Now that Facebook’s officially released the white paper announcing its version of a digital token, here’s a random sarcastic comment that indicates the upcoming challenge:
Now I can finally buy some friends.
He’ll be here all night.
Or, as Axios put it …
- On the positive side, Facebook isn’t allowing privacy or antitrust concerns to thwart its ambitions.
- On the negative side, Facebook isn’t allowing privacy or antitrust concerns to thwart its ambitions.
Whatever the perspective, Facebook’s Libra is here:
In this regard, let’s draw some important distinctions:
- Virtually all fiat currencies are backed by the full faith and credit of the centralized government that issued them;
- Most digital currencies like Bitcoin, Ether, etc, are backed not by a centralized government, but by the complex math that digital miners solve to earn; and
- Some digital currencies like Tether are backed by the value of underlying assets, which are called stablecoins.
Since Facebook has chosen the latter for Libra, here’s a deeper look at them:
As to the concept of a basket of currencies supporting the Libra’s value, that’s nothing new, either.
It’s actually how the euro came to be.
A mega-platform deploying its own currency is also an established practice. China’s WeChat Pay, for example, already accommodates cross-border settlements, which is what Facebook intends for the Libra.
So, what’s the real controversy about Facebook’s commitment to issue a new currency? What else?
Besides trust issues, there’s the matter of the demographic groups most comfortable with digital tokens being Millennials and Gen Z’s, a great many of whom generally refer to Facebook as Instagram for old people.
Somehow, Facebook’s gotta find a way to attract more of them back to the platform. This could be where WhatsApp plays a role, but the moment Facebook acquired it, other messaging apps such as Telegram and Signal experienced a surge in users.
Plus, with the Calibra consortium looking for all intents and purposes like the Illuminati 2.0 and possibly winding up as an actual Illuminati, consumers are gonna have to decide whether they want to exchange government oversight of their holdings in favor of corporate supervision.
On the other side of the coin, as it were, Facebook could be doing its bit to bring cryptocurrencies into the mainstream.
Here’s how former PayPal president David Marcus — who’s now spearheading the Calibra consortium — pitches what he says will be Calibra’s insular approach to the market and marketing:
Bitcoin was a radical and necessary idea, but to date, it and others blew it by becoming more of a marker for speculators than a widespread means of exchange.
Facebook is clearly designing Libra to be business-friendly and, from a currency standpoint anyway, less threatening.
The first wave of cryptocurrencies represented a radical revolution in how the future of money could look, kinda like how the Internet itself was a radical revolution in the future of information.
In its World Wide Web stage, the Internet may have gone mainstream, but it did so warts and all.
Only in recent years has it come to light that Big Tech‘s been as Wild West in terms of its cavalier handling personal data that cryptos continue to be in terms of its financial ambiguity.
Facebook’s right in the thick of one corral with guns blazing, and now it’s determined to stick Libra in the other and bring the Earp brothers along this time.
Actions will speak louder than spins.