Recently, Facebook had publicly announced the launch of the Global Coin cryptocurrency. An interesting detail is a necessity to deposit an equivalent of $10M to run a node. Taking into consideration, that entire Global Coin network will be limited to only 100 nodes, I have a reason to believe that the $10M threshold implies a new management and earnings tool for the institutional market and the elite of the private capital.

Global Coin: a cryptocurrency or a payment system?

Global Coin is backed with fiat currencies and is an index of USD + EUR + JPY. This fact indicates that Global Coin a not cryptocurrency in a straight sense of the word. The ideology of cryptocurrency is based on decentralization, privacy, the absence of regulatory restrictions and the price is governed by market demand. Being backed with fiat currencies, Global Coin represents the artificial application of decentralized technologies, while limited number of network nodes clearly demonstrates the intention to implement centralized management and make earning opportunities for those obtained a right to run a node.

The probability of price growth of the Global Coin node

Let’s draw the analogy with the well-known Telegram’s ICO in order to estimate the potential earnings of future owners of nodes in the Global Coin network. Telegram raised more than $2B with less than 100 investors and an average check of ~$20M, while the number of Telegram users is ~7 times less than that of Facebook ( 300 million vs 2 billion users).

At the beginning Global Coin nodes will be backed with $1B, while one node with a value of $10M will process transactions for 20 million users. Despite the difference in the investment model (ownership of tokens in TON and backing the node in Global Coin), it appears that for every dollar invested Facebook shareholders get twenty times more audience than with the same investment in Telegram Open Network.

Considering the influence of Facebook, it is worth expecting that on an inclosed secondary market, the valuation of a single Global Coin node will overtake the number of users and may amount to $140M. Taking into account that one node will serve approximately ~20 times more users, its value may increase to $2.5-3B in the nearest future.

What could be the purpose of Global Coin investors?

Impressive “x100” may not be the sole interest of Global Coin investors. On June 13, 2019 Business Insider reported that giants like Visa, MasterCard, PayPal, Uber and Booking.com have already queued up to give Facebook money to access big data.

This raises many questions, for example:

Will information about every node be publicly available?

What are the guarantees that the nodes at some point will not conspire and stop transactions to individual customers or even entire regions?

Will the affiliation of companies included in the “cherished” hundred be taken into account?

Why not give the right to the users to independently vote on node holders?

Given the reputation of Facebook and the scandals with user data, these questions can be classified rhetorical. Let’s hope that companies running a nodes will be at least named, besides those already mentioned.

Global Coin Pros:

The above mentioned questions take Global Coin further from the concept of “cryptocurrency” and brings closer to a regulated payment system like Visa or MasterCard, aimed at making profit and controlling financial transactions between users inside the system. Add to this deep analytics of personal data for each user and you might get a mechanism of total control and influence on 30% of the world's population, rather than a social payment system. Sounds scary enough.

Of course, Facebook itself, born 5 years before the Bitcoin take off and the roll out of the ideology of decentralization, has a centralization as a backbone. At this stage of development, having 2 billion users and earning $25 in average on each of them (2018 data), the company is no longer able to change the existing paradigm. This won’t be allowed nor by the management, nor by the entire global financial system.

Global Coin Cons:

On the other hand, the influence of Global Coin to the crypto awareness and usage can be super positive. Crypto market needs an engine and Facebook is the best, albeit centralized, candidate for this role, since its influence cannot be ignored. The appearance of such a player in the digital asset market can significantly catalyze the awareness of “cryptocurrency” and “decentralization” at the global level. Billions of people will learn about cryptocurrencies and start using them in their daily lives.

In the meantime, truly decentralized cryptocurrencies can start spreading to a global audience. In a few years this might ignite a global motion toward the decentralization as a way of being.

Exciting to see how the story will develop.

Maxim Frolov







