Libra Me This, Libra Me That, Who’s Afraid of the Big Black Bat?

You’d have to be living in an underground monastery to have not heard about Facebook’s official foray into cryptocurrency and blockchain, Libra.

It is certainly one of the most trumpeted announcements in the blockchain space in a long time. And one that’s good for the technology because it is bringing the discussion back to the dinner table.

The whitepaper headline says it all though…

Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people.

Sounds reasonable enough as a worthy goal of the Facebook-led syndication of partner entities.

 

 

I’m not sure how this syndicate is going to accomplish this better than say… Bitcoin.

But for the sake of rational debate, I’ll go along with it for now.

Before I get into the long-term, not-so-great things about this adventure, let’s discuss some of the shorter-term, more positive effects I believe Libra may have.

Libra and Emerging Markets aka “Banking the Unbanked”

We have this really nasty habit in our comfortable, suburban paradises in that we consistently assume everything is about us as a nation.

This can certainly be demonstrated by the reaction from US Congress and some other EU folks, who want Facebook to stop so they can have hearings.

In the inner space of my mind, I see Ayn Rand’s face when I close my eyes and imagine Ms. Waters speaking.

There’s not a lot they can do about Libra as a solution being deployed to other emerging nations.

I find it a silly self-aggrandizing overreach of Congress to think they can tell a software company to stop writing code because the possible outcome might be something disagreeable or contrary to our domestic laws.

They are representatives, not dictators. Sit down, STFU.

 

In fact, I believe Libra places the corporate constituency at the front of the line for emerging economies.

Vodafone should be concerned about the future of M-Pesa. There’s a new kid in town whose combined strengths are a Death Star looking for planets to crush.

Shares of Western Union took a hit from the announcement. There are obviously very justifiable concerns, particularly about the impact on the remittance market.

I happen to agree with the idea of economic inclusion and that of financial participation. It happens to be one of our footer stones as well at 10XTS.

Libra as a Payment Rail

As the CEO of 10XTS, I have intentionally stayed completely away from payment systems as any business model for our company.

Payments are one of the most legacy use cases of cryptocurrency, and there are already titans in that marketplace.

Circle, Square, etc… have all made their moves. In fact, Bitpay has been facilitating Bitcoin as a form of payment for years.

As for global merchant access, Coinbase has been launching their Visa-based cryptocurrency debit card system in Europe for quite some time.

Most of the ICO and alt coin projects have been, in some form, a stratified niche payment system. Not great and probably not sustainable within network economics unless you raised a couple hundred million — and in that case, you’re not based in North America.

Facebook’s announcement doesn’t change the current pole positions in the cryptocurrency payment market, but it does telegraph to those legacy players — you better have your shit together because we’re the next wave.

All Facebook has to do is add AMZN and Alibaba to their partner roster, and a massive black hole opens up in the fabric of the e-com galaxy.

That sucking sound. That event horizon.

 

Libra as an On-ramp to Other Digital Assets

Without question, Facebook has the largest user base of any other application. If it launches a consumer-facing platform, most of the world gains instantaneous access and awareness.

Several years ago, I was invited to Chicago to Facebook’s launch of their F-Start startup accelerator program (which never really got traction, but in my opinion that was the result of a lousy launch strategy).

 

 

 

One thing that stuck with me was Facebook’s access to other, 3rd-party mobile application date because… most mobile app developers used OAuth and user’s existing Facebook accounts as a quick means of account creation and on-boarding.

Why re-create the wheel as developers when everyone already has a FB account they can use to create a new one on your app?

The result was Facebook’s staggering access to mobile app launch efficacy and success.

Even back then, the numbers were in — most 3rd party apps failed to gain access and share of phone use.

Facebook’s direct-to-consumer access through Messenger and related platforms becomes an important, powerful means to push end user adoption.

The kind of end user adoption the cryptocurrency market has been unable to create in the 10 years since Bitcoin was launched.

This makes it a phenomenal on and off ramp opportunity for other digital assets.

It won’t be long after introduction that you’ll be able to exchange Libra for BTC and others. There are already blockchains with side-chain pegging strategies to create derivative tokens pegged to 3rd party price feeds. This will undoubtedly expand to include Libra and Libra-based asset parings.

This is good for us at 10XTS because we’re in the business of tokenizing real world assets with digital asset-based accounting systems. We see Libra as another form of ingress and egress of actual money via the money transmitter ecosystem — of which we have zero intent to become.

Who’s Afraid of the Big Black Bat?

While Facebook’s ban on crypto-related advertising while creating their own platform is ironic enough, the amusing part about Libra is rooted in dichotomy between Facebook at the core, and the characteristics of the zodiac symbol Libra itself:

Intelligent, kind, and always willing to put others before themselves, Libras value harmony in all forms. Ruled by Venus, the planet of beauty, Libra adores a life that looks good. As the master of compromise and diplomacy, Libra is adept at seeing all points of view, and excels at crafting compromises and effecting mediation between others. This sign has a rich inner life yet loves other people, and they’re always happiest with a large group of friends, family, and coworkers on whom they can count.

 

I find this quite ironic in the wake of Facebook’s overt censoring of content, including their erroneous semantic detection of verboten keywords.

For example, I have a longtime personal friend who is a professional photographer. Jeff was on Facebook for a decade. Predominately advertised his photography business and livelihood via his Facebook page.

 

Recently, Jeff made a post on his personal wall criticizing a series of unfortunate events around a demonstration held by a white supremacist group in Dayton, Ohio.

The city spent over $600,000 on logistics and security to accommodate a group of less than a dozen racists.

Jeff criticized the group for their publicity stunt to spread their filthy hate. He criticized the city for giving in to their demands.

The Facebook system flagged his post, which was clearly not rationalized. Whether automatic or manual, Jeff ends up with a 3 day account ban.

Upon his return, he is immediately banned for 7 days, then automatically given a lifetime ban.

And so… the Riddles

Did Facebook intend to ban him for life for being rational in his expression?

For expressing anything at all?

How will they be accountable when it comes to economic inclusion and account access?

Now, this cabal of multinational organizations intends to create what is tantamount to its own, virtual, sovereign state powered by digital technology.

What makes them a sovereign state?

Aside from being the digital walled-garden inside of which you are permitted to interact with others under the known, accepted definitions of “community”, it’s their ability to create their own central bank and mint their own private currency.

Now I don’t have a problem with this concept — except these nebulous circumstances created by these unspoken rules about expression.

What is and isn’t allowed? Why can one reviewer accept something and another claim it is against community standards?

How do they find time between the drugs and sex at work?

In fact — there’s zero governance at all except that of a whimsical dictatorship powered by one of these biased algorithms we keep reading about.

The one that de-platformed Jeff and instantly removed his primary means of income for… an innocuous expression.

 

There is no judiciary to petition an unbiased, third party for a ruling on any disputes.

There are no published rules of law.

There’s no representation within the corporate state.

There are no individual rights.

There are company-favoring Terms of Service which nobody takes the time to digest.

There are breaches of individual data. There are intentional conveyances of user information to other entities, governments, complicit parties.

How do I resolve disputes with others when I can’t even resolve disputes with half the corporations on this list?

If history isn’t intentionally scrubbed to eliminate this current inflection point and shift in known social construct — I believe we will look back on these immediate days as the harbinger of the forthcoming dystopia.

The riddles continue to stack a mile high— but fortune consistently favors the bold.

But in consideration of who is being favored and why, I’m not fully convinced we’re prepared for this as humans without some checks and balances.

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