BitTorrent launches cryptocurrency, Facebook likely to follow
Originally posted by Ashley Jessen @ learncfds.com
BitTorrent, the peer-to-peer file-sharing platform, is launching its own cryptocurrency and aims to create an economy based around its networking, bandwidth and storage capabilities. Meanwhile, Facebook’s long-rumoured entry into the cryptocurrency arena looks likely to arrive soon. Both of these developments will be of great interest to the growing number of CFD traders who make use of the digital coin aspect of forex markets.
Users of BitTorrent’s Windows client uTorrent, which is among the most widely used peer-to-peer networking applications, will be able to use crypto tokens and trade them for faster download speeds. This move in the area of blockchain technology follows on from Tron’s recent acquisition of BitTorrent.
Tron founder and BitTorrent CEO Justin Sun said: “BitTorrent token is the first in a series of steps to support a decentralized Internet.” Sun’s project aims to establish a fully operational decentralised Internet and has peer-to-peer ledger-based networks such as Ethereum in its sights.
“In one giant leap, the BitTorrent client can introduce blockchain to hundreds of millions of users around the world and empower a new generation of content creators with the tools to distribute their content directly to others on the web,” Sun added.
Peer to peer
“Seeding” is the process through which users keep a file on a device and share it over an Internet connection. This is an essential part of the success of peer-to-peer platforms such as BitTorrent, and the introduction of the BTT crypto coin incentivises this behaviour. The digital token will be available to non-US account holders when it launches via Binance Launchpad, the token sale platform. Tron already has its own cryptocurrency, TRX.
BitTorrent’s move towards cryptocurrency and blockchain technology comes in the wake of former CEO Rogelio Choy leaving the company six months after Tron bought it for $126m. Nether BitTorrent nor Choy has made any public comment on this decision, but disagreements regarding the company’s future direction are rumoured to be the reason for the change.
With crypto originator Bitcoin recently reaching its tenth anniversary with a valuation under $4,000, which is down from around $14,000 this time last year, the launch of any new digital token is somewhat risky. The dramatic fluctuations in price is an aspect of cryptocurrencies that makes them so attractive to CFD traders, but from a more general public viewpoint, this factor worries some observers.
Social media giant Facebook has the power to introduce vast numbers of users to new ideas, and people have expected the company to move into financial services for some time now. Former PayPal President David Marcus came on board to run Facebook’s Messenger app in 2014, and last May, he took up the position of heading the company’s blockchain initiatives. A recent round of hiring by Facebook has seen the blockchain group currently number around 40 employees, according to LinkedIn data.
Last year, a Facebook spokesperson told The Independent: “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications.”
As Facebook has 2.5 billion global users and an annual revenue in excess of $40bn, any moves that the company makes in the realm of cryptocurrency will be very big indeed. In fact, if the rumours are true, then Facebook could be the first large technology company to really get to grips with such a development.
The speculations centres around Facebook using cryptocurrency to enable the transfer of money through WhatsApp, and it is likely to roll out first in India, according to reports. The “stablecoin,” a digital currency linked to the US dollar, will be the preferred option. This approach would minimise volatility, but it is still reportedly in the early stages of planning, with no launch date set as of yet.
India and stablecoins
WhatsApp is Facebook’s encrypted messaging app. It is particularly popular in India and has in excess of 200 million users in the country. According to the World Bank, people sent $69bn from across the world to relatives in India during 2017.
The stablecoin has had something of a boom year throughout 2018. According to Stable.Report, a website that tracks stable tokens, last year saw more than 120 related ventures at one point. However, a stablecoin known as Basis recently shut down after having trouble with classification legalities. The New Jersey-based company behind the coin said that classifying it as a security rather than a currency was the problem, as it significantly reduced the number of potential buyers. High-profile backers for the project included Kevin Warsh, former Governor of the US Federal Reserve.
For CFD traders, much of the appeal of cryptocurrencies is that there is a great deal of volatility in their valuation. Therefore, an extension of the stablecoin concept linking to the US dollar or any other major national currency would take away much of the reasoning for getting involved in crypto trades.
However, as more major companies begin to make moves into the digital token arena, the benefits for other digital coins will become apparent. These will include greater legitimacy among a wider spectrum of the public, leading to a bigger take-up of usage across the spectrum.
This can only be good news for traders looking for more opportunities to take a position on crypto forex assets, as once conditions reach a certain point, there will undoubtedly be an exponential increase in activity.