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I mean, what's stopping Facebook from introducing FaceCoin tommorrow as a virtual currency like any of the other in-game currencies only offer to buy real thing

I mean, what's stopping Facebook from introducing FaceCoin tommorrow as a virtual currency like any of the other in-game currencies only offer to buy real things with it. None of the market-dominating things need Coinbase or anything crypto related. If they buy, it's purely tapping a hot market. Keep in mind, once the dust settles, cryptocurrency is probably going to settle into two buckets: utility and security. Facebook definitively does not want to be involved in the latter.

drawnwren 8y ago
If nothing else, I think 2017 has clearly delineated how a company looking to offer crypto can ensure that they are in the utility bucket. Because let's be real, very few players want to be in the security bucket.
andrewla 8y ago
> what's stopping Facebook from introducing FaceCoin tommorrow The same thing that's stopping them from building a rocket ship or a Facebook-branded pocket knife. Why would they do it? Either this theoretical coin gives Facebook some advantage -- i.e. the ability to mint new coins at a whim, or an ICO that gives them a bunch of capital -- in which case that will make it unappealing to large swathes of users compared to fiat or existing cryptocurrencies, or exposes them to possible regulatory risk in exchange for capital, which they can easily raise through normal capital markets. Or it gives them no advantage, so ... why do it? Purchasing a company like Coinbase doesn't seem to make sense to me in terms of aligned business goals, but my experience with M&A people is that it doesn't really matter -- they get rewarded based on perceived dollar value and execution, rather than whether their actions benefit the company. In the end nothing would surprise me here, but a priori acquiring a growing company at a perceived discount to its discounted future value is a good use of cash, even if only seen as an investment.

drawnwren 8y ago

If nothing else, I think 2017 has clearly delineated how a company looking to offer crypto can ensure that they are in the utility bucket. Because let's be real, very few players want to be in the security bucket.

andrewla 8y ago

> what's stopping Facebook from introducing FaceCoin tommorrow The same thing that's stopping them from building a rocket ship or a Facebook-branded pocket knife. Why would they do it? Either this theoretical coin gives Facebook some advantage -- i.e. the ability to mint new coins at a whim, or an ICO that gives them a bunch of capital -- in which case that will make it unappealing to large swathes of users compared to fiat or existing cryptocurrencies, or exposes them to possible regulatory risk in exchange for capital, which they can easily raise through normal capital markets. Or it gives them no advantage, so ... why do it? Purchasing a company like Coinbase doesn't seem to make sense to me in terms of aligned business goals, but my experience with M&A people is that it doesn't really matter -- they get rewarded based on perceived dollar value and execution, rather than whether their actions benefit the company. In the end nothing would surprise me here, but a priori acquiring a growing company at a perceived discount to its discounted future value is a good use of cash, even if only seen as an investment.