Cryptocurrency Leaders Unimpressed with Facebook’s Libra

After over a decade of peaceful co-existence, the two most significant technology innovations to hit the market this century are finally joining forces. The merging of cryptocurrency and social media has been a long time coming. It may well be worth the wait, as it is powered by Facebook, the largest social media entity in existence.

Facebook, famously founded in 2004 by a college-age Mark Zuckerberg and his Harvard roommates, is launching a cryptocurrency token. It is to be called Libra.

Despite the age advantage of only five years, social media, driven by Facebook, has reached countless more people than cryptocurrency. While both enjoyed a rapid rise to fame, cryptocurrency’s user base cannot hold a candle to Facebook.

Precursors to the news

For over a year now, rumors of a Facebook venture into cryptocurrency have been swirling around. These rumors were confirmed with Facebook’s February 2019 acquisition of blockchain startup Chainspace, along with its developer team.

Chainspace is a smart contract platform designed to provide decentralized, scalable, open source code, and building platforms. This type of buyout, known as an “acqui-hire,” is shared amongst the tech world. The exciting part of this particular venture is the fact that Facebook is finally venturing into the blockchain space.

The goal of Libra

There is one obvious, glaring benefit offered by Libra. That is the nearly unlimited audience potential an endeavor like Libra offers when backed by Facebook and its 2.38 billion users.

Since its inception in 2009, cryptocurrency has made sweeping promises to change the world. For the first time in history, a cryptocurrency platform offers that potential. It does so with the power Facebook has to offer.

As generations, raised with technology like the internet, smartphones, and social media trickle into adulthood, the potential of digital currency continues to grow. But it needed a foundation and a strong backing.

In its white paper, Libra promises to financially empower the world, stating, “The mission for Libra is a simple global currency and financial infrastructure that empowers billions of people.”

The blockchain community isn’t impressed

First of all, Libra is a stablecoin. It is not trustless. It is being built on a permissioned blockchain, without the typical freedom and transparency of a blockchain. Its investment token will only be available to a select few corporate partners. More on how Libra differs from Bitcoin can be read here.

Facebook has promised to fix this over time. The company has verbally alluded to a five-year plan to move to a permissionless platform.

Existing cryptocurrency exchanges have already spoken out against the Libra coin, stating it will not be traded on their platform. Citing arguments that revolve around the issues stated above, the concerns of many blockchain entrepreneurs are not without merit.

According to Edward Mandel, CEO of the cryptocurrency exchange BQT, the token is unlikely to be traded on the BQT platform: Mandel shared this news in a Medium opinion piece, one in which he provided many thoughts on the timing and drive behind the Libra token. In addition to a cryptocurrency exchange, BQT is developing a comprehensive cryptocurrency university, offering courses for individuals and teams looking to expand their knowledge of digital currency and blockchain technology.

However, by the time Libra is released and in widespread use, the average Facebook user may not need or care to have anything beyond a stablecoin. The truth is, most people do not understand the inherent value of traditional cryptocurrency model, its potential worldwide benefits.

Others are eagerly anticipating Facebook’s release of Libra. In fact, top crypto exchange Coinbase co-signed the Libra white paper, along with Visa, Mastercard, Lyft, Spotify, and Ebay.

While no major banks signed on at launch, and Wall Street displayed a marked disinterest due to privacy concerns related to data usage, the potential of Libra is nearly unparalleled.

Beyond the clout of Facebook, Libra is backed by five venture capital funds, as well as seven retailers, including those listed above. Facebook has failed in the past. The vast majority of these failures have revolved around privacy breaches and blatant disregard for its once-trusting users. Cryptocurrency projects have failed in droves.

Yet, the combination of these two may be the golden ticket, not just for cryptocurrency, but for social media users who desperately need exactly what the Libra platform is promising: a transformed global currency and financial infrastructure.