I can't understand anything what you mean
More Money,More Problems
My concern is can we really trust Libra
A million dollars isn’t cool. You know what’s cool? The answer from Facebook appears to be this: a million stablecoins. In the most consequential whitepaper since Satoshi Nakamoto’s, Facebook recently laid out plans for Libra, a “stable,” low volatility digital currency supported by its own blockchain and smart contracts platform.
Facebook’s purpose seems simple enough on its face. According to the Libra whitepaper itself: “Moving money around globally should be as easy and cost-effective as — and even more safe and secure than — sending a text message or sharing a photo, no matter where you live, what you do, or how much you earn. New product innovation and additional entrants to the ecosystem will enable the lowering of barriers to access and cost of capital for everyone and facilitate frictionless payments for more people.”
Libra’s value proposition is that we should be able to move money as easily as data. Given how easily Facebook has moved data to bad actors, whether those be Cambridge Analytica or outright cybercriminals, should we really trust them with safeguarding a digital financial ledger? If leaky “likes” can be used to change the course of international political history, imagine what leaky financial histories will produce.
Even assuming Facebook could be a “good custodian” of data and prevent these leaks, how wise is it to have a “one-stop shop” of so much of our social graph and our financial data? In the words of Seinfeld’s George Costanza, worlds are colliding! How will this accelerate the concept of “social credit,” already being used to chilling effect in China?
These are just a few of the reasons why this new digital currency, right out of the gate, feels both forced and destined for failure. More than that, though, it simply doesn’t make sense on the fundamental level of how cryptocurrency is supposed to work, especially if it is ever going to overtake the ingrained, lazy appeal of fiat currency.
House Money, House Rules?
On its face, Libra is the logical endpoint of thousands of years worth of private enterprise-based end-arounds of state-sponsored fiat currencies. As early as the Roman Empire, it is believed special tokens called spintriae were used in what are presumed to be casinos and brothels. Centuries later, English monasteries used their own “branded” tokens to pay for services, and centuries after that, the first casino tokens were used in 17th century European card games like Ombre and Quadrille. In the American Old West, poker players used pretty much whatever was on hand, whether gold nuggets, coins or paper to represent currency in games.
To some extent, casinos from Las Vegas to Monte Carlo to Macau have continued the tradition with their own tokens (or “chips”) that can be bought to play house games.
Of course, Facebook – the company that once wanted to make the world more “open and connected” – is attempting something more ambitious than any private issuer of tokens ever has. The motivation of Facebook to build Libra, as well as its supporting foundation and technology, probably has more to do with what built those glitzy casinos in Las Vegas and Monte Carlo and Macau than with making the world more “open and connected.”
Despite Facebook’s “more open and connected” mantra, there is no reason to believe Libra won’t suffer from its own “walled garden” (or “theme casino”) effects. Playing with Facebook’s “chips” means you’re playing by the company’s “house rules,” which can change on the whim of the company and its Libra Foundation.
You Come at Satoshi, You Best Not Miss
Bitcoin’s main proposition has always been that there is no governing board; no one controls the currency, not even Satoshi (well, for all practical purposes at least); and that math, not the aforementioned governing board, should determine the ultimate value of currency. Libra may have some attractiveness and maybe even viability as a payments replacement in the third world, like mPesa or even the U.S. dollar before it, but in terms of a completely stateless, corporate interest-free currency, nothing will ever compete with bitcoin. If there is an advantage over such competitors as the centralized Ripple or stabilized Tether, it is merely a marketing one.
Libra is “solving” the problems of decentralization by offering its counterpoint of privatized centralization, a new system led by some of the very same big players that gave rise to bitcoin and digital currencies in the first place. Perhaps Facebook’s experience penetrating different international markets, assisted by the Libra Foundation’s roster of “Big Payments” partners (e.g. Visa, Mastercard and Paypal), will give it an advantage in providing a bridge to physical exchanges and merchants, but it severely hobbles the currency’s financial independence at the same time.
At its heart, Facebook is putting a new coat of paint on an old system, completely ignoring the appeal and initial value proposition of the blockchain and cryptocurrencies in the first place. Facebook is essentially backing its token not with a federal insurance corporation, but with a consortium of those “Too Big To Fail” partners. Those well-versed in the history of bitcoin, and thus all cryptocurrencies, are sure to appreciate the irony.
Not only that, the mystery of bitcoin’s origins and inventor, which might give some trepidation to the casual holder, is actually where the cryptocurrency derives much of its power. Government entities that might see bitcoin and Libra as competitors can easily use the power of subpoena, as we’ve already seen on a few occasions, with Mark Zuckerberg, Sheryl Sandberg, the rest of Facebook and the rest of Libra’s foundation. Good luck with that on bitcoin...we are all Satoshi.
To get over two billion people to use Libra, Facebook will have to fight a very different war than the one it waged to onboard two billion people onto its social network. Like Facebook Home and Facebook Credits before it, it may be one more Facebook “moonshot” cursed with a fundamental failure to launch
