Libra is Facebook’s plan to bring cryptocurrency to the masses — but I don’t trust Facebook enough to use it
- Facebook on Tuesday unveiled "Project Libra," its plan to bring cryptocurrency to the masses.
- The idea is to let people shop on Facebook and other apps, or even pay other users, using a single global currency.
- Libra could be a good idea, but I don't like that Facebook is spearheading the project.
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I use Facebook, but I don't trust it.
That's why I'm skeptical of Facebook's new Libra, a new cryptocurrency that the social network is spearheading.
Here's how Libra is supposed to work:
- Libra will be an independent cryptocurrency. Facebook engineers are making significant contributions to the code base, but the company says it will become more decentralised over time.
- A new non-profit called the Libra Association will oversee Libra, with Facebook's participation, but crucially, not its control - at least, in theory.
- Facebook really wants you to trust the Libra Association: It's based in Geneva, Switzerland (neutrality!), and while Facebook has a vote at the table, it theoretically has no more power than anyone else in the group, which is currently comprised of 28 different companies.
- Facebook also built a new subsidiary, called Calibra, which will build financial software and services on top of the Libra blockchain, including a payments app. Calibra will make it possible to send Libra through Messenger, Instagram, and other Facebook apps.
This tweet sums up the benefits pretty well:
Libra is a big deal.
- Blockchain without proof of work or value volatility (so no environmental footprint or wild coin speculation)
- Inclusion of payment processors for wide real world support
- Commercial grade wallet built into apps used by billions
- Backed by real currency — Ben Werdmuller (@benwerd) June 18, 2019
Why you might use Libra
Libra is built upon three compelling pillars:
- Convenience. Libra will eventually work in every Facebook-owned application, and include businesses from around the world - likely including Spotify, Lyft, and Uber, which all signed on with the Libra Foundation. You don't have to do any fancy currency exchanges, and it all works right in the app. Given how many people and companies use Facebook apps, buying things and sending money around should be pretty easy.
- Security. Facebook says Calibra was created so your financial and account information stays separate. Facebook also says Calibra apps will keep your transactions private, include fraud protection, and offer 24/7/365 support in Messenger and WhatsApp.
- Stability. Cryptocurrencies have a reputation for being volatile, which is why Facebook-owned Calibra promises that "Libra is backed by a reserve of assets so that its value stays stable." We'll have to see about that!
On paper, Libra sounds like it might be a compelling cryptocurrency. It's being backed by one of the biggest tech companies in the world (Facebook), it'll be available in apps that you use every day, it promises privacy and security, and it aims to be more stable than other cryptocurrencies.
Still, I have no plans on using Libra.
Why I don't trust Libra
Facebook doesn't want you to think that Libra equals Facebook.
In fact, if you visit the newly-minted website Libra.org, you won't find a single mention of the word "Facebook" on its homepage. Facebook and Calibra, the company's new subsidiary that will build financial services and software on top of the Libra blockchain, are only mentioned halfway down the page of "founding members," after eBay and some group called Booking Holdings. This is the only instance where Facebook and Calibra are mentioned on the Libra website (save for one image that includes all of the companies participating in the Libra Association).
Facebook seems to be going out of its way to separate itself from Libra, with Calibra designed to be the intermediary.
But Libra and Calibra are ultimately Facebook products.
Yes, they may eventually evolve to become completely differentiated and decentralized, and the Libra Foundation is insisting that it's out of Facebook's control. But make no mistake, this initiative was born in the midst of Facebook's great public rebranding into a privacy company.
Just over a month ago, at Facebook's F8 keynote in May, CEO Mark Zuckerberg declared "the future is private." He spent several minutes waxing poetic about privacy, but it was a lot of rhetoric about "plans" with little to actually show for it.
At one point early in his speech, Zuckerberg laughed before saying, "I know we don't exactly have the strongest reputation with privacy right now." Check out the 20-second clip below to see what I mean.
A lot of people didn't like this moment from Zuckerberg. Facebook was still reeling from endless controveries that happened in 2018 - the Cambridge Analytica scandal, the Myanmar controversy, the list goes on, and on, and on - but choose this moment to address any of its faults at F8. Instead, he tried to make a joke out of it.
Buzzfeed reporter Pranav Dixit summed up the sentiment from F8 pretty well.
Nobody on stage at the Facebook event showed any remorse, looked sorry, or apologized for the company's terrible year. When Zuckerberg admitted that their record on privacy wasn't very good, he was giggling like a naughty school boy like it was *funny*.— Â¯\_(ãƒ„)_/Â¯ (@PranavDixit) April 30, 2019
Keep in mind, this event was a little over a month ago! Now, Facebook thinks the world is ready to trust a global currency it's built.
I support Facebook as a social network, but I have no intention of becoming a user of Libra or a customer of Calibra. I don't think enough time has passed for me to give Facebook the benefit of the doubt with my personal information, not to mention my financial information.
Trust is crucial to me, when it comes to the apps and services I choose to use; I trust Facebook enough to post photos and comments, but not enough to put my actual money there.