Facebook's Cryptocurrency "Libra" Thread

All the signs are that Facebook is about to launch its cryptocurrency on June 18, a project known internally as Libra. So what are the implications of a company with 2.4 billion users launching its own currency?

Strategically, the movement makes sense for Facebook: at a time when many question the its dominance of social networks and when a majority of its own shareholders say they want to see the back of Mark Zuckerberg, the company announces a very ambitious project of universal appeal giving it a central role in the world economy, in the wake of innumerable cryptocurrency projects of dubious legality, irresponsibly speculative and wasteful in terms of energy, aimed among others at people in countries with unstable currencies or limited banking penetration. As Jack Dorsey has said, this maybe the perfect moment to create a universal currency for the Internet era, reflecting the trend toward a universalization of the world. However, what is less clear is whether this currency should be in the hands of Facebook.

Technically, the project is not terribly interesting: although the company has hired a lot of talent with experience in the world of cryptocurrencies, what it has built is a stablecoin anchored to a basket of currencies, securities and organizations to avoid excessive control by a single player (including Facebook), and thus any potential speculation: the company has spoken with financial institutions to provide capital in the form of billions of dollars of international fiduciary coins and low risk securities as collateral to stabilize the price of the currency. Companies interested in operating a node have to contribute $10 million to validate transactions with the currency, to vote in future operations and above all to avoid argument about Facebook’s excessive power. The company plans to cede control of its cryptocurrency to an external independent foundation based in Switzerland.

Facebook’s currency can be transferred at no cost through Facebook products, including Messenger and WhatsApp, and the company is working with retailers to accept it as payment, which may involve commissions and possibly some agreement with ATM network managers to allow exchange with other currencies. There may even be incentives for users ranging from payment for advertising to promotions of schemes similar to loyalty programs. The company may even pay interest to users for deposits in its currency, a move designed to avoid suspicion of the company holding onto interest.

In addition to the attention the project will attract, including from the regulators, it will raise awareness of cryptocurrencies, dynamizing the environment and possibly helping it evolve. Facebook’s currency is designed to be user friendly and as easy as any other conventional currency, allowing everybody, not just the experts, to join it.

The currency will also allow us to know once and for all how many real users Facebook has: they will all need to be identified in order to prevent money laundering or other criminal uses. This will be particularly important in failed states or where few people have bank accounts.

In many ways, a universal currency, drawing on the experience of other cryptocurrencies and aimed at populations who for many reasons are outside the traditional economy sounds like a good idea. However, the problem is that the company behind has the worst reputation for privacy, along with ethical standards that have seen it involved in accusations of electoral manipulation and even genocide. As far as Facebook is concerned, its users are raw material, and the idea it would have access to my financial records terrifies me.

I don’t care if it tasks other companies with managing its new cryptocurrency: in the past, Facebook’s problems have emerged after it made accomplices of the companies that invested massive sums in advertising on its network: it has shown no compunction in alienating them, turning them into slaves who believe that Facebook is the answer to all their needs and that it is worth betraying every principle to get their advertising in front of potential buyers. This is what makes a potentially interesting project so frightening: because I know that any potential misuse of it will be allowed by a company that, until now, has allowed every other kind of wrongdoing. In the context of the global economy, anybody who refuses to take the right precautions can do a lot of damage. Let’s hope I’m wrong.

[HT: Forbes]

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Well guys I told you on Friday the 14th that we would see articles that would say that FB is the one to heal and save the world, bring access to banking and financial tools…

Wasn’t it supposed to be BEET?
Or ICX?
Or NEO?
Or LTC?..

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Yea, I don’t like It and I don’t trust Zuckerberg. Seems like the U.S regulators want us investing only in centralized coins. I just hope in the end Bitcoin or any decentralized currency ultimately wins. :pensive:

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Maybe people will need to get hacked & lose their money in order to realise centralised systems are not an option anymore.
Regulators will then step in and say it was a stupid idea to have value in a centralised trust.
Then they will get back to BTC.
Better for the crypto market in the long run.

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Facebook coins success should not come as a surprise to anyone who is woke. IF it doesn’t succeed, (which I believe it will) another centralized crypto will. Those who hold the power will not lose it. They only gain more. Sadly, most people give it to them for the sake of convenience.

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Almost 100 people? Nice

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No dang notifications… go figure :roll_eyes:

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I think Tether should be afraid of this Fb currency .At least Fb has funds to back its currency unlike tether who just prints some fishy new “money” all the time. Maybe we could see the end to “tether fud”. Either way Fb entering into cryptospace is good news in my opinion.

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And this should be called Zukercoin…or Suckercoin…not a chance that i would let FB know anything about my financials. No thanks.

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If it brings in more liquidity for bitcoin then it’s all good. If BTC is in an uptrend people will trade zuckerbucks for :btc:. Bitcoin isn’t stable. It’s been going to the moon for the past 10 years

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In case you missed it, we hit on this topic on the weekly livestream last friday.

Some of its old news now that we know a little more about Libra, but the discussion is still relevant.

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via theblockcrypto.com

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QUICK TAKE

  • Dozens of companies are set to be a part of the governing association of Facebook’s cryptocurrency
  • Here’s a map of the members set to be made public on Tuesday

Facebook has been quietly building out its cryptocurrency for over a year, and it looks like that time has been well spent, enlisting the support of some of the most prominent companies across payments, retail, and technology.

As recently reported by The Wall Street Journal, Facebook’s cryptocurrency will be governed by a consortium of firms known as the Libra Association, which includes the likes of Visa, Mastercard, and PayPal. But The Block has gotten its hands on consortium marketing materials and can now report dozens of firms not previously known to be involved, including investors such as Andreessen Horowitz and Union Square Ventures, cryptocurrency exchange Coinbase, and non-profits including Mercy Corps. Calibra, a subsidiary Facebook formed to oversee the social media giant’s crypto efforts, is also among the founding members, according to a source familiar with the matter.

Here’s a full list of the Libra Association founding members, which Facebook is set to officially announce on Tuesday:

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A person familiar with the situation said Facebook charged some members $10 million to manage their own node, which allows members to access and view the network. Originally the company had ambitions to get Wall Street involved, but found a lack of interest among institutional giants like Goldman Sachs and JPMorgan. It is still looking to have 100 members in the governing association, the person said.

Here’s everything we know about the project:

This funding from the consortium members will back the coin, which will be pegged to a basket of currencies.

If successful, Facebook could net $1 billion from the 100 companies it hopes to include in the project. Each of these nodes will also reportedly get a seat in the Libra Association as node operators, sending a representative to the consortium.

Reports of a Facebook cryptocurrency began circulating in May of 2018, when Cheddar reported the social media giant had begun looking into blockchain nearly a year prior. Facebook then announced David Marcus, vice president of its Messenger app and once-member of Coinbase’s board, would lead its blockchain efforts. Prior to Marcus’s appointment, Morgan Beller, a member of Facebook’s corporate development team, was the only employee studying blockchain.

Since then, Facebook expanded the project and talk of a stablecoin increased with each step the company took into the blockchain world.

In May of this year, Facebook registered Libra Networks LLC in Geneva, Switzerland, where it is working on blockchain developments, according to its register. BBC later reported that the company is looking towards a Q1 2020 launch of the coin, and has plans to begin testing it later this year before launching in a “dozen” countries.

Ahead of the launch of its whitepaper, rumored to surface later this month, the company has been posting blockchain job ads. Additional openings were posted this week.

The coin may be used as a payment for messaging apps, among other things. In December, Bloomberg reported the coin would let users transfer money through its WhatsApp messaging service. The New York Times reported a few months later in February of this year that the project had moved to a place where Facebook was discussing selling it to consumers and was in talks with crypto exchanges.

If that’s true, there is a demand, according to a study from LendEDU, which found the coin could entice new users to crypto, and could be bolstered by use through Facebook’s Marketplace feature.

Though a whitepaper has yet to be published, concerns of regulation have already arisen. In the wake of the Wall Street Journal’s report that Facebook was recruiting investors to launch its cryptocurrency, U.S. Senators on the Banking Committee addressed an open letter to Facebook founder Mark Zuckerberg inquiring how exactly the coin would work, among other concerns. The Commodity Futures Trading Commission (CFTC) also told the Financial Times it was in early talks with Facebook and that no formal application has yet been submitted. CFTC Commissioner Christopher Giancarlo said the body is still considering whether a Facebook cryptocurrency would fall under his agency’s jurisdiction.

Facebook has also brought on UK Standard Chartered lobbyist Ed Bowles as its London-based director of public policy to push the cryptocurrency, according to the Financial Times.

Below is our own map of Facebook’s Libra Association, broken out by industry.

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Blockchain

Coinbase – cryptocurrency wallet and exchange platform

BisonTrails – infrastructure-as-a-service company. Its platform enables a variety of features including staking, validating, voting, transacting and securing blockchain protocols

Xapo – cryptocurrency custody provider

Anchorage – custodial service for digital assets

E-commerce

Ebay – e-commerce corporation that enables consumer-to-consumer and business-to-consumer sales through its website

Mercado Pago (MercadoLibre) – Argentine e-commerce site incorporated in the U.S. with an online marketplace and auction

Farfetch – online platform for luxury fashion

Investment firms

Andreessen Horowitz – venture capital firm founded by Marc Andreessen and Ben Horowitz

Union Square Ventures – venture capital firm based in New York City

Creative Destruction Lab – seed-stage program for scalable, science-based companies

Ribbit Capital – venture capital firm that invests in early-stage companies

Thrive Capital – venture capital firm focused on internet and software investments

Nonprofit

Women’s World Banking – uses a network of 40 independent micro-finance institutions and banks provide support to entrepreneurs in the underdeveloped world with an emphasis on women

Kiva – 501 non-profit organization that allows users to lend money to low-income entrepreneurs in over 80 countries through its platform

Mercy Corps – global humanitarian aid organization that provides support to regions hit by disasters, whether they be economic, environmental, social or political

Payments

Visa – payments technology company

Stripe – technology company where businesses can send and receive payments over the internet

PayPal – operates a worldwide payment system

PayU – assists online businesses with accepting and processing payments

Mastercard – global payments provider

Ride-share

Lyft – transportation company that offers ride-sharing

Uber – ride-sharing platform

Social Media

Facebook (Calibra) – subsidiary Facebook created for Libra

Telecommunication

Vodafone – British multinational telecommunications company

Illiad – French provider of telecommunication services

Booking Holdings – provider of online travel

This post has been updated to clarify that Facebook didn’t charge certain organizations a license fee to manage a node.

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Visa…Mastercard…Paypal…Stripe…Ebay…talk about legacy tech backing lol

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TFW a large group of heavily armed hijackers get on your plane and you can’t do shit about it

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Yes sir. That’s a pretty good analogy.

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Libra has none of the properties that make Bitcoin valuable. And offer no solutions that don’t already exist within the legacy finance system.

Hodl on.

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but can you get discounts on your favorite consumer indulgences with bitcoin? haha checkmate satoshi !!!

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Chainlink as an oracle provider would make perfect sense here…:wink:

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My man Sauce comes in with the hidden gem.

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Thanks Mr Zuckerberg for making BTC purchase easier for grandma and dad.
They can now buy BTC with a swipe using their facebook account!

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