Facebook has finally revealed the details of its cryptocurrency, Libra, which will facilitate purchases or to send money to people with nearly zero fees.
You’ll pseudonymously buy or cash out at your Libra online or at local exchange points like grocery stores, and spend it using interoperable third-party wallet apps or Facebook’s own Calibra wallet. This will be built into WhatsApp, Messenger and Facebook’s own app.
Facebook won’t fully control Libra, but instead get just a single vote in its governance like other founding members of the Libra Association, including Visa, Uber and Andreessen Horowitz, which have invested at least $10 million each into the project’s operations. The association will promote the open-sourced Libra Blockchain and developer platform with its own Move programming language, plus sign up businesses to accept Libra for payment and even give customers discounts or rewards.
Facebook is launching a subsidiary company also called Calibra that handles its crypto dealings and protects users’ privacy by never mingling your Libra payments with your Facebook data so it can’t be used for ad targeting. Your real identity won’t be tied to your publicly visible transactions. Facebook’s audacious bid to create a global digital currency that promotes financial inclusion for the unbanked actually has more privacy and decentralization built in than many expected. Instead of trying to dominate Libra’s future or squeeze tons of cash out of it immediately, Facebook is instead playing the long-game by pulling payments into its online domain.
And whilst Facebook announces its big plans, regulators in both the United States and Europe are already pushing for strong oversight — in one case, Rep. Maxine Waters is pushing for a moratorium on the plans entirely — and every newspaper, tech company and government on Earth is taking a magnifying glass to Facebook’s newly announced ambitions. They’re finding grandiose plans along with big unanswered questions.
“Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy,” Sen. Sherrod Brown said in a statement on Tuesday. “We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight. I’m calling on our financial watchdogs to scrutinize this closely to ensure users are protected.”
What’s Everyone Saying in the Crypto World
A clown car that sits both serious technologists and bona fide hucksters, the cryptocurrency realm is extremely attentive to Mark Zuckerberg’s new play. Some are positively optimistic, others are treating this as the early stages of a techno-pocalypse. Let’s survey the scene:
Chalk influential American bitcoin advocate Erik Voorhees up on the bright side. He sees Facebook’s move, above all, as a big win for the blockchain industry.
“Zoom out for a second and realize how far this industry has come,” he tweeted. “The biggest companies in the world are now launching cryptocurrencies. BOOM.”
After the celebration, Voorhees talked about Libra’s privacy issues:
Libra is clearly not a ‘pure cryptocurrency.’ Nobody should expect privacy by using it. Nobody should expect the true borderless standard of most cryptos. Libra will never be available in Iran due to sanctions, for example. Next: the governing consortium can explicitly block/prevent txs. You won’t find unstoppable finance here. Again, in this, traditional cryptos are far superior. But let’s be realistic, there’s no way FB could create an unstoppable coin (at least, not in its 1st phase…)
You can count Spencer Chen, Vice President over at the cryptocurrency wallet BRD, as among the optimists: “It’s probably the mainstream kickstart + broad adoption blockchain needs.”
Now, let’s tune into Reddit to see what they’re bringing to the discussion. Cryptocurrency-focused subreddits like /r/CryptoCurrency and /r/Bitcoin have been diving deep on Libra and there is a fair amount of discontent about how the fundamental nature of Libra — centralized control, censorable, backed by fiat currency — cuts against cryptocurrency’s roots. There is, likewise, real excitement over what it means for the industry as a whole.
Although there have been questions raised about the overall success of this project particularly outside of the cryptocurrency realm, on the inside they’re focusing on the potentially world-changing possibilities — for better or worse. Keep in mind that this is a domain where experts are known — incentivized, in many cases — to speak in grandiosities that overstate reality.
Changpeng Zhao, CEO of the cryptocurrency exchange Binance, wrote that Facebook has a chance to “reshape the payment industry” and start the “un-dollarization of the world.”
The next year will undoubtedly see some big questions answered as Libra moves toward launch. It likely won’t be until that launch day some time in the first half of 2020 that we’ll get the see this thing in action.
Whatever camp you find yourself in, now that one of the biggest and most powerful companies in history has partnered with dozens of other giants in an effort to change money, it’s worth paying attention to Zuck’s bigger machinations whether you’re excited or horrified or both.
What is your take on Facebook’s cryptocurrency? Do you think it could finally bring mainstream adoption or is it a mockery to decentralised crypto ideals? Comment below 🙂
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