Underpinning all of this will be the security and transaction verification Facebook promises its blockchain-based Libra network will provide. There will also be a real identity component to mitigate the risks that Libra will be used to facilitate crimes. Another company could theoretically build an anonymous Libra wallet, though, so the mitigation here is primarily to Facebook’s reputation.
Weil says Calibra will require you sign up with a government-issued ID, and Facebook’s digital wallet will also provide fraud protection and a public commitment to never share your financial details or transaction history with the social network’s advertising divisions. In other words, your Facebook account data will largely be kept separate from your Calibra account.
Nick Statt
Yesterday we received confirmation of an earlier rumor about Facebook developing its own currency, and nothing about this announcement made me change my initial impressions on the idea. After the recent scandals, data breaches and revelations uncovered over the past years, how would anyone in their right mind trust Facebook with their financial transactions, and possibly their earnings and savings?!
Let’s break down some of the reasons you should stay safely away from this upcoming train wreck:
- A ‘real identity component’, tied to your Facebook account – as if that would be any guarantee of authenticity. As per their own disclosures, Facebook regularly shuts down immense numbers of fake accounts. But, with the right tools, I suspect there will only be a couple of minutes delay between creating a fresh account and being able to transfer large amount of Libracoin to any other recently created ID. If Facebook’s automated systems fail to take down these accounts in time, here’s a massive source of fraud and untraceable funds flowing through the world economy with no oversight.
- But you will need a government-issued ID, right? Hmm, I’m skeptical this would help. On one hand, this reeks of Facebook trying to grab even more personal data for free. On the other, on the company’s scale, this process will surely involve some sort of AI validation, as nobody will hire actual people to manually check the IDs. But AI systems can be gamed (and you probably only need to fool the AI for a couple of minutes, as I said above), and with Facebook consistently failing to take down hate speech, can we really expect it to correctly recognize IDs from hundreds of different countries and languages around the world?
- But the transaction data will surely be kept separate from Facebook right? Well, that’s what Facebook always promises, only to do exactly the opposite in secret. One single, but very relevant, example is how they used phone numbers that users provided for security purposes to target them with ads.
- There’s also the issue of revenue, as in how is this ‘nonprofit association’ overseeing the project supposed to sustain itself. Are the members going to subsidize it indefinitely? And if so, what will they gain in return? Will they get access to the data collected on users and transactions flowing through the system? Will people be comfortable sharing these sensitive details with Uber, Lyft, and the numerous other partners? This feels entirely as yet another product centered on the flawed Silicon Valley mantra of scale above all; ‘Fake it ‘till you make it’, ‘Move fast and break things’ and so on.
Libra could be a social-good venture aimed at “empowering billions of people through the creation of a simple global currency and financial infrastructure” but then again — from the details revealed — it could also be an attempt to gain control of the money supply by a corporation most people think already has more power than it should.
As usual, the truth depends on how things are framed.
But in this post, we're going to argue Libra is nothing more than a brazen attempt to override national monetary sovereignty by creating a global-scale Federal Reserve equivalent — within which Facebook's dominance is veiled by the cunning use of buzzwords like blockchain, DLT, decentralisation and cryptocurrency.
Izabella Kaminska
The more I think about it, the more I come to the conclusion that Mark Zuckerberg is a straight-up megalomaniac that will not stop until he amasses all the power he can get his hands on. I mean, who names the currency by referencing the Roman empire and launches at the historic San Francisco Mint, a building that once housed one-third of the United States gold reserve? This time around though, regulators are at least keeping an eye on this, both from the US Congress and the European Union. And with good reason, given the recent examples of foreign money used to influence US elections and UK’s Brexit referendum.
the logo looks more Aquarius ♒ than Libra ♎ though
If we were inclined to give Mark Zuckerberg a pass after his first blunder with fake news, this second time he cannot be allowed to use the same “I had no idea this would happen” defense. If he hasn’t leant the lesson, this time it’s no longer negligence, it’s malfeasance.
But Facebook, right now, is being very open about its plans to remake the world’s financial systems. People may even welcome that: In the global banking industry, Facebook has probably found the one group of corporations less liked and less trusted than itself. But if you think Facebook is powerful now, just wait until it’s, essentially, the global federal reserve, overseeing a global currency over which it has not just monetary control but a visible, minable record of every transaction made.
Max Read
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