Facebook is planning on launching its own cryptocurrency called Libra.
For a long time, people in the Bitcoin community have hoped that it could reach mass adoption, that everyone would start using it and abandon fiat currency. That hasn't happened yet.
Is it possible that a multinational corporation like Facebook could take this technology and use their existing user base to introduce it in a way that's user friendly, and dominate the whole market? And if they do, what's the worst that could happen?
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Facebook & the Cryptocurrency Market
So, Facebook coin. Facebook has about 2.8 B users worldwide, FB also owns WhatsApp and Instagram. Whatsapp has 1.5 B users, Instagram 1 B users. Imagine if they could connect all of these users in a worldwide financial network, using a coin which is tied to the US dollar.
People say with such a large userbase, Facebook could immediately compete with PayPal's 277 MM users, venmo's 40 MM users. It's not necessarily that simple. As we can see, FB messenger already has a payment option. I've never used it. I've never heard of anyone using it. Most Facebook users say they would not use their payment system.
However, for this network wide coin, it might be different. Whatsapp has 200 MM users in India alone. For a long time, we thought that Bitcoin and cryptocurrency's primary market would be remittances.
The problem seems to be, in a lot of the world it's difficult to spend crypto or convert it into cash. With all those users just in India, and Facebook's possible political influence, they might be able to literally create a whole economy.
The proposed name for the coin is "Libra", which I think is going to be confusing for millions of Spanish speakers around the world, because to them, "libra" means "pound". Imagine starting a new payment service and just calling it Dollar or Euro. Would that be really brilliant, or really stupid?
At first people were speculating that Libra would be something like a Starbucks loyalty card. Now they're saying it's more likely that it will look like Bitcoin or Ether. The question is, what do they have to gain from making this look more like a cryptocurrency than a PayPal system, or like their current Facebook payment system. One answer is, Libra can piggyback off all the existing infrastructure of cryptocurrency. Exchanges around the world can implement support for Libra, and their project benefits while externalising the majority of the costs.
Facebook probably won't want to give up too much control. Libra probably wouldn't be a "true" cryptocurrency like Bitcoin. It will look more like Ripple or Stellar Lumens - systems where they can still shut down your account if they feel like it.
This presents some interesting opportunities:
- They could reward users for viewing ads, similar to Brave browser and Basic Attention Token.
- Incentivise merchants to accept coins by giving discounts on FB ads when they pay with Libra.
- FB is talking to Visa and Mastercard about making physical Libra cards. Real world integration, again taking advantage of existing payment systems.
- Visa and Mastercard recently announced an increase in their processing fees, which creates space for an Libra pay app similar to ApplePay or GooglePay.
There's also a lot of ways this could go very wrong.
Security Risks
There's an article from CCN entitled "Only an idiot would use Facebook's shady cryptocurrency." It lays out some clear reasons why you shouldn't trust Facebook with money:
- The Cambridge Analytica scandal. This was a breach of trust; a lot of user data was given to a third party, possibly allowing Trump to win US election.
- It was discovered that Facebook stored its passwords in plaintext for about 7 years. That means certain employees would have been able to open the file and log into anybody's account, especially in the years before FB implemented additional security measures.
- The issue of FB censorship. Of course they shut down Infowars, Milo Yiannopoulos, Louis Farrakhan. But a lot of people out there complain of five day bans or 30 day bans for sharing off-colour memes. I was put in FB jail for a week for a comment I'd written maybe 7 years prior. In many cases, there's no appeals process. With so many people using Facebook, with Facebook being one of the primary portals people use to discover news and other information, it's not hard to see how this could be abused for political purposes.
Economic Risks
Facebook wants to make sending money free. The question is, how do they make money from this? One way would be, they open an exchange so people can convert FB coins into their local currency and charge a fee for it.But if I put on my tinfoil hat for a second, I'd look at the case of Tether.
Tether started out with the promise of backing every token 1 to 1 with USD, but recently changed their website to a much vaguer wording, saying every token is backed by assets. They've been very evasive about being audited, and the wording is so vague that we might even assume that that the assets that back many of the tethers, are other tethers.
With Tether having established their place as the premium stablecoin in the economy, and now removing the USD backing, they've become a de facto central bank within cryptocurrency. If FB were to pull a similar trick, it could make them the single most powerful entity within cryptocurrency, possibly with power even to rival the biggest central banks in the world.
I have to ask if Facebook would do this, considering the legal risk they'd face - possibly endless lawsuits relating to fraud.
On the other hand, this is like the story about a guy who borrows a million dollars to buy a tank. You ask him, how is he going to pay back the million dollars? He says, "Pay it back? I don't have to pay it back - if they ever come to collect, I have a tank."
Likewise, once you control the money supply, what could a few lawsuits mean to you?
The steel foil version of this theory is, Facebook wouldn't have to deal with any lawsuits, because they have the support of powerful hidden interests to create a one world currency.
So, what do you think? Would you use Libra? Do you think other people would use it? If they do, are they at risk of putting a buttload of power in the hands of an alleged extraterrestrial reptilian alien overlord? Leave a comment, ask a question.
Thank you
Thanks for pressing like and subscribe, checking the description, being a crypto bro or crypto sister and connecting with me on all social media.
As always, have a look around and notice the freedoms and opportunities this wonderful world affords you, and stay grateful!
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Cryptonomics - Facebook's Crypto World Domination - The Libra
SO, you cite Cambridge Analytica, "helping Trump" but were you aware that FB analytics, GOOGLE Analytics, and WEB -BOT (best of the three) all predicted a Trump LANDSLIDE?
You cite the Cambridge Analytica example like it's a bad thing. We dodged the Evil Killary Klinton Kabal!
WHEW!!! 😅
It was the law of Unintended Consequences biting ZUCK in the A$$ in reality 😎
I will never use a Facebook coin. I only go on Facebook these days to encourage friends and family to leave Facebook for Steemit and Minds.
I like to think that most people who joined steem and crypto indusrty in general are actually running away from centralized enteties such as facebok, instagram, banks...
If you are part of this (r)evolution i believe you won't even think about joining freaking facebook that will most likely be centralized in every aspect. I would rather " die" than join them, maybe for some short term profit, haha.
Great post! Here goes the shittiest alt-coin ever. Hopefully people won't buy into it. In the long run awareness may bring more people into decenytralized coins as well. Double edge sword as always with Facebook.
lmao I love how you're promoting yourself on Facebook at the bottom of this post
I can see the irony. But I'm not saying Facebook is all bad. I still use it every day, and it has helped me gain exposure for many projects. But as we've seen in the past, when a service is very convenient, we must be more critical of which direction it's taking
This post has been resteemed!
Thank you!
You're welcome!
According to a Reuters report, Facebook registered a new company, Libra Networks, in Geneva on May 2. This coincides with the slow roll-out of their internal cryptocurrency that will define the company’s first foray into blockchain technology.
Facebook Global Holdings is a stockholder in the new company and it will, according to Reuters, “provide financial and technology services and develop related hardware and software, plans submitted on the Swiss register reveal.”
Facebook’s march towards crypto has been slow and steady. The company’s latest move, the hiring of two Coinbase compliance managers, happened on May 14.
The Libra project has ruffled some feathers in Congress, as well. US lawmakers sent an open letter to the company seeking clarification on the currency’s purpose and implications.
They wrote:
The Wall Street Journal recently reported that Facebook is recruiting dozens of financial firms and online merchants to help launch a cryptocurrency-based payments system using its social network. Last year, Facebook asked U.S. banks to share detailed financial information about consumers. In addition, privacy experts have raised questions about Facebook’s extensive data collection practices and whether any of the data collected by Facebook is being used for purposes that do or should subject Facebook to the Fair Credit Reporting Act.
Facebook declined to comment on the new company. Recent rumors pointed to a tentative $1 billion raise to be used to build out the technology.
Source: https://www.coindesk.com/facebook-registers-secretive-libra-cryptocurrency-firm-in-switzerland
A large section of Facebook users are oblivious or indifferent to the discussion we are having here. Most of these users are not tech savvy and that is one of the reasons why they are oblivious or indifferent to our discussion. And precisely because of this reason the adoption of Libra by this group of people is likely to be muted.
However, even after discounting for this group and those who dislike Facebook for the unsavory things they have done, Libra is likely to be adopted by millions of Facebook users, which we think will be less than 100 million in the first year of its operation.
It will help to get the crypto mass adoption that you guys want, but at what cost?
Did you do it?
Nice one
Good post! Thank you for this post!
Your crypto post is great ..
hi speek spanish
No hablo español.
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A valuable read for me! I have strange alarm bells ringing because It seems similar to another project white paper that I have been following, Element Zero — whether there’s an actual co-relation or not who knows! Element Zero foundation is a not-for-profit organization with a stablecoin that completely removes volatility. So, I’m not too keen to get on board, knowing that solutions are already out there, who don’t have a bad history. Facebook had a big name and following once, but the platform is declining in popularity and many of its recent developments seem to be grasping at straws. Libra as development is not strong enough to bring a company that’s already in decline back.
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Keep it up
Amazing...
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I posted about this topic exactly a week ago. I got told I was putting out FUD.
Do Facebook make an airdrop to distribute there coin for free to masses.
Time will tell.. Facebook getting any benefit from Libra
If this it happened many people change their lives
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EXCELENTE POST! I liked it me :D Hello I'm Venezuelan and can you see my first post presentation? that would help me a lot.
Although facebook have spend too much to develop fb coin structure, they have to be supported by steemit to be successfull. Because steemit have a big cryptocurrency experiance and this is very valuable. Thank you for this important post
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Congratulations @cryptonomics1!
Your post was mentioned in the Steem Hit Parade in the following category:
Oh, wow...
farmville anyone? the casino gulag gets facepuked
Great post. Interesting to see how this will workout on facebook.
Hello, please, you can give me a little steem. for my baby's milk greetings from venezuela
creo que seria una muy buena estrategia en el mundo de las criptos , asi hayan muchas dudas al respecto del manejo de facebook , es una puerta para que haya conocimiento y aceptacion mundial
i wont use crypto on fb...has no sense
Keep up great content 👍🏻
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Do you trust the little emperor Zuck?
I deleted my facebook account a few weeks ago.... I'll never go back.