Facebook and Twitter want to be trendy. Why do social networks integrate cryptocurrencies into their systems?
Social networks embark on the path of digitalization and begin to develop cryptocurrencies within their systems. In this article, I will analyze the relationship between social networks and cryptocurrency.
Social networks integrate cryptocurrencies into their systems for a reason. Such a decision can positively affect both the cryptocurrency and social networks in general. Where is the connection? In this article, I will give a detailed answer to this question.
Cryptocurrency and new technologies
The world today is a dynamic system that does not stand still and is constantly evolving. New technologies come into our lives, such as bitcoin and digital currencies. Every day, the cryptocurrency industry is becoming more popular and occupies new niches in the international device. Even 5–10 years ago, no one had heard of cryptocurrencies. 3-4 years ago, the first banks, government systems, financial companies began to turn their attention to bitcoin. However, today not only financial organizations, but also social networks are actively trying to develop and integrate cryptocurrency into their systems. But why is it so important? Now we’ll find out.
Facebook and its strategy
At the moment, Facebook, as a company, has announced the development of the cryptocurrency direction in two main segments. The first direction is the development of its own cryptocurrency, which will function on the basis of a social network. The second direction is connected with the creation of a global ecosystem with the integration of technologies of the cryptocurrency world.
Libra and other stablecoins
In 2019, Facebook announced the development and testing of its own cryptocurrency called Libra. It was supposed to fulfill the function of payments both within the Facebook ecosystem and outside it. For example, it would be convenient for her to make payments, interact with a social network. It was planned that it would be a stablecoin that is tied to real assets, securities. Thus, the coin will not be volatile, but at the same time it will have all the conveniences of cryptocurrencies. These are speed, safety, small commissions.
However, already in 2020, Facebook announced that it was stopping the development of this coin. Official reason: disagreements with regulators. Instead of a common single coin for the entire ecosystem, Facebook promised that in the future it will release separate stablecoins pegged to the dollar, euro, pound, etc.
In any case, the attempt was justified, because Facebook set a course to create its own ecosystem into which it can integrate cryptocurrencies.
Facebook and its global metasystem
In October 2021, the head of Facebook, Mark Zuckerberg, announced the rebranding and creation of his metasystem, which will be based not only on the social network. He also announced the integration of one of the most hyped technologies in the cryptosphere right now – NFT. This will allow Facebook to facilitate the sale of various digital objects, to create a system for displaying images in the digital space. You can read more about NFT in one of our articles dedicated to this topic .
In addition, Facebook aims to support cryptocurrencies and Bitcoin in its metasystem, which indicates the demand for digital money technology today. Indeed, today it is already difficult to imagine a technologically advanced digital system without elements of the crypto industry: cryptocurrency, stablecoins, NFT, CBDC, DeFi and much more.
What is the benefit of the technology of the cryptocurrency world for Facebook?
But why does Facebook need all this? The answer is simple enough. Cryptocurrency and the opportunities that it provides allow, firstly, to improve the level and quality of user service through fast transactions, NFT tags, low commissions, security of money transfers and use of a social network.
Secondly, all this attracts new users. Today, the demand for cryptocurrencies and the technologies that it offers is growing. And many people simply demand that the companies whose services they use develop and provide users with choices, including the use of cryptocurrencies.
Twitter and bitcoin
With Twitter, the situation is very similar. Users have a need to use cryptocurrencies based on a particular social network. In order to maintain activity among users and be in trend, to introduce new digital technologies, Twitter announced the integration of bitcoin into its system.
The announcement happened in July 2021. In the near future, it will be possible to use bitcoin while interacting with the social network. For example, a paid subscription, user support with donations, any purchases can be made using bitcoin. This is a really important step for the development of Twitter as a social network.
Cons of social networks integrating cryptocurrencies into their systems
The “collaboration” of social networks and cryptocurrencies can have both minuses and pluses. If we talk about the cons, then cryptocurrency today is not a simple and understandable technology for everyone. And for many people, innovations will be extremely difficult to master. At the same time, it is still possible to do without such technologies today. But I want to emphasize that in the near future it will be impossible to do this.
If we are talking about the widespread introduction of cryptocurrencies into every known social network, then many financial analysts see the risks that a cryptocurrency integrated into social networks can have a negative impact on the monetary policy of different states. Such innovations can disrupt the distribution of financial flows around the world. However, this is only a theory so far.
What advantages will social networks give to the cryptocurrency market?
Now let’s move on to the most important thing. We learned what advantages and benefits cryptocurrency gives to social networks: convenience for users, attracting a new audience. That is why the technologies that cryptocurrency provides are so important for social networks. If you do not follow global trends and the needs of the audience, then you can forget about the rapid development of the company.
However, as it turned out, such “cooperation” can be beneficial not only for social networks, but also for cryptocurrency! At the beginning of the article, I mentioned that cryptocurrency is becoming more popular. And since this is the financial sector, first of all, financial structures are beginning to be interested in it. These are banks, financial companies, even states. However, when it comes to social networks, this is a completely different niche.
Social networks today are the most powerful tool for recognizing and promoting a particular product in society. Social networks are the very society, people! That is why, when we talk about the fact that social networks integrate cryptocurrencies into their systems, this means that their fame, popularity in society will grow significantly. Thanks to social networks, cryptocurrency will become even more recognizable, popular, and after a while literally everyone will know about it. And the higher the demand for cryptocurrency, the more its price will grow.
The result is a vicious circle. There is a growing demand for crypto-currency services in society, and social networks are integrating crypto-currencies into their systems. And this, in turn, adds recognition to digital assets, which further fuels demand and interest in society. This process is inevitable. In the future, literally every social network will support certain cryptocurrencies and related services. It’s just a matter of time