Libra Coin: The Good, The Bad and The Unknown | Hacker Noon

Libra Coin: The Good, The Bad and The Unknown | Hacker Noon

The things you won’t pay attention to behind the hype of Facebook Libra coin announcement. It is no more news that Facebook is taking a chunk of its resources and technical know-how to establishing a coin, Libra.

The things you won’t pay attention to behind the hype of Facebook Libra coin announcement.

(Featured Image: https://www.ft.com)

It is no more news that Facebook is taking a chunk of its resources and technical know-how to establishing a coin, Libra. Subsequently, both the crypto and mainstream media are churning out expository and investigative pieces on the topic with many either favoring the development or skeptical about its potential impacts.

Amidst this buzz, my first reaction portrayed enthusiasm as the development had crypto adoption written all over it. However, on second thought, I began to piece together new information spewing from speculative sources, I pondered on the arguments from both sides of the divide, and I came to a realization that “Facebook’s crypto” foray is not all that convincing as a cryptocurrency, particularly on paper.

Here, I will tread the thin line between two opinion leaders that have lent their voices to the subject matter. Firstly though, I will run you through all the available facts on Libra coin.

Positive key takeaways you need to know about Facebook Libra project and its “crypto” initiative

  1. Perhaps, the most interesting speculation surrounding Facebook’s blockchain power play is that it is inevitable that the proliferation of Libra would rub off on the crypto market. With the Facebook ecosystem already boasting a whopping 2.4 billion users, there is no doubt that the global reach of this initiative will set the likes of bitcoin up for blistering adoption.
  2. The same cannot be said of fiat currencies, which experts suggest will experience a drop in valuation. As such, in the next 3 to 10 years, central banks and financial powerhouses have no other choice but to join the blockchain bandwagon, else they phase out.
  3. Libra blockchain initiative will go toe to toe with Ethereum, which is currently the largest blockchain app hub. This notion is even truer considering Facebook’s past successes in open source development. Joe Lubin (Co-Founder of Ethereum) didn’t express a lot of optimism on this matter dubbing Libra as a “…centralized wolf in decentralized sheep’s clothing”.
  4. Another implication is the economic power it avails Facebook. Apparently, Mark Zuckerberg will emerge as the head of one of the biggest financial platforms we have ever seen, and its headquarter is in Switzerland. While some have aired their reservations concerning the tech giant’s growing dominance, others believe that its emergence as a payment processor will correct its apparent liabilities.
  5. It is probable that issues relating to political manipulation, fake accounts, and privacy that had at one time or the other plagued Facebook’s credibility will come to an end since it has to conform with strict Anti Money Laundering (AML) and Know Your Customer (KYC) policies.
  6. Many of the corporations listed as members of the Swiss Foundation (Calibra) that will govern the operations of Libra are mostly established tech companies. For a project tagged the biggest payment solution by a mile, it is surprising that there are no traditional financial institutions taking central roles. This revelation establishes a burgeoning fact that the tech industry has begun to claim a controlling stake in the global financial market.

Credit: https://www.nytimes.com

_N.B. More information to read in the actual _White Paper

Regardless of all the details surrounding the introduction of this ambitious project, one thing is clear — over 2 billion people would have seamless access to Libra. Therefore, regulations, use case, its influence on the crypto market, as well as the financial industry, has come under unprecedented scrutiny.

Caitlin Long, a blockchain enthusiast and a contributor to Forbes, discussed extensively on the role of Facebook’s payment network on the crypto community. Sh took an optimistic stance on this topic while praising GlobalCoin as the perfect launching pad for Bitcoin’s global adoption. In her words, “Facebook’s foray into cryptocurrency will likely end up being a beneficial detour on the path to broader bitcoin adoption. Bring it on!”

Long went further to argue that Libra would become vital to developing countries with financially unstable economies. Also, being that it is a corporate powerhouse, regulatory grey areas surrounding data, privacy, and financial issues could come under the spotlight. Thirdly, Facebook’s proposed governance structure would attract big names that would, in turn, spark issues relating to corporate welfare in the US (more on this later).

On the issue of corporate welfare, Long believes that the Feds standard procedure of paying its banking partners 2.35% of the interest income they generate would spur Facebook, who will partner with one of these banks, to share the spoil among its users. What Long seems to be missing is the fact that Facebook and the horde of companies that would scamper to pay $10 million to become nodes of the network are for-profit organizations.

Remember that one of the conditions for running a legal business in the US is full compliance with FinCEN’s Bank Secrecy Act (BSA). For governments, Libra Coin is the perfect instrument to trace tax evading individuals, money laundering schemes, and terrorism-related funds, so why place an embargo on its introduction.

Credit: https://twitter.com/WhalePanda/status/1140919326960230400

cryptocurrency blockchain facebook libra-coin facebook-cryptocurrency crypto cryptocurrency-top-story facebook-crypto-vs-banks

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