It seems like Libra is rubbing everybody the wrong way as of late.
Libra Is Attracting the Wrong Kind of Attention
All last week, the cryptocurrency made headlines when David Marcus – the man heading Facebook’s blockchain division – was questioned repeatedly by members of Congress over the cryptocurrency’s properties, ideals and general goals. It appears many members of the U.S. government do not trust Facebook to do the right thing and assume that Libra is out to rid the world of its innocence in some way.
While this may be an exaggeration of sorts, one can understand where such paranoia comes from. Following the Cambridge Analytica scandal of last year, it’s hard to see Facebook in a solid light and assume that it’s simply out to do good things for its users.
Apparently, many people see Facebook as an evil conglomerate that’s set on assuming more power than it will ever need. One of those people is economist Thorsten Polleit, who recently wrote a negative article about where Libra could potentially go in the future.
Entitled “Facebook’s Fake Money,” the article exclaims:
Is Libra really good – or sound – money? Unfortunately, this question cannot be answered in the affirmative. The reason is this: the quality of Libra depends on the quality of the underlying fiat currencies, and fiat currencies do not make for good money, as should be well known by now. They are inflationary. They enrich some at the expense of many others. The issuance of fiat currencies causes distortions in the credit markets, which provokes speculative bubbles and triggers booms and busts… They lead economies into over-indebtedness.
What Would Be a Stronger Alternative?
Polleit goes on to say that Libra’s inclusion on a “private blockchain” will not change anything, and it still runs many risks for both its users and the financial space. He writes:
Libra is just the upshot of an entrepreneurial attempt to profit from the global market for payment services (and later perhaps also from the credit markets), and, of course, to collect as much precious transaction data as possible… If Facebook and others wanted to offer the world a better, actual good money, the choice is obvious. It would be a 100 percent gold-backed Libra, but who knows. Maybe this will be the next step initiated by Facebook, Amazon or any other company because there sure is a vast market for sound money out there.
It appears the congressional hearing of David Marcus might have done the currency in. Originally set for a 2020 debut, Libra is now going to be delayed by at least two years, while other economists, such as Janice Winterburn, suggest that the coin may never come to fruition at all. To think… All that money spent, and all the time wasted on something that will never even be built, and for all we know, that’s the best outcome of all.
Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries.
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