The Blockchain Futurist 2019 conference took place earlier this month. The event is perhaps the most popular in the industry. It’s definitely the flagship event of the Toronto blockchain scene. CryptoRadar.org was there and with so many notable figures in the room, we couldn’t help but ask influencers and thought leaders for a comment or two on Facebook Libra. But before we go into that, let’s talk about the most recent happenings with regard to Libra and the list of companies racing to create cryptocurrencies that mimic bitcoin but ultimately serve private interests above all else.
The Facebook Libra Announcement
Facebook is investing over a billion dollars to create this stablecoin, and they’re willing to sacrifice credit card payment fees to make it happen. WhatsApp will soon allow users to send and receive money after promising tests in India where over a million people got to try doing so. The company also has plans to improve shopping on Instagram and Facebook Marketplace, which makes sense given that the three apps combined play host to over two billion users.
Here’s the entire video of the Facebook launch event detailing the company’s future plans in all facets of the business:
Potential for Long-Term Profits
So why is Facebook willing to sacrifice earning credit card fees in the short term to make Facebook Libra work in the long term? That’s because the Libra token will earn money off of transaction fees too, and with over two billion people on Facebook, even making the token project a remote success means users from all over the world, particularly those in developing countries, have a built-in reason to stay on Facebook for even longer periods of time, which is arguably the company’s focus. To get people to give up more of their time (and their money).
Making it easier to participate in commerce on Facebook and giving people in developing countries without a bank account access to the financial system is a move that not only enables Facebook to make money off of fees, but also allows the company to show off the power of doing business on the platform, which means more small businesses advertising on the platform, and another way for Facebook to increase its revenues.
It’s the potential for long-term profits that stands as the reason why many companies are signing on as members of the Libra Association, the governing body of the Libra token based in Switzerland that keeps the financial information of Facebook users separate from their personal data and also enables member companies to make decisions about the future of the project.
More on the Members of the Libra Association
As of right now, 28 different companies are members of the Libra Association. Being a member means contributing at least $10 million to the cryptocurrency project, and it means earning a share of the transaction fees and interest collected by the payment platform once it launches. By this time next year it’s expected that over 100 companies will become members.
This is obviously an alarming idea for regulators because it means private companies are working their way into the banking system without having to follow any of the regulatory requirements of doing so. But it’s not just the fact that more and more companies are trying to take control of the money system that’s alarming, it’s the fact that companies that impact every facet of our lives will become members. Current members fit into the following categories:
- Payment systems: PayPal, Stripe, PayU, Visa, Mastercard
- Technology and marketplaces: Lyft, Uber, Spotify, Vodafone, Farfetch, eBay
- Blockchain companies: Coinbase, Xapo, Anchorage and Bison Trails
- Venture capital firms: Thrive Capital, Union Square Ventures and more
- Non-profit organizations: Kiva, Women’s World Banking, Creative Destruction Lab, Mercy Corps and more..
It’s only a matter of time before this list of companies grows to a point that even people who don’t use Facebook or Libra won’t be able to avoid talking about it or at least considering using it because of the potential benefits it may offer to consumers in the long run. This is assuming of course that the adoption of Libra spreads quickly.
How Libra Affects Bitcoin
Google trends shows that searches for the term bitcoin spiked in June, reflective of the all-time highs witnessed in December 2017, when the Bitcoin price flirted with the $25,000 mark. It’s clear that the most recent spike was all thanks to Facebook Libra. It’s for this reason that many bitcoin maximalists and crypto enthusiasts alike see Libra as both a good thing and a bad thing. It’s good in the sense that it draws more minds to the idea of cryptocurrency, but bad in the sense that it’s not a truly decentralized currency.
The next sentiment surrounding the project make sense, especially given that at the annual Facebook conference in April (in the embedded video above), Facebook founder Mark Zuckerberg admits himself that the company doesn’t have the greatest track record when it comes to privacy. During the conference he repeatedly acknowledges how much both he and the company are committed to changing that narrative. However, a recent survey showed that 60% of Americans no longer trust Facebook to take care of their privacy.
Now that the Libra story is cooling off a bit among the general public, the Google search trend surrounding Bitcoin is slowing. But as any experienced crypto enthusiast knows, the market and interest in Bitcoin is cyclical. What goes up must come down and vice versa. So on the one hand, while Facebook is certainly a threat to banks, a threat to take over commerce in the developing world and maybe a short-term threat to bitcoin, in the long run Libra might actually prove why bitcoin is something to embrace. Government regulators are already drawing comparisons between the two that shed a positive light on bitcoin as a genuinely democratic system free of any central authority.
What Crypto Influencers Think About Libra
A lot of what’s going on with Facebook Libra is playing out in the public eye for everyone to see. It only makes sense that some of the most influential mines in blockchain technology and cryptocurrency chime in with their thoughts and opinions. As mentioned, CryptoRadar attended Blockchain Futurist 2019 in Toronto, Ontario, Canada in August. Here’s a rundown of what some of the speakers and attendees had to say about Libra.
Sunny Ray, the co-founder of Unocoin, one of the largest cryptocurrency exchanges in India, was one of the few people interviewed at the conference offering a genuinely positive take on Libra:
“In general I think it’s exciting. Just the fact that one of the largest companies in the world, the app that everybody in the world uses, they are now looking at things like Bitcoin and crypto assets and saying ‘Hey there’s something there…. we should develop something like that.’ I think that aspect of it is super exciting. I think the fact that it’s got the president of the United States tweeting about Libra and this and that is super exciting. The fact that is moving the conversation along is exciting.”
Ray also acknowledges that Libra is too much like a government-backed currency.
“The flipside of that is that it doesn’t stand for anything I value. It’s exciting is a business owner because it gets people excited about crypto assets but then hopefully we can move them to Bitcoin so it’s exciting is an on-ramp, but at the same time when I look at how they are bringing it about, it looks like a traditional Fiat’s token, like all the advantages of Bitcoins are kind of stripped.”
Influencer Michael Nye is the host of his own podcast, Evolvement. He travels the world speaking about current blockchain and crypto trends. He too sees both sides of the Libra coin:
“[It’s]…positive and negative. Positive for the exposure and negative because I don’t want Facebook to have all my financial information.”
Crypto trader and former employee of Wall Street firm Bear Sterns Tone Vays believes Libra might make waves in the developing world but won’t revolutionize payment systems because of several key factors:
“It’s an attempt create private money, but since it’s backed by public money, it’s really not that much different. I think the Libra coin could do a lot of good for society. It can help the developing world have access to a payment system that is better than their current system and a currency that is better than their current currency. But I don’t see it as revolutionary because it doesn’t have the same properties that Bitcoin does. Libra coin is not going to be unconfiscatable, it’s not going to be censorship resistant and it’s not going to have a finite supply. It still follows the same economic rules and compliance with AML laws that the current system is. Nothing changes.
Rachel Siegel aka CryptoFinally, who educates the blockchain community through her talks about bitcoin and mainstream popular culture thinks that at the very least Libra draws people’s attention to crypto. Even if one of those people is indeed the President of the United States of America:
“…people are getting to see that it [crypto] exists, but do I like Libra? No. But it did shine a light on the cryptocurrency community. Donald Trump posted a sh*t post on Twitter about Libra and it was hilarious!”
Perhaps the most poignant and entertaining perspective on Facebook Libra comes from Crypto Twitter star Kenn Bosak. He compares Libra to arcade game-style tokens we probably all became familiar with as children:
“…I mean it’s like Chucky Cheese credits. To me Libra is like similar to Chucky cheese tokens. It’s centralized and backed by fiat. It’s just taking a problem and making it worse using better technology. It’s not something I see a future in. People are going to have to opt in to using it. But they have so many other options including Bitcoin and sh*tcoins X, Y and Z. I don’t think it’s going to see as much success as a lot of the mainstream projects it will. Very similar to how Ripple was the banking coin and now JP Morgan is coming out with their own. I think this is going to inspire others social media platforms like Twitter or Twitch to come out with their own currencies, but they’re all going to be very niche. It’s not going to be a real investment. It’s just a distraction taking away from Bitcoin’s market capitalization.”
While it remains to be seen whether the influencers and dilators interviewed at Blockchain Futurist are right, it’s safe to say that Libra is inspiring people to take a deeper look at bitcoin and other cryptocurrencies, and it sounds like Facebook is in for a wild ride.
That ride will undoubtedly include ruffling the feathers of more politicians and governments, but it will also likely lead Facebook to an even greater influence on the way people use social media platforms and digital currency, particularly in developing countries. One can only hope that the masses eventually wake up and realize Facebook’s vision is to continue to centralize wealth under the guise of offering people the freedom that having access to a financial system can provide.
This will of course contend that the day of reckoning is coming and people will eventually realize that the only true path to democratizing wealth is through completely decentralized, public and permissionless blockchains, not a reinvented social media marketplace.
Speaking of which, entrepreneur and Bitcoin evangelist Andreas Antonopoulos provides a great talk on Youtube called “Libre not Libra” in which he states, “Facebook’s Libra will introduce a billion people to the wrong kind of cryptocurrency just like AOL introduced a billion people to the wrong kind of Internet.”
That joke from Antonopoulos sums up the general feeling about Facebook Libra that many of his fellow influencers and thought leaders share. It’ll be up to Facebook’s user base and the public at large to form their own opinion. Whatever that opinion is rest assured, Facebook Libra is coming in 2020. Whether you like it, share it, comment on it or not.