Finally! Facebook announced its own cryptocurrency. Libra, that is the name. The biggest SM website in the world enters the crypto world. But is it such a great news after all?
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” – Warren Buffett
Too many promises
In the last two or three weeks, a lot has been said about Libra cryptocurrency, a Facebook’s digital coin. There were analyses, comparisons, and predictions of what Libra can be. If you don’t know much about the announced crypto, you should definitely read the Mikołaj’s piece.
I want to focus on something different. We might not know what Libra will be, but I am pretty sure what Libra won’t be. And that is the thing that disheartens me to a new social media giant’s development.
First of all, we have that tendency to make a common mistake, that a new, global player will bring the mass adoption and awareness of cryptocurrency. That is just not the case. To understand why, we need to know why Bitcoin was created.
Bitcoin was developed because of lack of trust to centralized, traditional financial systems. It was just after the crisis in 2007 when millions of people lost their investments, funds, even houses due to a bubble created by greedy businessmen. People had put their trust into the hands of banks and other institutions, which failed. Simply failed.
So Bitcoin was designed to balance the power. To give power to the community, not only an elite. That is why Bitcoin was created.
Libra can’t provide that. The basic assumptions behind Facebook’s coin require putting all of the power in the hands of just one entity. That means centralization.
The other thing: Bitcoin is trustless. You can’t reverse the transaction. What about Libra? Would it be possible for Facebook to reverse that if something goes wrong? You need to put trust in Facebook hands, so that of course exclude the ‘trustless’ factor.
The ‘god’ factor is another important issue. Me, you, or virtually anybody can’t shut down the Bitcoin’s network. It is independent of any influences, at least in terms of manipulating the code behind it. Libra will belong to a few companies, which will be able to do whatever they want.
Facebook has sold its Libra’s nodes to various companies for $10 million from each firm. Entities like MasterCard, eBay, Uber, Visa, and several others, will have almost all of the power over Libra.
There are at least a dozen other issues (including India’s part of the story), which haven’t been resolved or explained by Facebook so far.
Trust has to be earned
Facebook’s Libra is more of a shitcoin for me than the real deal. Of course, the social media mogul has all of the resources and means to make that thing valuable.
But, do we really can trust the organization, which is well-known for manipulations with personal data, misleading ads? Can we really put our faith in the hands of people who allowed others to tamper with the US presidential elections? The same platform, which banned crypto ads and censored the news so many times? Can we really believe in something created by greed?
I don’t have any doubts that the answer for all of those questions is: no, we can’t trust Facebook. At least I can’t. If you are willing to, feel free to jump on the bandwagon.
I can’t and I won’t. I don’t believe in that project. It will spread the word about the cryptocurrency industry across the whole world. But do we really need that kind of popularity? Aren’t we smart enough to know that there is such a thing as bad publicity?
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