Facebook’s Libra: The Good, Bad, and Ugly

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If you are not aware or have not followed this new relatively new development, Facebook has established a new subsidiary Calibra which will greatly increase the awareness of cryptocurrency 2.3 billion monthly active users sometime next year. Well, at least that’s what they want the general public to believe, and it can work just because of the huge size of the company.

This article is about the good, the bad and the ugly. This is not meant to be one break up on Libra, but previously used to bring forward unbiased information about what could be the most popular subject in cryptocurrency since Bitcoin reached the highest point.

Since it was announced, Libra has caused controversy among the online Cryptocurrency communities. On the one hand because Facebook has more than 1.5 billion users who log in to Facebook every day, this project is arguably the largest exposure cryptocurrency has ever got. On the other hand, there are some important problems with regard to decentralization, or rather, centralization.

The good…

Facebook, more specifically, Calibra will develop a simple solution for the banks. For many people in developing countries, even basic financial services are not available. This is the most important thing that Calibra wants to do: give everyone with an internet connection the opportunity to do that Save, send and publish scales. The transactions are said to have “little to no cost” and can be sent easily, just like a text message. With the first release, the wallet is accessible via three different apps: Messenger, WhatsApp and an independent app.

Moreover, you do not have to worry about your personal data being shared between Calibra and Facebook. In a statement of their original announcement, Facebook states that, apart from rare circumstances, your information will NOT be used for advertising targeting on Facebook products.

Apart from limited cases, Calibra will not share any account information or financial data with Facebook or a third party without the customer’s consent.

The limited cases are where your information would be used to keep people safe, to comply with law enforcement and to provide basic functionality to people who use the products.

The bad…

People are not happy with the project. Not at all. It seems that the general consensus is that Libra is trying to take a large share in the cryptocurrency space with their huge user base. For example, in a small survey that was conducted, more than 85% of people who responded were not at all interested in the new cryptocurrency.

Libra survey results

Courtesy of CivicScience

From this survey, interested people appear to be younger, especially around 18-24. In my opinion, people of that age tend to have & # 39; shiny Object Syndrome & # 39; and they would be interested simply because Facebook is behind it and their ads are on the spot.

To make matters worse, another study measured how many people trust Facebook. An amazing 77% of the 1500+ survey responses said they did not trust Facebook at all.

Facebook trust issues

How should people trust them with their money, if they can’t even trust Facebook, one of the largest companies in the world? Of course, Facebook came out and said that customer information will not be shared, but Facebook owns Calibra, so probably the same principles will apply.

The ugly …

Libra is centralized. Simply. For some people that is a huge problem. Cryptocurrencies are naturally considered decentralized. That is actually the whole point of a cryptocurrency, nobody checks it, but the people who use it. The founders of the company will be able to manage the blockchain and be the most important governing body. They will be able to do things such as process transactions, including the ability to reverse transactions, since they (including investors who have spent more than $ 10 million) own all nodes, which is only around 100.

Another major problem with centralization is that the people who run the network can choose who uses it. Calibra can limit whoever he wants to use Libra for any reason at any time. Do you still have money? They can and will hold funds in such circumstances, as Paypal does when they restrict your account.

Finally I am not sure if this is under the ugly subtitles, but don’t place it here. For those of you who want to make huge profits with Libra, think again! The main goal Libra wants to achieve is to become more useful than any other national currency accepted almost everywhere with little to no complications. This cannot be done with a volatile coin. To achieve this, Libra will be one stablecoin. Now it will be a bit different then how USDT or USDC works.

Libra is linked to a group of “assets with low volatility, including bank deposits & government securities” in multiple currencies & # 39; s.

So while it can and will still fluctuate in value, you probably won’t see it make 100% + profit … ever.

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