Facebook Reportedly Talking to Exchanges About Listing Its New Cryptocurrency

Apparently, Facebook, Telegram and Signal are all working on developing their own cryptocurrencies with the idea being to allow users on these platforms to make payments to each other using these new tokens/coins, with Facebook being the furthest along the development path.

According to five anonymous sources that talked to The New York Times, Facebook is "working on a coin that users of WhatsApp, which Facebook owns, could send to friends and family instantly." Per this report, four people said that Facebook's project is "far enough along that the social networking giant has held conversations with cryptocurrency exchanges about selling the Facebook coin to consumers." Three people said that Facebook has more than 50 engineers working on this project.

This latest report about Facebook's involvement with crypto mostly confirm earlier reports by Cheddar and Bloomberg in December 2018.

According to Cheddar's report (published on 13 December 2018):

"In recent months, the world’s largest social network has been quietly trying to recruit product managers, engineers, academics, and legal experts with experience in cryptocurrencies and payments, according to people familiar with the effort. Nearly 40 employees — including several former PayPal execs — work in Facebook’s ($FB) secretive blockchain group, and the company recently appointed a head of business development to oversee acquisitions and deals in the space. Since officially forming its blockchain group just eight months ago, Facebook has sent staffers to crypto conferences around the world to recruit researchers, cryptographers, and top academics in the field. At a private dinner Facebook hosted during a recent crypto conference, one attendee told Cheddar that Facebook employees pitched the idea of creating a decentralized digital currency for the social network’s 2 billion users."

And according to Bloomberg's report (published on 21 December 2018):

"Facebook Inc. is working on making a cryptocurrency that will let users transfer money on its WhatsApp messaging app, focusing first on the remittances market in India, according to people familiar with the matter. The company is developing a stablecoin -- a type of digital currency pegged to the U.S. dollar -- to minimize volatility, said the people, who asked not to be identified discussing internal plans. Facebook is far from releasing the coin, because it’s still working on the strategy, including a plan for custody assets, or regular currencies that would be held to protect the value of the stablecoin..."

However, The New York Times article says that according to "three people briefed on the plans," Facebook is "looking at pegging the value of its coin to a basket of different foreign currencies, rather than just the dollar," and that Facebook "could guarantee the value of the coin by backing every coin with a set number of dollars, euros and other national currencies held in Facebook bank accounts."

And since Facebook is currently "overhauling its messaging infrastructure, which would connect" its three messaging apps, Messenger, WhatsApp, and Instagram, once this integration is done, it would allow Facebook's new cryptocurrency to reach "across the 2.7 billion people who use one of the three apps each month."

The New York Times article goes on to say that "Facebook employees have told the exchanges that they are hoping to get a product out in the first half of the year."

Eric Meltzer, a co-founder crypto-focused venture capital firm Primitive Ventures, reportedly had this to say about the efforts by these three major messaging platforms to create their own cryptocurrencies:

“It’s pretty much the most fascinating thing happening in crypto right now. They each have their own advantage in this battle and it will be insane to watch it go down.”

On Wednesday (February 20th), Mark Zuckerberg, the Chairman and CEO of Facebook, released a video of a recent discussion he had with Harvard Law Professor Jonathan Zittrain, during which Zuckerberg said that he was considering the idea of making Facebook more decentralized by implementing some kind of blockchain-based user authentication system.

The issue of decentralization came up when Professor Zittrain asked Zuckerberg his thoughts on Solid, a new project led by Professor Tim Berners-Lee, the inventor of the World Wide Web, that is focused on the idea of "true data ownership." Under this protocol, user data is decoupled from apps and held in some kind of "locker" that is under the user's control, which means the user controls who can access this data and also the user is able to avoid the problem of vendor lock-in.

Zuckerberg replied:

"So, I think it's quite interesting. You know, certainly the level of computation that Facebook is doing and all the services we are building is really intense to do in a distributed way... I think the more interesting questions there are not feasibility in the near term, but are the philosophical questions of the goodness of a system like that.

So, one of the things that I've been thinking of a lot is a use of blockchain that I'm potentially interested in, although I haven't figured out a way to make this work out, is around authentication and basically giving access to your information to different services, basically replacing the notion of what we have with Facebook Connect with something that is fully distributed...

Basically, you take your information, you store it on some decentralized system, and you have the choice of whether to log in to different places, and you are not going through an intermediary, which is kind of what you are suggesting here in a sense.

OK, now, there's a lot of things that I think would be attractive about that... But let's look at the flip side... Question is if you have a fully distributed system, it dramatically empowers individuals on the one hand, but it really raises the stakes, and it gets to your questions around what are the boundaries on consent and how people can really actually effectively know that they are giving consent to institutions. In some ways, it's easier to regulate and hold accountable large companies like Facebook or Google because they're more visible, they're more transparent than the long tail of services that people would choose to interact with directly. So, I think this is a really interesting social question...

I think if you are doing fully decentralized Facebook, that would take massive computation, but I'm sure we can do fully decentralized [user] authentication if we wanted to. I think the real question is do you really want that? And I think you'd have more cases where... people would be able to not have an intermediary, but you'd also have more cases of abuse, and the recourse would be much harder."

Featured Image Credit: Photo via Pexels.com

Binance ‘Unknowingly’ Earns $775K via Staking, Set to Launch Huge XLM Giveaway

On Thursday (July 18), Binance, the world's largest cryptoasset exchange (by adjusted trading volume), made a rather interesting announcement: it had "unknowingly" earned 9.5 million Stellar Lumen (XLM) tokens through staking rewards, and it is going to give all of it away to all Binance users who maintain XLM balances between July 20 and September 1.

Binance explained via a blog post that in August 2018 the Binance team followed the advice of the Stellar Development Foundation "to change some parameters on both cold and hot wallets," which resulted in the exchange "unknowingly" earning staking rewards for its XLM holdings since 31 August 2018.

Then, this week, while the Binance team was considering the idea of adding support for XLM staking, it found out that Binance had earned around 9.5 million XLM tokens (each of which was worth approximately $0.08157 at the time). Binance notes that all "weekly staking rewards between then and now are documented on the blockchain." 

So, the team made two decisions:

  • add support for XLM staking to Binance.com; and
  • give away the aforementioned staking rewards to the Binance community (i.e. Binance users).

This is not the first time that Binance has added staking support to Binance.com. The exchange already "distributes NeoGas for NEO holders, Ontology Gas for Ontology holders, VTHO for VeChain holders, and BitTorrent tokens for TRON tokens."

Here is how this 9.5 million XLM giveaway is going to happen.

From July 20, Binance will support XLM staking. Between this date and September 1, Binance will take "daily snapshots" of XLM balances in Binance user accounts.

Then, on September 1, Binance will "tally average user XLM balances based on these snapshots," and process the distribution of staking rewards to these user accounts (that maintained XLM balances during the staking period). Furthermore, the roughly 9.5 million XLM tokens that Binance has unknowingly earned to date will be distributed as a bonus payment to all Binance users who jave maintained non-zero XLM balances since July 20. 

Binance says in its blog post that it estimates this "one-time distribution of 9,500,000 XLM shared proportionately among Binance users" to be worth "10 to 12 months of typical monthly rewards."

According to a support article published on July 18, here are the details of Binance's "Monthly XLM Staking Airdrop Program":

  • Binance will start these daily XLM balance snapshots at 00:00 (UTC) on 20 July 2019.
  • This is how Binance will calculate the XLM staking distribution:

XLM generated by each user = Total XLM staking rewards received by Binance * User XLM holdings ratio. User XLM holdings ratio = User XLM holdings / Total XLM staked by Binance.

  •  In order to qualify for XLM staking rewards, Binance users must have a balance of at least 10 XLM.
  • This initial distribution of XLM staking rewards will be calculated until 1 September 2019, "with the total amount distributed equal to the staking rewards accrued on holdings during the 43 day period."
  • These XLM staking rewards are calculated on a daily basis and are distributed monthly. 
  • XLM distrubutions will be "completed before the 5th of each month."

In other Binance news, another support article explained that Binance's Margin Trading platform has added support for two margin assets (EOS and LINK), three borrowable assets (BNB, EOS, and LINK), and three margin pairs (EOS/USDT, EOS/BTC, LINK/USDT, LINKBTC).

Binance's announcement about its 9.5 million XLM giveaway may have helped the XLM price. According to CryptoCompare, XLM is currently trading at $0.08914, up 7.96% in the past 24-hour period:

XLM-USD 24-Hour Chart on 18 July 2019.png

Featured Image Courtesy of Binance