By CCN: Excitement for Facebook’s forthcoming cryptocurrency, dubbed GlobalCoin, may have hit its first roadblock in adoption.
Poor Demographics for GlobalCoin
According to research published on May 28 by cryptocurrency analytics firm Diar, Facebook’s payment-focused coin will fail to gain traction based upon the demographics of the platform’s user base. Despite being one of the largest social media hubs on the web, GlobalCoin adoption will face an uphill battle with Facebook’s aging population.
Diar’s research shows that less than half of Facebook’s users are under the age of 35, with the number of retirees (age 65+) more than doubling since 2012. Baby boomers have continued to be the weakest demographic for interest and investment in bitcoin. There is little reason to believe they will change their minds because of GlobalCoin and are even less likely to learn the intricacies involved in using cryptocurrency.
As outlined by Diar, the barrier of forcing adoption on an aging user base will be hard for even Facebook to overcome:
“Educating 25% of the world’s population about current cryptocurrency infrastructure that requires private-key management and the glaring reminder of the possible ultimate loss of funds is also unlikely as it would result in the project’s near instant failure.”
In addition to their aging user base, Facebook is falling behind with younger demographics. According to the Pew Research Center, Facebook has lost dominance within the teen market relative to other platforms. Barely half of U.S. teens use Facebook compared to 85% of teens participating on YouTube. Even SnapChat has managed to gain on Facebook in the teen demographic.
Pew claims that Facebook is beginning to skew toward lower-income households – a fact that does not bode well for pushing a payment-based technology such as GlobalCoin:
“Lower-income teens are far more likely than those from higher-income households to say Facebook is the online platform they use most often.”
GlobalCoin a Bitcoin Killer? Not Likely
GlobalCoin has been poised as a bitcoin-killer on the assumption that the currency will find traction with Facebook’s 2.2 billion users. If Diar’s analysis proves correct, Facebook’s existing user base is ill-prepared to receive the currency and even less likely to find traction elsewhere.
Will Facebook’s coin be useful for global payments? Maybe.
Does it present a threat to Bitcoin? Nah.
Despite what the media will emphasize, it will still be centralized, permissioned finance at the cost your personal data.
Stack sats. Hodl on. Change the game. https://t.co/YD9t89X9NO
— Stephen Cole (@sthenc) May 24, 2019
Cryptocurrency supporters will shun the coin outright based upon the centralization inflicted by Facebook. Big companies may impose their will on other examples of fintech, but cryptocurrency has emerged from a movement of decentralization. The community has been active voicing their skepticism of GlobalCoin, a refrain that will continue to build. In addition, GlobalCoin constitutes a stablecoin pegged to the value of 1 USD, eliminating the market for would-be speculators.
Traders and long-term crypto investors have little reason to back GlobalCoin, and Facebook’s own user base is not poised to find cryptocurrency appealing. Next year’s release could fall flat for the Facebook coin and instead, provide validation for bitcoin and established cryptos.