What is Cryptocurrency?
A cryptocurrency is a digital or virtual currency intended to function as an exchange medium. It uses cryptography to secure and verify transactions and control a particular cryptocurrency’s creation of new units. Cryptocurrencies are essentially limited entries in a database that no one can change unless specific conditions are met.
In the first quarter of next year, Facebook plans to launch its cryptocurrency. This summer, the company is expected to disclose more details about the currency before testing starts later in 2019. The currency, which is internally referred to as “GlobalCoin,” will be available at the launch in about a dozen countries, where it is expected to offer affordable and secure payments to people without the need for a bank account.
Before it can be launched, the currency will have to overcome numerous technical and regulatory hurdles. According to BBC News, last month Facebook CEO Mark Zuckerberg met with Governor Mark Carney of the Bank of England to discuss the planned digital currency’s opportunities and risks. Facebook, however, may have a tougher job in India, which has taken a hostile attitude toward virtual currencies. India is reported to be a key focus of the new currency, where Facebook hopes Indian workers will be able to send money home to their families using WhatsApp
The company has been discussing operational and regulatory issues related to cryptocurrency in talks with the U.S. Treasury, as well as money transfer firms such as Western Union.
We first heard about the cryptocurrency ambitions of Facebook last May, when it was reported that David Marcus, who previously served on the board of directors for Coinbase and was president of PayPal between 2012 and 2014, led the new blockchain division of the company.
Reports suggest that in an attempt to minimize volatility, the currency could be designed to be a “stablecoin,” with a value attached to US currency. However, even without the volatility associated with most cryptocurrencies, after years of scandals that have tarnished its public image, Facebook will still have a lot of work to do to get its users to trust GlobalCoin.