Facebook has been quietly building a cryptocurrency, "Facebook Coin," that will mimic the value of traditional currencies, according to CNBC.
Barclay internet analyst Ross Sadler predicts the introduction of the cryptocoin could add $19 billion in revenue by 2021 on the upside. A conservative estimate forecasts the coin will add an incremental $3 billion in revenue if successful.
Five things to know:
1. The Facebook Coin will be available through the social network's messaging app, WhatsApp. While Facebook has not publicly commented on the cryptocurrency development, the New York Times, Bloomberg and CNBC reports suggest the digital currency will be a "stable coin," as it would have a fixed price.
2. This new revenue stream may be a lifeline for Facebook, Mr. Sadler said. "Any attempt to build out revenue streams outside of advertising, especially those that don't abuse user privacy are likely to be well-received by Facebook's shareholders," he told CNBC.
3. Although outside companies are under fire for sharing users' data with Facebook, this new coin may allow those same companies to re-establish themselves, Mr. Sadler suggests. The cryptocoin could generate more premium content on Facebook.
4. Facebook previously failed at sustaining a blockchain payment system a decade ago when it developed a peer-to-peer vertical currency known as "Facebook credits." Users would prepay to use the cryptocurrency with domestic currencies, then, use the cryptocurrency to make in-app purchases. The virtual coin dissolved due to interexchange costs.
5. Facebook has been building its blockchain team. It hired former PayPal president David Marcus as well as a group of employees from startup Chainspace.