FacebookTwitterRedditEmail

Facebook’s Libra Isn’t a “Cryptocurrency”

In mid-June, Facebook — in cahoots with 28 partners in the financial and tech sectors — announced plans to introduce Libra, a blockchain-based virtual currency.

The world’s governments and central banks reacted quickly with calls for investigation and regulation. Their concerns are quite understandable, but unfortunately already addressed in Libra’s planned structure.

The problem for governments and central banks:

A new currency with no built-in respect for political borders, and with a preexisting global user base of 2.4 billion Facebook users in nearly every country on Earth, could seriously disrupt the control those institutions exercise over our finances and our lives.

The accommodation Facebook is already making to those concerns:

Libra is envisaged as a “stablecoin,” backed by the currencies and debt instruments of those governments and central banks themselves and administered through a “permissioned” blockchain ledger by equally centralized institutions (Facebook itself, Visa, Mastercard, et al.).

To put it a different way, Libra will not be a true cryptocurrency like Bitcoin or Ether. Neither its creation nor its transactions will be decentralized and distributed, let alone easily made anonymous. A “blockchain” is just a particular kind of ledger for keeping track of transactions. It does not, in and of itself, a cryptocurrency make.

In simple terms, Libra is just a new brand for old products: Digital gift cards and pre-paid debit cards.

The only real difference between Libra and existing Visa or Mastercard products is that Libra’s value will fluctuate with the “basket” of currencies and bonds it’s backed by, instead of being denominated in one particular (also fluctuating — you experience the fluctuations as changes in the prices of goods) currency like the dollar or the euro.

When it comes to the goal envisaged by cryptocurrency’s creator, the pseudonymous Satoshi Nakamoto — to free money from control and manipulation by governments and central banks — Libra is a dead end. Instead of being manipulated by one government or central bank, Libra will be manipulated by all of them.

Cryptocurrency is, to get biblical, new wine in old wine skins — it bursts those skins, by design. Libra isn’t new wine. It isn’t even a new wine skin. It’s a blend of the same old wines, in the same old skins, with a fancy new label. And there’s nothing to suggest that the old wine is getting better with age.

Fortunately, these structural defects also mean that Libra isn’t a threat to real cryptocurrency. Accept no substitutes.

More articles by:

Thomas L. Knapp is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

bernie-the-sandernistas-cover-344x550
September 16, 2019
Sam Husseini
Biden Taking Iraq Lies to the Max
Paul Street
Joe Biden’s Answer to Slavery’s Legacy: Phonographs for the Poor
Paul Atwood
Why Mattis is No Hero
Jonathan Cook
Brexit Reveals Jeremy Corbyn to be the True Moderate
Jeff Mackler
Trump, Trade and China
Robert Hunziker
Fukushima’s Radioactive Water Crisis
Evaggelos Vallianatos
The Democrats and the Climate Crisis
Michael Doliner
Hot Stuff on the Afghan Peace Deal Snafu
Nyla Ali Khan
Spectacles of the Demolition of the Babri Masjid in Uttar Pradesh and the Revocation of the Autonomous Status of Kashmir
Stansfield Smith
Celebrating 50 Years of Venceremos Brigade solidarity with the Cuban Revolution
Tim Butterworth
Socialism Made America Great
Nick Licata
Profiles in Courage: the Tories Have It, the Republicans Don’t
Abel Prieto
Cubanness and Cuban Identity: the Importance of Fernando Ortiz
Robert Koehler
Altruists of the World Unite!
Mel Gurtov
Farewell, John Bolton
Weekend Edition
September 13, 2019
Friday - Sunday
Paul Street
The Age of Constitutional Coups
Rob Urie
Bernie Sanders and the Realignment of the American Left
Anthony DiMaggio
Teaching the “War on Terror”: Lessons for Contemporary Politics
Jeffrey St. Clair
Roaming Charges: They Are the Walrus
T.J. Coles
Jeremy Corbyn: Electoral “Chicken” or Political Mastermind?
Joseph Natoli
The Vox Populi
Sasan Fayazmanesh
The Pirates of Gibraltar
John Feffer
Hong Kong and the Future of China
David Rosen
The Likely End to Roe v. Wade?
Ishmael Reed
When You Mess With Creation Myths, the Knives Come Out
Michael Hudson
Break Up the Democratic Party?
Paul Tritschler
What If This is as Good as It Gets?
Jonah Raskin
Uncensored Tony Serra: Consummate Criminal Defense Lawyer
Ryan Gunderson
Here’s to the Last Philosophes, the Frankfurt School
Michael T. Klare
The Pompeo Doctrine: How to Seize the Arctic’s Resources, Now Accessible Due to Climate Change (Just Don’t Mention Those Words!)
Luke O'Neil
I Would Want To Drink Their Blood: God Will Punish Them
Louis Proyect
The Intellectual Development of Karl Marx
Tom Clifford
How China Sees the World
Kelsey Hawkins-Johnson – Negin Owliaei
Who’s Burning the Amazon?
Yasin Khan
Rideshare Drivers are Employees, Not Contractors
Ralph Nader
Big Business Lies Taught a Watchful Donald Trump
Binoy Kampmark
The Sacking of John Bolton
Andrea Maki
Wild Love Preserve Founder: Our Path Forward
Jeremy Kuzmarov
The War in Eastern Ukraine May be Coming to an End But Do Any Americans Care?
Tim Davis – Stan Grier
Protect the Sacred Grizzly Bear, Follow Those Who Know Grandmother Earth
Clark T. Scott
Super-Delegated and Relegated
Jim Britell
Lessons From America’s Greatest Grassroots Campaigns 
Howie Hawkins
Workers Need More Rights and Economic Democracy
Ramzy Baroud
‘Justice is Indivisible’: Screams of Israa Ghrayeb Should Be Our Wake-up Call
Jill Richardson
It’s Not About Your Straws and Your Light Bulbs
FacebookTwitterRedditEmail