Facebook going into cryptocurrency has definitely created interest among mass consumers and crypto naysayers. People have started to seriously consider the possibility of mass adoption of cryptocurrency, but will Libra be the main catalyst for cryptocurrency to be rolled out en masse?
Mass consumers won’t be able to tolerate how their Libra can be used to purchase lesser today than yesterday. Notably, it will be less volatile in countries with hyperinflation, while people have always used stable foreign currencies as an alternative medium such as the US Dollar.
There will always be the issue of volatility for Libra against all other currencies. Libra is backed by a reserve of real assets rather than a peg, and this means that it won’t be actively traded on Libra’s end to stabilize its value. On the flip side, being a cryptocurrency, it can be put up for trading on cryptocurrency exchanges for speculation all without Facebook’s permission.
Cryptocurrency, But With Extra Steps
You can hold Tether (USDT) and the many other stable coins existent on the Ethereum blockchain on many wallet apps, readily available on multiple platforms. Facebook, during its hearing, stated that it will require its users to comply with KYC / AML requirements. Though it is stated in the Libra whitepaper that the Libra Blockchain is inherently pseudonymous, it is unclear how Libra will pull this off.
Will KYC / AML requirements apply only for its Calibra wallet? Capitalize their open-source nature of Libra Blockchain for third-party developers to build wallet services that skit around the senate’s concerns?
The Libra Association looks like a dystopian oligarchy world government, controlled by transnational corporations, transcending the state. Libra looks like it could replace the US Dollar as a reserve currency that governments hold to back their own currencies.
The Sterling, which was replaced by the Dollar, was once the reserve currency. The United Kingdom was the epicenter of the industrial revolution and Sterling was used to invoice merchants and companies and this drove its demand and economic power. Interestingly, this is also the reason why the Dollar took over.
Facebook is essentially the biggest e-nation with a third of the world as it’s citizens, and now it is backed by Libra Association members as its economic power and demand.
A Big Target Board
Facebook is a huge and public company, and as the largest proponent of social media, this social media giant has to be accountable to a lot of people. Though the very decentralized nature of blockchain will prevent any forms of a shutdown, Facebook will not be able to roll it out without the approval of their stakeholders and the state.
Libra also will be starting off with centralized nodes that are managed by members of the Libra Association. We will likely not see a fully decentralized Libra any time soon due to the threats it poses to centralized entities not being able to fully control it. More importantly, it is extremely unlikely that regulators will allow decentralization to occur.
Rolling out in 2020, Libra could very well be ready on apps such as WhatsApp – apps that are already on your phones. Just like how Facebook forced you to install Facebook Messenger on your phone to check your Facebook messages, it’s possible that we may see Libra roll out in a similar manner but will Libra flop like Facebook Messenger in terms of adoption?
Written by Irwin Chee
Crypto Astrologist blending technical charts with lunar eclipse and celestial retrograde indicators. Occasional dark arts practitioner, decapitating a chicken on a board to predict which coins to buy.