Facebook succeeded in at least one part of its new digital currency grand plan: get a spotlight.
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 scrutinise this closely to ensure users are protected.”
What about over in the cryptocurrency 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.”
Hm, yes, interesting, fascinating. Let’s tune into Reddit to see what they’re bringing to the discussion. First, a new propaganda-style poster. Second, the comments that follow.
Screenshot: Reddit /r/CryptoCurrency
Tremendous as always, Reddit.
Actually, 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.
Jerry Brito, executive director over at the research non-profit CoinCenter, raised important questions about the future of Libra:
As far as I’m concerned, this is the most important paragraph in all the materials released today. Knowing some of the folks behind this, I don’t doubt the sincerity of the sentiment. But I’m having a hard time understanding how Libra becomes permissionless. pic.twitter.com/Eep3VFK2U4
— Jerry Brito (@jerrybrito) June 18, 2019
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 — incentivised, 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-dollarisation of the world.”
The Johns Hopkins cryptographer Matthew Green sees far darker possibilities:
I don’t think it’s possible to express what a catastrophic regression this thing is going to be. Say what you want about Visa and the legacy banks, they don’t broadcast your transaction details to the world.
— Matthew Green (@matthew_d_green) June 18, 2019
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.
On the other hand, maybe this is more relevant to you:
Here’s my reaction to the Fb Libra news: pic.twitter.com/G4zNNt2Hck
— Whitney Merrill (@wbm312) June 18, 2019
Featured image: Chip Somodevilla (Getty)