If you’ve been under a rock, you might not be aware that Facebook, with several other partners (who include among them, Uber, Lyft, PayPal, Visa, but no banks interestingly enough) have recently announced their own cryptocurrency, Libra. It’s not Bitcoin, its something completely different, in my opinion, the first real attempt at a mass-market cryptocurrency.
Now some of us techies deep in the world of technology yawn and say ho-hum, yet another crypto and a cursory review of the whitepapers say as much. It only differs from other cryptos in that it uses a variant of a distributed ledger (most cryptos do) and that it pegs its value to a basket of currency instead of a single currency (which is what “stablecoins” which pegs itself to a single currency, to keep it stable).
If all of this is a little over your head, that’s fine, since the whole point of Libra is to create the first mass-market cryptocurrency that anyone can understand. That’s right folks, the Libra Association (of which Facebook is a partner) is minting its own money, just like a government would. It’s a completely independent currency mathematically invented out of thin air and valued the same as a basket of currencies decided upon by the Libra Association. This is brand new stuff for the mass market.
Prior to Libra, cryptocurrency was a curiosity, the domain of a relatively small number of enthusiasts who were either using crypto for nefarious purposes (such as buying stuff on the dark web), as a pure investment (I bought a Bitcoin when it was $300 for fun) or are very much into privacy and hiding their actions. The world of cryptocurrency was weird and sketchy, and your regular Jane wouldn’t be able to figure it out without doing a lot of reading and thinking. Plus there is a lot of confusion and plenty of bad actors out there in that space.
The last company which moved cryptocurrency closer to the mainstream was Coinbase. When they launched, it tried to make cryptocurrency accessible so that it would be easy for “normies” to buy. All you needed was to provide some ID and slap down your debit card and boom, you were a proud owner of Bitcoin or Ethereum or whatever.
But still, the promise of cryptocurrency didn’t really blossom – it was still some weird, sketchy investment – not a real currency (as in something that you would use like regular money aka fiat currency – you don’t see yourself buying coffee in Bitcoin – although there was a coffee shop in Palo Alto which let you buy coffee in Bitcoin) – especially when Bitcoin made the news by fluctuating up to $20k plus. They even made an episode of the Big Bang Theory where Leonard had stored his Bitcoin on an old computer and in the process of retrieving it, lost it. But I digress. What is so amazing about Libra?
Not that its another crypto. It’s three factors:
It’s designed for the mass market. Facebook will use its market power to make Libra available everywhere (one of the reasons that regulators are freaked out)
Its the first crypto that has a slim chance to become a real currency that we will all use to buy groceries, get paid in and pay the dogwalker with (since the plan is to keep it relatively stable and ubiquitous) and
It pushes the envelope on cryptocurrency.
It’s true innovation. Like the Segway, which pushed the boundaries of personal transportation and Google Glass, which pushed the boundaries of wearable devices, Libra is pushing the boundaries of cryptocurrency. The fact that there is all of this hue and cry and demands from the governments around the world to stop, restrain or outright ban it (even before it’s yet launched) is the mark of real innovation.
I applaud Facebook for taking this bold step and the first slings and arrows which are typically thrown at an early mover into a disruptive space. Libra may not be the end-all-be-all cryptocurrency that they are expecting it to be, but you can say this much about it for sure – it has advanced the conversation about cryptocurrency around the world.
When you get pushback, it is usually the first sign that you are truly innovative. The more pushback you get, the more creative you are being. By that scale, Facebook is finally, genuinely innovating.
