Next year, a client may try to pay you for their cruise or overseas holiday through Facebook, using a yet unknown cryptocurrency named the Libra. Is this a good idea?
It depends on whether you trust the client, trust Facebook, trust cryptocurrencies – or possibly trust none of them.
Facebook’s ambitious plan to bring a new cryptocurrency to the world – and take a slice of global digital transactions – hit the news yesterday, having been hinted at for some time by Facebook co-founder and chief executive Mark Zuckerberg.
The cryptocurrency will be called the Libra. Facebook also announced the creation of the Libra Association, an independent organisation based in Geneva that will manage the currency, and Calibra, a Facebook subsidiary which will build applications related to the new digital currency.
Calibra will build a “wallet” application for people to use Libra, send it to their friends and make purchases on Facebook and Instagram.
There are already several cryptocurrencies around, based on the blockchain system; the best-known being bitcoin, whose wild fluctuations kept people amused a year or two ago. Bitcoin is still around, trading this morning at about 13,298 Australian dollars per bitcoin.
Vox pop street interviews conducted in Britain yesterday indicate that one problem Facebook’s ‘Project Libra’ may face is that a lot of people don’t particularly trust Facebook. Huge mega-corporations that exist to gain endless information about you for their own profit are not universally trusted, even if billions of people use them for communication, to share and ‘like’ pictures of cats, babies and much else.
Some experts see Facebook’s latest venture as an attempt to dominate global communications and business.
Jennifer Grygiel, assistant professor of communications (social media) and magazine, news and digital journalism at New York’s Syracuse University wrote yesterday: “Backed by huge finance and technology companies including Visa, Spotify, eBay, PayPal and Uber – plus a ready-made user base of 2 billion people around the world – Facebook is positioned to pressure countries and central banks to cooperate with its reinvention of the global financial system.”
Tellingly, the title of her article in The Conversation is: With cryptocurrency launch, Facebook sets its path toward becoming an independent nation
People could be buying holidays through the new Facebook currency (see below) within a year from now, if plans go to schedule. You won’t see the coins; it’s all digital.
Concerns over privacy, however, continue to bug people.
As Britain’s Financial Times put it yesterday: “Consumer privacy concerns mean users are already revoking Facebook permissions. If they do not trust Mr Zuckerberg’s company with their phone number why would they trust it with their money?”
Written by Peter Needham
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