There’s a lot of mention of Facebook Cryptocurrency Libra these days. Heck, at moments it feels like the early days of Bitcoin. Libra is all over the news.
Yet, it doesn’t even exist yet. And it’s only at proposal levels at the moment. What’s the hype then?
What is Facebook Cryptocurrency Libra?
Libra is a blockchain based cryptocurrency, invented(or more precisely proposed) by the Facebook company. And even though a company can create a public blockchain project, this isn’t the case with Libra.
The Libra is planned to be entrusted to the Libra Association, consisting of Calibra(a Facebook subsidiary) and 20+ other big players from finance, technology and similar fields.
In other words, Libra currency, transactions and project as a whole would be handled, owned and directed by a pact of some of the world biggest private corporations.
The list of Libra members was established in Geneva, Switzerland, and it currently consists of 28 members split across 6 industries:
MasterCard, Mercado Pago, PayPal, PayU, Stripe and Visa.
Technology and Marketplaces
Booking Holdings, Ebay, Facebook(Calibra), FarFetch, Lyft, Spotify and Uber.
Iliad and Vodafone.
Anchorage, BisonTrails, Coinbase and Xapo.
Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital and USV.
Nonprofit and Multilateral Organizations, and Academic Institutions
Creative Destruction Lab, Kiva, Mercy Corps and Women’s World Banking.
The list is not a secret, and can be found on the official Libra currency page. They even have some nice graphics showcasing their network:
The problem is, private corporations shouldn’t be allowed to issue their own sovereign currency.
The differences between Bitcoin and Facebook Libra
Bitcoin and Libra are both digital currencies built on blockchain. Yet, there is a fundamental difference- Bitcoin is a sovereign currency controlled by miners, people from all over the world. Libra aims to be a sovereign currency controlled by big corporations.
For many people, this is a major issue. Companies can use blockchain technology to secure their and data of their customers. And that’s a good thing.
But, controlling a blockchain that secures and affects a currency can hardly be called anything but pure monopoly.
This would mean that Libra Association can issue new cryptocurrency as much as it pleases. And this little quote from Wikipedia sums it up well:
Libra service partners, within the Libra Association, will create new Libra currency units based on demand. Libra currency units will be retired as they are redeemed for conventional currency.
Luckily for us, the US politicians have recognized this threat and acted accordingly by calling Senate hearings and questioning the Libra founders. In fact, the Libra project has been bashed pretty bad by politicians and institutions around the world.
Even the US president Donald Trump reacted, saying that:
If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations.
And that’s how it’s supposed to be. Bitcoin is a decentralized system working its way outside of big banks, governments and corporations to provide a fair, non-inflating currency. Libra on the other hand, is an association of big companies, trying to avoid regulation by hiding beside the blockchain technology.
Several key differences between Bitcoin and Libra:
- Bitcoin is a decentralized system, controlled by anyone willing to participate. Libra is a centralized system where Facebook and its associates have lots of control over this financial system.
- Bitcoin has a fixed supply of 21 million, meaning there’s no inflation. Libra on the other hand plans to depend on supply and demand. This means the number of Libra coins will be able to change, causing unforeseen effects, as well effects favored by the Libra Association.
- The Bitcoin blockchain doesn’t require any permissions- if you want you can start mining today. Libra blockchain can’t be accessed without permission from the Libra Foundation.
- Bitcoin is a completely sovereign currency, not depending on governments or institutions. Libra Facebook Currency is tied to national currencies like US dollar and other “stable” financial assets.
Why I stopped using Facebook?
I stopped using my personal Facebook account almost 2 years ago. The move was supposed to boost my productivity, and it has shown great results. But this text is not about my personal stuff.
If you followed my site for a while, you may have seen a Facebook icon that was sitting in sidebar and footer of this website. If not, I don’t blame you, since it took me less than 2 weeks to ditch my Facebook page of this website and replace the icons with Twitter one.
After publishing two posts and trying to market it with Facebook Ads, my ads suddenly stopped being approved. The first two ads went well, followed by multiple denials and endless support chains that lead nowhere.
After some research, the truth has been revealed- “Facebook is banning all ads promoting cryptocurencies, including Bitcoin and ICOs”.
This news is nothing new actually, as it dates back to late 2017 and beginning of 2018. When compared with beginning of work on Libra(late 2017), it’s hard for me to not see a connection here:
Facebook started banning the crypto and Bitcoin related ads on their platform, at the same time as inventing their own centralized cryptocurrency.
They tried to justify their measures under the threat of scam ICOs, but how I see it they don’t like the independent part of Bitcoin and crypto community.
What also supports this stance is that Facebook stopped blocking some of the crypto related material in the last few months, but you have to be a registered business and go through a tedious sign up process.
In other words, you can publish Facebook ads related to Bitcoin, if you’re a legal business and have gone through an inquisition procedure.
What this means is that Facebook simply neglects the privacy and anonymity aspects of Bitcoin, forcing its idea of centralized cryptocurrencies such as Libra.
For me, this is too much. Instead of using a corporate network that forces its own product, I decided that my time will be spent better on Twitter.
For me, Facebook has shown its true face. They want a part of everything, neglecting the core principles of industries they try to integrate into. Unfortunately, their integration seems more like a violent penetration, so I decided to stay away from them.
Did you get in touch with Facebook CryptoCurrency Libra project? If not, I advice you to take a look at their official site and form your opinion. Also be sure to share if you find anything interesting ;)