Suddenly, more people than ever are paying attention to crypto. But to what end?
The crypto community can be a bit of an echo chamber, making it easy to believe the whole world cares about digital currency as much as you do. In reality, 92 percent of Americans had not invested in crypto, as of a March 2018 survey, and less than ten percent of non-investors surveyed expressed interest in doing so.
Facebook, meanwhile, has enjoyed burgeoning popularity since its birth in 2006. It is regularly listed among the top five most valuable brands in the world, and has spent billions buying out a growing list of competitors (Instagram, WhatsApp and Oculus, to name a few). Despite its reputation for dodginess with regard to users’ data and privacy — not to mention its complicity in the fake news crisis — Facebook still has over 2.38 billion active monthly users as of the first quarter of 2019.
The obvious question presents itself: Will Libra, Facebook’s recently announced global cryptocurrency, be the catalyst for ushering in a global digital currency revolution? Or will it end up like Google Plus, just another clumsy attempt to “unseat Facebook” that ends up in the vast graveyard of failed social experiments? It’s too early to say, but hot takes on the issue have multiplied faster than alt-coins after a Bitcoin bull run.
While some major figures in crypto have tended toward supporting the project, the overwhelming sense is that getting the social media giant onboard may simply be a necessary evil. Even the notoriously anti-Zuckerberg Winklevoss twins have declared their intention to be “frenemies” with Facebook on the heels of the announcement. Still, many crypto purists see Facebook as the antithesis of their goal and mission of total decentralization. They cannot imagine any good coming from corporate meddling.
Anthony Pompliano, co-founder and partner at Morgan Creek Digital, said that Calibra, the digital wallet Facebook plans to release alongside its coin, and not Libra, might be the real revelation. “Imagine a world where Facebook’s digital wallet, Calibra, didn’t just custody financial assets, but also allowed you to store and permission your data,” Pompliano tweeted. “One wallet. Every asset you own. Low probability of happening, but high potential impact. Wilder things have happened.”
Indeed, one of the biggest arguments in favor of crypto and blockchain is the technology’s power to help millions of unbanked people worldwide, especially in developing or economically unstable countries.
“Libra holds the potential to provide billions of people around the world with access to a more inclusive, more open financial ecosystem,” said David Marcus, Head of Calibra at Facebook, adding that the platform’s mission is “to create a simple global currency and financial infrastructure that will empower billions of people.”
Others have, however, expressed ambivalence and concern about the platform. Members of the House Financial Services Committee, including committee Chair Democratic Rep. Maxine Walters, have urged Facebook to pause its development of Libra. “Given the company’s troubled past, I am requesting that Facebook agree[s] to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action,” Congresswoman Walters said in a statement.
Then there is a third group: those who hope Libra succeeds, but maintain that Facebook is the wrong custodian for the project, especially given recent findings regarding the company’s toxic internal culture.
Perhaps, as the adage goes, any publicity is good publicity. “I think this is a tipping point for regulation and for mainstream awareness,” said Jeremy Allaire, CEO of Goldman Sachs-backed crypto company Circle. “Anything that Facebook is doing is obviously receiving greater scrutiny from the government’s perspective.”
Allaire, whose company launched its own stablecoin, sees Facebook’s entrance as an overall positive for the industry, adding that the Libra blockchain itself is one of the most “interesting” aspects of the project.
Facebook has announced that Libra will officially launch in 2020 along with its underlying blockchain-based network. It lists 28 companies as “founding members” of its coin.
You can read Libra’s white paper here.