Ever since the news broke out last year that Facebook will launch its own cryptocurrency, the entire crypto community has been eagerly waiting for it. The humongous user base size of the social networking website makes it the ideal player in the industry. However, recent reports suggest that Facebook’s native token faces serious demographic challenges, which could be a big problem for it.
The social media behemoth has its users spread around the globe, and across age groups. An earlier report, young people, between the age group of 15-35 years, tend to invest more in cryptocurrencies rather than traditional assets like gold. This is where problems start for Facebook.
Facebook’s 55% of users are aged above 35 years of age. Add to that the age group which generally don’t invest, the 3% belonging to 3-17 years. So in total, about 58% of the total user base is not likely to buy cryptocurrencies. Older people tend to have less trust in digital currencies and look for more traditional assets like gold, stocks, land, etc.
And the sad part is that out of the remaining 42%, who are young and willing to invest in cryptocurrencies, not everyone has the capacity to do so. Since most of these are in the initial years of their careers, they have not much left after basic consumption expenses. This makes investing in cryptocurrencies less feasible, though they have the intent.
Moreover, Facebook has a diverse user base, with a presence in almost every country on the planet barring a few. However, the problem here is that the concentration of users is more in underdeveloped and developing countries, rather than in mature and developed markets. The, for instance, the highest number of users of Facebook are in India, a market which is predominantly resistant towards cryptocurrencies. On the other hand, the United States, which is somewhat liberal for digital tokens, accounts for only 10% of Facebook’s total user base.
Also, as the social media behemoth has such a diverse user base, having only the US Dollar as an acceptable currency won’t help. Globalcoin needs to bring as many fiat currencies on-board as possible, especially INR (India), BRL (Brazil), MXN (Mexico), and IDR (Indonesia), to cater the most important markets for its adoption.
The positive side is that Facebook’s token will be released only in mid-2020, which gives it enough time to tackle these challenges.