Facebook’s announcement in June that it was muscling in on the cryptocurrency sector was perfect timing. Cryptocurrencies enjoyed a powerful rally during the first half of 2019 and the mounting evidence that the sector was not just a speculative opportunity but was becoming a store of value drove strong growth in retail usage of digital tokens.
The Libra Project is as much a response to the opportunities provided by step changes in blockchain innovation and the growing ease of cryptocurrency usage in commerce, as it is to the desire to be a competitor in fast-moving asset class.
Much of this increasing use of cryptocurrencies in commerce has been driven by a group of intermediaries in the payments sector.
Big social media players are spotting opportunities here, too. San Francisco-based payments company Square, co-founded by Twitter’s Jack Dorsey and entrepreneur Jim McKelvey, launched Square Crypto to bring together merchants who are happy to transact in cryptoassets and holders of digital assets who are happy to spend them.
Most Favoured Coins
Bitcoin is by far and away the most popular cryptoasset when it comes to merchant transactions, followed by ether, litecoin and bitcoin cash. No surprise given their rankings in the top ten of cryptocurrencies by market capitalization.
One surprise among these, however, sits at number six on the list of those crpytos most favoured by merchants, yet only stands at number 29 by market cap. Dogecoin, launched as a so-called joke currency in December 2013 and named after the “Doge” internet meme that features a Shiba Inu dog, has marked out some significant territory as a merchants’ cryptocurrency.
Indeed, according to the data compiled by Cryptwerk, nearly 700 merchants accept the altcoin. These include 211 stores or marketplaces, 202 internet services and more than 100 gaming and gambling enterprises. Despite originally being marketed as a “fun and friendly internet currency”, it gained popularity as a medium for internet tipping.
Other stars of the top 10 crypto market cap list such as XRP and EOS rank at eight and 13 respectively on the merchant popularity chart.
The biggest range of businesses that accept crypto payments are from the retail industry – shops and markets. Right behind this is the internet services sector. Gambling and gaming both rank highly – and several digital tokens have been developed specially for use in these sectors, such as GAME, EBET and Enjin.
Other large technology companies will, no doubt, respond to Facebook’s launch into the crypto universe, but the early adopters are already in there, and it’s yet uncertain what impact Libra will make on a fast-developing industry.