Wednesday, June 29, 2022
68.1 F
Oxnard
More

    Latest Posts

    United States Socialist Republic book by HG Goerner

    Facebook’s Libra Isn’t a “Cryptocurrency”

    Sponsored - Job Posting

    We are a small but mighty business in Ventura, CA specializing in Civil/Agricultural Engineering and Land Surveying. Going strong for over 35 years. Looking for motivated team players for immediate hire. Candidates must have at least 3 years of experience in Civil Engineering, Land Surveying, and AutoCAD Civil 3D. Must want to grow with the company. For the right person, management potential. Wages will depend on experience. Benefits include paid holidays, matching retirement plan & much more. Send resumes to: [email protected]

    YCE, Inc. is an Equal Opportunity Employer. Tel: 805-650-6995www.YCEinc.com

     

    By Thomas L. Knapp

    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.


    Thomas Knapp -- Photo Credit Avens O'Brien

    Photo by Avens O’Brien

    Thomas L. Knapp (Twitter: @thomaslknapp) 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.


    Get Citizensjournal.us Headlines free  SUBSCRIPTION. Keep us publishing – DONATE


     

    - Advertisement -

    1 COMMENT

    0 0 votes
    Article Rating
    Subscribe
    Notify of
    guest
    1 Comment
    Newest
    Oldest Most Voted
    Inline Feedbacks
    View all comments
    trackback
    Facebook’s Libra Isn’t a “Cryptocurrency” | The William Lloyd Garrison Center for Libertarian Advocacy Journalism
    2 years ago

    […] “Facebook’s Libra Isn’t a ‘Cryptocurrency,'” by Thomas L. Knapp, Ventura County, California Citizens Journal, 07/02/19 […]

    Latest Posts

    advertisement

    Don't Miss

    Subscribe

    To receive the news in your inbox