VeradiVerdict - Project Libra (Facebook's Cryptocurrency Network) - Issue #36
Hi, I am Paul Veradittakit, a Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing into blockchain companies and cryptocurrencies. I focus on early investments and want to share my thoughts and what’s going on in the industry in this weekly newsletter.
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In early 2018, Telegram, a messaging app with 200m active users, went out to raise a $1.2B ICO to build the next Ethereum with a smart contract platform that decentralized applications can be built on top of. The platform will feature distributed file storage, decentralized VPN and Tor-browsing services, other services for the decentralized web, and payments for p2p and micropayments.
The project ended up setting a record by raising a $1.7B ICO. Telegram has garnered investment from tier-1 VCs and much intrigue because it has a tremendous user base, a majority of the crypto community and early adopters already on the platform, and the ability to enable identity and wallet functionality.
Since the Telegram ICO, other corporations have followed suit with their own crypto projects such as HTC with HTC Exodus, JP Morgan with JPM Coin, and Samsung with their blockchain wallet. This week though, the most compelling corporate project was brought up by the Wall Street Journal and other media sources, the Libra Project by Facebook.
Facebook has been pretty quiet about what they are doing, but rumors are that the company is developing a blockchain and a cryptocurrency (stablecoin) that will integrate with WhatsApp, Instagram, and Messenger. The stablecoin could be pegged to a basket of foreign currencies held in bank accounts. Also mentioned was tying the coin to Facebook’s core ads engine, rewarding users for viewing ads and then purchasing goods.
The head of the project is David Marcus, who is the former President of Paypal. More than 50 employees are working on the project, including the Chainspace team which was acquired by Facebook.
With privacy being pushed by Mark Zuckerberg, Facebook will have to be cautious about promoting data sharing and connectivity. With a user base of two billion monthly active users, Facebook is in an advantageous position to enable coin distribution and adoption. Expanding into payments will help generate a new revenue stream for Facebook in regions where Instagram/Facebook shopping dominates the e-commerce market. With wallets, identity, payments, and a decentralized application platform, there is tremendous potential for this Facebook project and it’s worth keep a close eye on.
What do you think the Libra Project will initially focus on?
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