What Were Facebook Credits?
Facebook credits were virtual and could be used to buy goods in online games through the social networking platform, Facebook. Facebook credits were available for purchase online using a credit card, PayPal account, mobile phone, or various other payment methods, as well as offline at various retailer locations. The credits were then intended to be used to purchase games or software applications, also referred to as apps, found on the Facebook platform.
Credits were active from around 2011 to 2013 before being sunsetted.
- Facebook credits were phased out by the company in 2012 and completely suspended by 2013.
- Facebook credits were a relatively short-lived proprietary payments scheme used on Facebook's platform to pay for virtual or in-game items or services.
- One credit initially cost USD $0.10 and Facebook took a 30% cut of all on-platform purchases that used credits.
- The company launched the Credits beta in 2011 and sunsetted the project by 2013.
- In 2019, Facebook announced a more ambitious blockchain-based platform-specific currency called Libra, which is set to roll out in 2021.
Understanding Facebook Credits
Instead of users buying things on Facebook's ecosystem using their local currency, Facebook launched Credits, an intermediary proprietary virtual currency that cost USD $0.10 each, and which could then be spent on virtual goods or game-specific currency. Facebook credits were intended to be used to buy intangible goods such as in-game or in-app virtual gifts, parcels of virtual real estate, virtual weapons, tools, and "animals" in platform-based video games or applications. Facebook earned 30% of all purchases made using Credits.
The platform's beta stage ended around January 2011, at which point Facebook announced that it was requiring all Facebook game developers to process transactions exclusively with Facebook credits. By the end of 2011 this virtual money was backed by the government-issued currencies of over 50 different countries. However, Facebook announced in 2012 that it was shutting down Facebook credits and converting any funds accrued by users to their local fiat currencies.
Credits vs. Libra
In 2019, Facebook announced that it was re-visiting the idea of a platform-specific digital currency that could be utilized by users from any country called Libra. This iteration, unlike Credits, is intended to be based on blockchain technology and function like a cryptocurrency such as Bitcoin. The goal is to create a stablecoin against a basked of fiat currencies, and who whose value does not fluctuate much.
Moreover, Libra is intended to be backed by several large financial and payments companies such as PayPal, Visa, and MasterCard - although many of these corporate alliances have already faltered. The Libra project has also undergone scrutiny by regulators and policymakers as well as pushback from the larger cryptocurrency community who claim that it is not as secure or technology sound as the company makes it out to be.