Facebook's Cryptocurrency - Freedom or Slavery?

4 min reading

According to the social media giant, the world needs a reliable digital currency. Will Libra coin meet these expectations? Can Facebook's cryptocurrency become 'Internet money' and, moreover, will its creation be a step to freedom or slavery?

Libra Coin

Facebook's currency is supposed to consist of three parts which will be harmonized, and as a result, a very integrated financial system will be created. As the creators of the white paper assure, the Libra coin will be built on a safe and scaled blockchain. Facebook's cryptocurrency supports the reserve of assets designed to give it internal value. It is regulated by the Libra Association. The project assumes that in the first half of 2020 more than 100 members of the Libra Association will enter the market. It has been underlined that Libra coin has to be acceptable in many places and easily accessible to all people who want to use it. They need to be sure that they will be able to use Facebook's cryptocurrency as a means of payment. The value of Libra coin must remain relatively stable over time. Unlike other coins, Facebook's currency is to be fully secured by a reserve of real assets. In order to increase trust in its internal value, bank and credit deposits for every single coin will be stored in the Libra Reserve. According to information presented in public, the Libra coin will be supervised by an independent, non-profit organization based in Switzerland, which consists of companies such as MasterCard, Visa, PayPal, Stripe, eBay, Coinbase, Uber and Andreessen Horowitz. Its alleged objective is to coordinate and conduct subsidies for social impact and to support financial integration.

Libra coin - course, exchange and forecast

Facebook's project assumes that its coin will be a stable coin, fully supported by a reserve of real assets (Libra reserve) and a competitive network of exchanges buying and selling Libra tokens. What does it actually mean? Well, every person owning Facebook's currency can be sure that it can be exchanged for local fiduciary currency according to exchange rates. So, every user will be able to exchange the coin. Facebook's currency stands out from other virtual coins - it will be supported by a set of low volatility assets, such as bank deposits or short-term government securities in the currencies of reputable central banks. That way, unlike other cryptocurrencies, the price of Libra coin is to be stable. Moreover, it is supposed to take over important features of other coins, including the possibility of fast cash dispatch, the freedom to transfer funds abroad and security. Libra coin's motto is 'fast, secure and cheap'.

So, is it freedom or slavery?

Along with the appearance of Libra's white paper, many discussions about this cryptocurrency began. Some say that Facebook's currency will support the mass adoption of other coins. One could hear an opinion that global, open, immediate and cheap cash flow will increase both economic opportunities and trade around the world. It is hoped that people will increase their trust in a decentralized form of management. But, among these positive reviews, you can also find unfavourable comments. Many people claim that with the help of Libra coin Facebook wants to monopolize the market. Not so long ago, American politicians expressed their opposition to the project - they demanded that Facebook should stop working on the Libra project. It was also emphasized that Facebook has repeatedly shown disregard for the privacy of its customers. The concern here is that through Libra coin the social media giant will acquire a broad database related to consumer preferences. Hence, users of Facebook's currency will not really be able to feel completely safe. On June 21 this year the Indian newspaper reported that the Indian government could block Libra coin in the country. It would be bad news for Mark Zuckerberg, as the Indian market was alleged quite a valuable goal considering the volume of revenues. It is worth noting that the Calibra cryptocurrency wallet will not be available in the countries in which Facebook, or cryptocurrencies in general, are banned. One of these countries is China which has no access to Facebook. As a result, the Libra coin might never be able to become available worldwide. Of course, Facebook employees are looking for solutions for that problem, for example, they plan to work with WhatsApp. The ambitions of the social giant go further than putting a billion people into the global payment system. In the part describing the consortium included in Libra coin's white paper, we can read that "An additional goal of the association is to develop and promote an open standard of identity. We believe that a decentralized and portable digital identity is a prerequisite ...". For some observers, this fragment has become the most interesting in the whole work. In addition, this week Facebook's spokesperson said that the company has nothing more to add on this issue, and yet the abundant amount of personal data that customers will have to share may expose them to theft, spying and other dangerous actions.