Facebook Libra Coin Initial Reactions
Cryptocurrency is making headlines every day. From Bitcoin to Ethereum, it seems like blockchain-based currency is here to stay. With those two cryptos to serve as a sort of proof of concept, it’s no surprise that Silicon Valley and big business have taken notice and are now looking to jump on the crypto-bandwagon with a coin of their own.
Specifically, social media giant Facebook announced on June 18, 2019 that they would be forming a new Facebook subsidiary with the goal of offering financial services to the world. The first product set to be launched by this subsidiary is Calibra, which will serve as a digital wallet for Facebook’s crypto coin which will be known as Libra.
By now your head might be swirling with all of this talk about Facebook, Calibra, and Libra, so let’s take a moment to explore what Libra is and why those in the world of cryptocurrency should care about its arrival.
What Is Libra?
It might seem like an oxymoron that Facebook of all companies would enter the realm of cryptocurrency. After all, crypto was created largely in an effort to keep transactions private and yet Facebook is notoriously known for its invasive privacy practices.
Despite that apparent conflict, Facebook insists that “Calibra will not share account information or financial data with Facebook or any third party without customer consent.” However, they do acknowledge that user data may be shared in an effort to “keep people safe, comply with the law and provide basic functionality to the people who use Calibra.”
Libra is slated to launch in 2020 alongside Calibra and Facebook is obviously hoping to draw in users through their promise of ease-of-use, which is something that previous cryptocurrencies have been seriously lacking. With Calibra, Facebook states that you will be able to send Libra to just about any smartphone with no more effort than you encounter when sending a text and at low to zero cost.
According to Facebook’s announcement, their motivation in creating this coin is to make it easier for people around the world to gain access to financial services. They are particularly keen to help those in developing countries because, for much of this segment of the population, basic financial services are still out of reach.
In order to track transitions, a network of nodes will be used to verify transactions and to store the continuously updated record. This is where some other big businesses come in because Facebook has enlisted several companies, including PayPal, Visa, and MasterCard, to become a part of the consortium that will be tasked with governing this digital coin.
With all that Facebook hopes to accomplish with Libra, one has to wonder if they will be able to deliver. At this point, the best way to get a glimpse into Libra’s future is to consult the experts in order to gauge their reactions.
What do Experts Think about Facebook Libra?
When you consider the fact that the crypto-community is a wary bunch, it doesn’t really come as a surprise that initial reactions to this news of a blockchain currency that’s backed by Facebook have been mixed. Some are intrigued, many are skeptical, and a few are taking an open-minded approach. Not surprisingly, the Twitterverse was abuzz with the news of Libra after its announcement.
Neutral and Yet Amused Reactions
Bitcoin advocate Andreas Antonopolous’ views on Facebook’s Libra at this point were neither positive nor negative, but more along the lines of amused when he said: “While Facebook’s Libra doesn’t compete against any open, public, permissionless, borderless, neutral, censorship-resistant blockchains, it *will* compete against both retail banks and central banks. This is going to be fun to watch.” — https://twitter.com/aantonop/status/1140937902081417216
Negative and Skeptical Opinions
Ryan Taylor, CEO of Dash Core Group, was less than enthusiastic about what the future will hold for Facebook’s Libra when he remarked: “Obviously early days, but my initial impression of Libra is that it’s another MCX. Never heard of it? Exactly. Led by Walmart, it was a smartphone-based payment system launched with great fanfare back in 2012 with an impressive list of retailers. The problem?” — https://twitter.com/RTaylor05/status/1140998048631287808?s=19
Blockstream CSO Samson Mow, meanwhile, wasn’t very impressed by the prospect of Facebook’s crypto coin when he Tweeted: “Looked at the Libra white paper. It’s not very interesting. Just another centralized coin. You can’t start out centralized and ‘become’ decentralized.” — https://twitter.com/Excellion/status/1140942940946092032
United States Senator Sherrod Brown, who is the top Democrat on the Senate Banking Committee, even weighed in when he made this observation about Facebook’s current position of power in the world scene: “Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight.” — https://twitter.com/SenSherrodBrown/status/1141039013916303361
Open-minded and Even Positive Views
Expert reactions to Facebook’s Libra haven’t been all bad. For example, blockchain researcher Peter Todd had positive comments when he observed that: “…basing your distributed database on a blockchain is best practice these days, as it makes auditability much easier internally. Especially when you’re running the database as a partnership. Libra is doing that obvious thing right.” — https://twitter.com/peterktodd/status/1141076051902304261?s=20
Meanwhile, ShapeShift CEO Erik Voorhees urged everyone to keep an open mind when he observed that: “Libra deserves nuanced analysis, it is neither ‘great’ nor ‘horrendous.’ This brings up an important point too often missing in discussions of crypto: digital assets and blockchains have *many* attributes, optimizing for certain ones can detract from others, and that’s okay.” — https://twitter.com/ErikVoorhees/status/1141063099534811136
What This Means for the Future of Facebook Libra
If early opinions are any indication, then Facebook certainly has an uphill battle to change the minds of skeptics, but the news isn’t all bad since a portion of the crypto community is at least keeping an open mind. Ultimately, only time will tell whether Facebook will be able to win over the experts who are, as yet, unconvinced by the prospect of a using a crypto coin created by this mega-corporation.
However, one thing is clear, privacy is a big factor when it comes to crypto, so Facebook will need to work hard to overcome their reputation of invasiveness in order to win over the majority of the crypto community. It is only through efforts such as this that Facebook will have any hope of making Libra a success.
