I know all cryptocurrency sites have written at least 2-3 Libra-posts and all analysts said their opinion about Facebook’s future stablecoin. But, there are some tasks you better make yourself. “Make your homework” – and you, only you will be responsible for wins or losses. That’s because I decided to read the Libra’s White Paper myself.
What is this “cryptocurrency” – if it is one? Let’s see the document line for line (highlights by me):
Finally, mass adoption?
Libra’s mission is to enable a simple global currency and
financial infrastructure that empowers billions of people.
They want to bring this technology to so many people as they can. That should be good news for the whole crypto world, they want clearly a broad, mass adoption. And, it should be “simple” – the masses don’t understand very complicated systems. (Like “Steem+Steem Backed Dollar+Steem Units+Steem Power+Mvests”, sorry.)
a new decentralized blockchain, a low-volatility cryptocurrency, and a smart contract platform
Decentralized. I think the question surges: what can we call decentralized? The system with 100 witnesses is decentralized? I would say so. And a system with 20 witnesses? Perhaps. And with 10? I think we will see who will have the control in reality. In the beginning, Libra will have less witness-like actors, but they want to grow their number to 100 in the long term.
Low volatility. Many economists are blaming Bitcoin and other cryptos for its high volatility. You receive 1000 dollars in cryptos and tomorrow, it is perhaps only 900 dollars worth? That is not a game for everyone. So, low-volatility cryptos, stablecoins can be really a good idea.
Smart contract platform. A huge deal. It seems to be that Libra won’t be only a paying service like Paypal, it aims also the role of many second-generation cryptos providing smart contract abilities. They have also their own programming language for this, the “Move”.
Lobby power?
create a new opportunity for responsible financial services innovation (…) We believe that collaborating and innovating with the financial sector, including regulators and experts (…) is the only way
I think “responsible” in this context can mean: We make an agreement with the authorities and want to make all moves legal. Some analysts are saying Facebook with its multi-billion dollar weight, has good lobbyist capabilities. It may be able to achieve the regulation necessary for the crypto world.
“Experts” means here, other multinational companies. One huge company, actually, is often larger than the GDP of some small European state already. Many multinationals together can have more capital than the economy of Spain, Netherlands or Italy.
Banking the unbanked
In the next part, the white paper describes the well-known situation: The internet brought incredible cheap and broad information supply, but the financial system has not evolved very much:
1.7 billion adults globally remain outside of the financial system with no access to a traditional bank, even though one billion have a mobile phone and nearly half a billion have internet access.
No real news here, but it is very interesting to read the sentences like this in a paper of giant companies. Earlier, only small cryptocurrency or fintech startups were talking about this. But I would say: Facebook is talking too much about banking fees and loans in poor societies. Very probably the company wants a big share of this market some day. Lowering the costs for the user, but ruining many banks, I suppose. Facebook as a lender? Oops! Sounds bad for me.
Disrupting the disruptors?
Mass-market usage of existing blockchains and cryptocurrencies has been hindered by their volatility and lack of scalability, which have, so far, made them poor stores of value and mediums of exchange.
Seemingly Facebook also wants to correct the failures of existing cryptocurrencies, like the volatility mentioned above or the bottleneck problems. (Do you remember the 20+ USD Bitcoin fees of December 2017?) That is not very good news for cryptos, that’s because many analysts are asking: means Libra the end of Bitcoin?
Is there a God? Now, yes.
If you believe Facebook is dreaming in small sizes, don’t do that. If you think I stretched my fantasy thinking Facebook will be a lender, don’t think so. Read this:
We believe that a global currency and financial infrastructure should be designed and governed as a public good.
Designed by Facebook, I suppose. Clearly, they, Facebook and its allies, want to make THE global currency and THE global financial infrastructure. Another detail: Facebook’s currency was called, until the last days or weeks, “GlobalCoin”. This also indicates the Facebook-led consortium of multinational companies is striving for global financial leadership. I hate this idea.
Save Our Souls! (S. O. S.)
(I come back with a second part, soon.)
(Cover photo: Pixabay.com, Warhol-style effect picture: Own work.)
It won’t be low volatility. It’s backed by a basket of currency and securities. It will not maintain a 1:1 peg, specially when the fire hits the dollar and the rest of fiat. Bankers are not going to let corporations move in on their territory like that. It’s not decentralized enough to prevent them from losing this battle. And the number of nodes doesn’t mean decentralization, it’s who has the access to run those nodes. Right now it’s corporations, and soon I’m sure some banks will join to take their piece of the pie. This might be using blockchain, but it’s not a real crypto currency. It’s a controlled currency thats going to burn consumers along the way. When this crumbles, real crypto will still be doing its thing while the world blames cryptocurrency for the crashes, and says blockchain is a failed experiment.
Posted using Partiko iOS
The consortium has dozens or hundreds of billions of dollars of capital, if they want, they can stabilize the Libra. By high volatility, most average people could avoid using it, so, I suppose, they will stabilize it. or, speculators looking the value of the basket.
Anyway, it will be an interesting story.
I think it will be an interesting story. They can’t stabilize the economy without crypto, they aren’t going to be able stabilize it now just because they threw it on a centralized, permissioned blockchain. What they are backing it with is the same garbage de-stabilizing the system now. If it’s not decentralized, and pegged to garbage, it’s not going to change anything. The only thing they have that’s useful is the network effect from users and markets they currently have. People already don’t trust them with their data, this is going to become a nightmare for them.
Posted using Partiko iOS
Big facts.....
They do not have real money. They do not even have central bank money. All they are able to provide is worthless debt. What kind of thinking is leading someone trying to stabilize a currency that is replacing a worthless one with exactly the one that has to be replaced ?
Give me all the worthless dollars, then...
Steem + SBD + Steem Power + Steem Vests + Smart Contracts isn't simple? Lol.
Facebook could make it simple enough to really open the doors to say....Cambridge Analytica.
And what about Google? Last time I checked they are still the biggest tech corp in the world. Google has been eerily silent on the crypto front of late.
They have to have some scheme to cash in on the industry as well, or my name isn't inalittlewhile. Lol.
Steem has 1.3 million "deadfish" and some dozens of thousands of active users. There is something it should make wrong.
Facebook has 2.5 billion active users. It should make something good.
It is not a shame to learn from a competitor. All are making it.
I don't want to live in the world of Facebook.
Steem has plenty to learn. But at least Steem is backed by a network of witnesses that can be voted out. There will not be any voting out the corporations who pay $10 million to run one of those 100 nodes on FB. It’s not decentralized. It’s going to suffer a lot of issues based on that alone. At least Steem is not backed by a basket of fiats. Crypto does not need to be pegged to another asset but they played it safe with regulators and banks by creating a so called stablecoin. It will not stay stable when inflation and the death of the dollar come. All fiats are going to feel that. Any of the securities included in the peg will most likely feel that.
Facebook has a lot of years of mainstream adoption on Steem. That’s something we can learn from. But the problem with adoption on Steem is the level of apps do not quite live up to what FB, IG, and others can do. You’re talking mobile apps with video embedding and live-streaming from the app. You’re talking more than just photo filters, but 360 camera capability, and all the crazy video filters that IG and SnapChat offer in app. You’re talking private groups on FB. They just simply offer more and have a huge development lead that Steem needs to catch up ok. No Steem app offers these yet, and new features roll out quickly on mainstream social media.
The other part is the sign up process and in reality a lot of the content we see. And we won’t even talk about bid bots, and drama relating to disappearing acts we see with delegates Steem to projects that just vanish. All these things are red flags for new people in general, specially if they have a brand, following or reputation to uphold.
But even with those challenges, real crypto is real crypto. And FB is not real crypto.
Posted using Partiko iOS
Volatile market is Good for traders but not with holder that believe in a rich quick scheme overnight.
I mean, it's that not exactly what most crypto investors want to get out of crypto?
Let's use the hype about Libra to introduce real Blockchains and Crypto-Currencies to a wider crowd!
Putting Facebook and Decentralized in the same sentence just feels wrong.... and now I just did it too. oh god....
Facebook libra is using the fact of popularity of FACEBOOK, but how will it compete with BITCOIN. Already BITCOIN has alot of transfer channels, which gives bitcoin an edge.
Apple McIntosh was better and IBM PC with Microsoft won. Betacam was better and VHS won. Etc.
Congratulations @deathcross! You have completed the following achievement on the Steem blockchain and have been rewarded with new badge(s) :
You can view your badges on your Steem Board and compare to others on the Steem Ranking
If you no longer want to receive notifications, reply to this comment with the word
STOPTo support your work, I also upvoted your post!
Do not miss the last post from @steemitboard:
It's more about Libra attract now new regulations, Libra will handle it, but existing crypto projects will have massive problems....
No larger impact for mass adoption but for much stricter regulations..
Posted using Partiko Android