From Timelines to Blockchains: Facebook’s Foray into Digital Money
Social media giants are always up to something new. It might be something like adding new features to their websites or mobile applications. Perhaps they are making waves in the news headlines with some new data or privacy scandal, or something else entirely. Social media giants always have something new going on.
This couldn’t be truer for Facebook. Facebook has been in the news more than any other major player. It revolutionized the way we connect with our friends. It bought two other major social platforms (Instagram, WhatsApp), and acquired a virtual reality startup (Oculus). It has been reamed for shady data collection practices and privacy scandals. Now, Facebook is grabbing headlines for something else entirely, developing its own cryptocurrency.
In June of 2019, Mark Zuckerberg publicly announced and confirmed that Facebook is indeed working on a new form of digital money, dubbed Libra, and opened up the websites that accompany the Libra Project. This includes Calibra and the Libra Association, too. The news immediately sent shockwaves through both the social media and cryptocurrency communities.
Facebook’s Libra: Just What is It?
Facebook’s announcement that it is working on a brand new cryptocurrency of its own has rocked both the social media and crypto communities in the last few weeks. Facebook, along with several other companies and financial businesses are teaming up to form the Libra Association. This association will act as a nonprofit and independent organization that will be in charge of the launch and further government of the coin.
Members of this Libra Association include high-profile companies in several industries from telecom, finance, technology, blockchain, and more. The Association consists of Facebook itself, PayPal, Stripe, Lyft, Spotify, Uber, Vodafone, Coinbase, Mercy Corps, eBay, and many more. Facebook hopes to have 100 partners in the Libra Association by the time of launch.
Facebook released a Libra whitepaper detailing the grand vision for the Libra currency. Just a few of the key points from it were:
- A new programming language was written specifically for the Libra blockchain. Called Move, this new programming language was built for the development of smart contracts on the new Libra blockchain.
- Libra will be open-source. Like most other major cryptocurrencies, Libra’s code will be open-source, enabling developers to build applications on top of it. These could include third-party wallets with special features or something else entirely.
- In the beginning, the Libra blockchain will be permissioned. Unlike most other major cryptocurrencies, which have permissionless (which means anyone who wishes to can run a node) blockchain, Libra’s will be permissioned. This means that only companies approved by the Libra association will be able to run nodes and validate transactions. Though they hope to move it to a permissionless system in a five-year timespan, this takes away from the notion that Libra will be decentralized.
Libra in the News
Libra has made headlines recently in many news outlets. In several Senate hearings regarding the cryptocurrency, Senators slammed Facebook for “launching into a new business model instead of cleaning their house up.” Others slammed Libra as something that could not be trusted without regulation, citing Facebook’s lack of concern for user privacy and sketchy data collection practices that have made headlines in the past.
It will be interesting to see how the Libra project shapes out with all of the controversy surrounding it, with Facebook and the Libra association trying to launch the currency in the first half of 2020. Representatives, including Maxine Waters, are asking for Facebook to stop the development of Libra until Congress is able to review it.
With Facebook being famous for data collection and privacy scandals in recent years (including the most famous incident–the Cambridge Analytica scandal–which saw Facebook fined five billion dollars by the FTC for violations of user privacy), it is no surprise that many don’t have much faith in the Libra project.
What Could Libra Accomplish, Anyway?
If Facebook’s vision is realized and Libra is launched, it could achieve several things. The first thing Facebook and the Libra Association need to work on is making sure that Libra is transparent and trustworthy, like other cryptocurrencies. If done correctly, Libra could:
- Open public awareness of crypto in general. With Facebook’s reach (2 billion Facebook members and counting), Libra could expose more people to the idea of cryptocurrencies, which could help other coins like Bitcoin achieve higher adoption.
- Facilitate easy, fast payments anywhere in the world. Many people in the world are unbanked, and some don’t even want to have a bank account. Cryptocurrencies can help people pay for anything, anytime, to anyone in the world, and only take a few seconds to do it. More people using cryptos like Libra will help encourage businesses to accept digital money as a form of payment.
Libra could do a lot of good for the world if it is done correctly. Facebook is going to have to put some of its shady practices behind it, however, and be fully transparent with the public to make this vision a successful reality. With Facebook being the biggest social platform in the world, it has the means to introduce billions of people to Libra, and that could be good for both the social media giant and the cryptocurrency community, too!
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