Libra is announced to be a new cryptocurrency of Facebook. Facebook is enhancing its area into the crypto market and digital money is becoming a new trend in recent time. Government is still unbiased, and the executive of a social media company are confused and shocked to see which number of politicians on either side of the aisle reacts to Libra in different ways.
Here the give and take works regulation works, if Facebook realizes the concerns of politicians, they don’t have any problem to it, but for others, it is a big question and problem to be concerned that how social media monopolies are affecting common people lives. And it seems that latter concern is right as Facebook feet into banking will neither going to be good for banks nor privacy, neither markets and nor America.
Let us talk about Cryptocurrencies such as Bitcoin, how they become famous? How they bring value to the monetary system? How are they essential? Well, Cryptocurrencies such as Bitcoin have become famous due to some specific reasons. U.S. Dollars works fine for financial transactions and with credit cards and electronic methods makes it easy to transfer. Well, when it comes to Cryptocurrencies such as Bitcoin and others, they provide us with two main advantages:
- Bitcoin value is not given by any government or bank.
- Bitcoin transfers aren’t monitored by those institutions.
Libra fails at both these points. The creators of Libra avoid the highs and lows of Bitcoin by linking it to the currencies that are real. It adds financial stability but destroys autonomy that is the part of the appeal of cryptocurrency. If we try to link the value of Libra to existing currencies, it means that it is partially controlled by these currencies. It’s not an independent value; it’s more of a fiat money basket – a hedge, not an alternative. Add to this the idea that the MasterCard and Visa credit card duo controls part of the venture, and it looks less like a new form of money and more like a traditional financial instrument.
Even more prominently, Libra lacks the anonymity of Bitcoin. This is deliberate, they suspect, and can even be one of the selling points for Facebook to Congress. Ultimately, Congress likes to control things and knowing what people are doing with their money is one of their main interests. To know the business of people is also the work of Facebook. Facebook does its job to find out who you are, what you like and what you spend your money on. It uses this information to make things happen. Here’s how free software works: You are not the customer but the product.
Facebook was historically terrible to keep it the secret of all the personal information. Its violations of data confidentiality are recurrent and solemn. Yet secrecy is a huge component of the attraction of cryptocurrency. Right there in the name: “Crypto” comes from the ancient Greek word “kruptós”, meaning “secret” or “hidden”. However, there is no hide from Facebook and knows all your secrets. Not only that, it tells everybody smart enough to hack its system.
With much interruptions of Silicon Valley, it is an old idea with a sleek new package. If cryptocurrency is digital gold, Libra is an old-fashioned corporate script once issued by factory-swapping cities. Mark Zuckerberg and a company have understood what coal and lumber companies have ever known, and governments are still doing: It is beneficial for them to print themselves to pay money to people. (Amazon already knew this when they started paying productivity bonuses to Swag Bucks workers, not dollars.) Libra is not a cryptocurrency. This is just a repackaging of Fiat Money with a Facebook logo.
Even if the scales are ineffective as the cryptocurrency, this may not be the reason for the congress to be perfected. The landscape of cryptocurrencies is already beleaguered with the wrecks of upright attempts to imitate Bitcoin. People will invest in them at the risk of themselves. But these endeavours are beside the point because they are independent endeavours. The Facebook currency exploded on stage with the support of a massive giant in social media and the two largest credit card providers in the world. (PayPal is also convoluted in the undertaking.) The scales are behind, which ensures that it will not collapse with the first bad trimester report.
These all aren’t bad news. Firm support should mean inordinate constancy and reliability. Facebook already uses its algorithms to drive users in this way and what is noticeably influencing their online behaviour. To promote its own currency, it will do so and more. Some prods would be more understandable. A business to make advertisement on Facebook can get a discount if they use Libra. It sounds not hurtful, but it’s just a different way to say that Facebook will charge you extra to use US dollars. So it is easy to see how Libra can enter different corners of the economy.
Think about how many companies have Facebook presence. Almost every company of a decent size has a page on Facebook, and many small businesses make a big part of their business through the portal created by Facebook. Since 2016, Marketplace on Facebook has allowed ordinary people to buy and sell stuff even if they are not full-time businessmen. To endorse Libra in these areas at the expense of dollars or other currencies will quickly establish new currencies in a vital trading area. Facebook has much control over what we do online, but Libra would give the social media giant much control over money itself. This system can add more efficiency, but it would also add a higher concentration of power in incomprehensible hands.
Facebook is not the first company to join banking to corporate. Walmart has announced its application to operate a Utah-based ILC (Industrial Loan Company). It will not be a complete bank of consumers, but observers who perceive that the company would provide a position in the financial sector and it would result into a huge benefit. Well, the Bush administration and advocates of consumers pushed backed on this idea and so Walmart withdrew its application in 2007.
Even in those predicate days, people realized that too much concentration of financial strength could undermine the market. In the days following the credit crisis of 2008, many on both sides of the political spectrum began to pay more attention to the dangers of monopolistic financial behaviour. Add to this the real concern about the strong social media monopolies they are already practising, and it is clear that Libra poses a far greater danger to the economy than banking undertaking of Walmart.
“Libra” is an ironic choice for Facebook. This is the Latin word of “scales” and it suggests a balance, like the scales of justice, do. But this artificial cryptocurrency will make the American economy unbalanced and the relationship of Silicon Valley and customers. Companies like social media are already performing control over the marketplace of the ideas. But when it comes to currency, Congress should not let them perform dominance over there.