading opportunities (buying and selling), including arbitrage against other stables and other global currencies. Trade will be an area rich with opportunity, especially to begin with.

Your 401(k) scale: The Dream is an automated platform that, for example, takes $100 out of your bank account every month and invests $10 in Libra and $90 in FB shares. This will diversify ordinary investors in digital currencies (10%) with the global equity market (90%).

The beginning of the next wave: If Facebook’s new currency catches on, we can expect other tech companies to follow with their own digital currencies. In general, the companies with the most network effects get the most value (think Google, Twitter, Apple).

Blockchain is about people. Facebook, with its focus on connecting people, is in an ideal position to become an overnight blockchain leader.

For the latest information on Libra, as well as great investment ideas, subscribe to our weekly Bitcoin Market Journal newsletter, because it’s free!

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