post image

Jun 29, 2020

Libra: Why It’s a Bad Idea

ILCOIN Development team

Everybody knows about Facebook, and everyone has a different opinion regarding them. There is no doubt that lately some negative press has been surrounding their business for a variety of reasons. Whatever you think of them, they are a profit-driven and highly successful company. That is why when we hear talk of them starting their own cryptocurrency, alarms start to go off.

Despite what the blockchain was originally built for, the technology has expanded beyond what we could have ever imagined. Nowadays, it is not unheard of for a blockchain to be used by major profit-making organizations like banks and manufacturers. So why is it that Libra (Facebook’s homemade cryptocurrency) is such a major standout for governments and blockchain users alike?

Control, control, control…

In one word, it is summed up pretty tightly. Facebook is a major stakeholder in the world of communication. Facebook is used by most countries in the world and by millions of people in those countries. For a huge business such as Facebook to want to make their own cryptocurrency, it gets a little concerning. Too much control on the blockchain is called centralization, but too much control in business is called oligarchy. Now, if you mix too much control and begin implementing your own currency, how soon is it before we have businesses running their own international countries? How soon is it before Facebook begins to keep their money all tied up under the guise of their own money? And how soon before Facebook users are going to have to start using this currency to gain access to the famous site? It is a slippery slope that should make everyone nervous.

The economy

If the idea of Facebook having control over our communication systems and having its own currency doesn’t get to you, you should consider the effect it will have on the economy. Remember that even though not everyone uses Facebook, all of us are tied to the economy. If suddenly, huge amounts of cash are being filtered into the Libra economy; that will have a large effect on us all. The influence of this one company over the lives and livelihood of so many is a dangerous thing. If you start printing Zuckerberg dollars instead of George, Jackson and Franklin, it won’t be long before you feel huge consequential effects across the world too.

Amazon too?

Yes, there is no question that Amazon has also put their hat into the blockchain ring. There has actually been a huge movement towards adoption of a blockchain for business purposes. The thing about Amazon is its necessity for transparency. Amazon is already a business that buys and sells products actively, Facebook is not. Facebook gets its revenue from is mostly advertising; both in terms of space as well as through the platform itself. That is a dangerous place to be if you are going to implement your own cryptocurrency because how can that revenue be kept transparent? And what about the Facebook users who spend the coins on the site itself? Facebook already has a bad enough track record with privacy and data sharing. This is just another bad step which further down the line we are going to come to realize was a stupid idea.

Where does it end?

The blockchain is a complex system and when used properly can benefit so many people that would otherwise be nameless users of currency. If Facebook becomes involved in a decentralized, anonymous system, it could change the whole concept of the game for good. Of any business today, Facebook is possibly the most centralized of all. Anyone can simply look you up and browse whatever information you allow to the public. If Facebook were to adopt the decentralized system, many people are going to unwittingly get into something that they probably don’t understand. This could be detrimental to the process we have built up to so far and hold back the technology for years to come. It may sound paranoid and dystopian, but remember that the last time this company made a mess, we all suddenly had to sign a bunch of GDPR papers just to open an account of any kind.

Blockchain for IoT

The blockchain strives as a mainly independent technology still. Some big companies have been built on a blockchain, but the main development of it continues with the understanding that a large part of the system should remain public and decentralized. For example, we can see this duality with Ripple and Stellar or the Hyperledger family. The Internet of Things (IoT) is a huge section of the blockchain system that is currently under exploration and it could be one of the greatest development of the technology as a whole. Facebook is already a large chunk of what the internet is today and has the resource and capital to essentially do as it pleases. If, through their Libra project, they move in on the development of blockchain for IoT, that could spell a return to centralization altogether which would be the worst outcome that could possibly come from all this. We have already seen a corruption of the original idea of what the internet was from back in the nineties. If blockchain technology goes the same way and Facebook is at the wheel, we can just about kiss all this progress goodbye.

Moving forward and embracing new ideas is important, and there should be no restriction on people’s thoughts or innovations. That doesn’t mean that there are no bad ideas, and understanding a company’s past decisions can say a lot about what they will do in future. If we can get any indication from what Facebook has already done, we need to be weary of what they are planning to do in the blockchain industry.

Libra is a bad idea for many reasons, and thank goodness this is an idea that is shared across the board from users to government. All we can hope for is that the steady development of blockchain technology is not suddenly stagnated by some shiftless, big-name company that doesn’t care about privacy, decentralization or the selling of its user’s data for profit.

Contact form

Last tweets