Facebook’s digital currency Libra was officially launched not long ago, attracting worldwide attention. It has been praised as a step that changes the history of finance. In the same period, GSAE also released a digital currency especially for social celebrities. This currency is also the world’s first public offering of social assets. Is that the two companies making a new attempt in the field of digital currency a mere coincidence, or does it signify a new promising sector?
Libra and Facebook’s ambition
Libra is a stable coin managed and released by Libra Association, an organization initiated by Facebook and run by dozens of other companies. To date, 28 out of the expected 100 members in the list have been announced. These members’ contribution shall earn Facebook $1 billion, which can be regarded as a round of financing at $1 billion completed for Project Libra.
Payment is the main purpose of Libra, and the sheer scale and profit associated with payments have manifested in China. With a user base below 600 million, China’s top two third-party payment services provided by Internet companies have generated about $28 trillion in transactions in 2018. While Facebook users have amounted to 2.7 billion at the end of last year, which represents a much larger digital community than WeChat (WeChat has 1.1 billion monthly active users; almost every Chinese uses WeChat), suppose Facebook convinces all their users to use Libra, the scale and profit will be enormous. Apparently, Facebook releasing Libra marks Facebook’s debut in payments.
Members of the Libra Association announced by Facebook this time come from six sectors:
Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa
Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, MercadoPago, SpotifyAB, Uber Technologies, Inc.
Telecommunications: Iliad, Vodafone Group
Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited
Venture capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures
Nonprofit and multilateral organizations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking
Some predict that Facebook Libra will facilitate transactions totalling $50-80 trillion. If a fee of two-thousandths is charged for each transaction, at least $100 billion a year, which is more than Facebook’s current yearly revenue, will be generated. And if Facebook stimulates consumption a little bit, or raise the fee a little bit, that figure will go beyond $200 billion.
It is fair to say that the release of Libra has revealed Facebook’s great ambition.
Unlike Facebook’s ambition to seize the payments market, GSAE with its digital currency eyes on the market of social celebrity assets.
Social platforms emerged one after another in the past decade. Twitter, Facebook, Instagram, Weibo, WeChat and others have brought the Internet into the social era. The advent of the social era has witnessed a surge in social users, and it has also given rise to the concept of social celebrity.
After several years of development and market education, people have now recognized the value of social celebrities, and the reason lies in the tremendous influence possessed by the social celebrities in this social era. Each social celebrity attracts massive traffic, through which they can exert a strong influence on the decision making and behaviors of his or her followers. This is also why they are called the Key Opinion Leaders.
Nonetheless, GSAE believes that how the social celebrities’ value is realized remains in a state of barbaric growth, and the value is far from being fully realized. The social celebrities deserve more. The room for growth in their individual value remains huge in the next ten years. Besides, interaction and the circulation thereof between the social celebrities and their followers have not yet reached a satisfying level. GSAE therefore hopes to innovate and transform this industry through social assetization.
Despite the surging number of social users in the past decade, the time when everyone is a social celebrity predicted by many is not here yet, for the matter of credibility. One must be credible to be able to influence and have the followers listen. Those who do not have any credibility or have lost their credibility on social platforms cannot be influential.
For celebrities, social influence is fundamental in realizing their value, while enhancing their value only takes the growth of credibility. For the growth of credibility, blockchain technology has been most closely related in recent years and it is still profitable. It was once said that blockchain is the optimal technology to address credit issues in the digital age. GSAE launching the digital currency for social celebrities aims right to leverage the blockchain technology and help social celebrities increase the value of their social assets.
With the mission in mind, GSAE has reached strategic partnerships with IMS US, Japan’s Allied Architects, as well as Weibo in China to include social celebrities around the globe.
Incomplete statistics show that worldwide, there are millions of certified social celebrities. If 10% of them issue their own social assets averaging at $100,000, total transaction is also estimated at hundreds of trillions in dollars. And if the fee charged by GSAE remains at the current level, the revenue will be at least $100 billion per year. The figure may even exceed $500 billion, surpassing that of Facebook’s Libra, if GSAE can popularize social assets and quantify everyone’s social assets for issuance on the basis of social credit.
Indeed, the launch of Libra has revealed Facebook’s great ambitions towards consumer finance and consumers’ paying capacity. On the other hand, GSAE shows the determination to transform and turn the value of billions of social individuals into assets. Both GSAE and Facebook have paved the first bricks on the way to the future. Let us wait and see who will be the true originator and winner in the era of social finance.