Libra – Zuckerberg's dangerous cryptocurrency lie

Facebook is going to launch its own cryptocurrency
with the potential of turning the social network into the largest payment service in the world. Zuckerberg promises strong privacy protections
and claims the new digital currency will be independent of the Facebook company. The new coin called Libra is planned to launch
in early 2020, and to market it, Facebook is capitalizing on the growing popularity
of blockchain cryptocurrencies. But when we compare how traditional cryptocurrencies
actually function with what Facebook proposes with Libra, the differences cast a light on
Facebook’s intention to become a global hegemon of the financial world. There is no universally accepted definition
of cryptocurrency. But the majority of them share several key
attributes that attracted many people to start using them. Traditionally, cryptocurrencies operate on
blockchains. Blockchain is a public ledger of transactions
that are chronologically organized in time-specific blocks. For example, in Bitcoin network, a new block
of transactions is created every 10 minutes. Usually these blocks are created by a process
called mining – solving computationally difficult problems and validating transactions
broadcasted by its users. Miners get rewarded with cryptocurrency for
contributing their computing power to the network. Most cryptocurrencies are traditionally completely
decentralized and free from any authority. Every user can create their wallet or as many
wallets as they like and store cryptocurrency that they can transact without any restrictions. There are no banks or governments that can
dictate how someone can and can’t use their digital money. This makes cryptocurrencies very attractive
to free speech advocates as they are extremely censorship resistant. Libra is going to have a central authority. Libra Association. The Libra Association is formed by a small
group of Founding Members. Currently there are 28 members and the Association
hopes to have 100 of them by the initial launch date. The criteria to become a member are rather
exclusive. Your business needs to have a market value
greater than $1 billion, reach at least 20 million people a year, and be ranked among
the top 100 industry leaders by lists like the Fortune 500. Charities and academic institutions are also
welcome to join the Association, but they also have to be from the worlds top 100. Among the members currently are payment gatekeepers
like Paypal, Visa or Mastercard, tech billionaires from Facebook, Spotify and Uber, cryptocurrency
services like Coinbase and Xapo or a venture capitalist Union Square Ventures. All members have equal vote, but for now,
Facebook claims leadership in the development of the platform. Most blockchains are permissionless. That means anybody can use them and run its
own full copy of the network without needing to ask for permission from anybody. Everybody can observe the whole blockchain
from the beginning to the present time. It is maintained by people constantly connecting
and updating their copies of the blockchain to the network. There are no central servers as the whole
blockchain runs as an interconnection of its copies, also called nodes, directly beaming
transaction records into the Internet. This decentralized structure makes blockchains
extremely resistant to attacks. Not all blockchains are permissionless though. Libra will start as a permissioned blockchain. Only the members of the Libra Association
will be privileged to run nodes and validate Libra transactions. No one will be allowed to mint or burn Libra
without the permission of the Association. Although Facebook promises Libra will eventually
become a permissionless blockchain, there is no indication as to when this is going
to happen specifically and how they are planning to go about it. It is worth noting that no permissioned blockchain
has ever succeeded in transitioning into a permissionless blockchain. The vast majority of blockchains are transparent. That means with the exception of a few obfuscated
blockchains, using a cryptocurrenciy requires broadcasting your entire transaction history
to the ledger. In fact, they are so transparent that some
people maintain so called “rich lists”, rankings of addresses holding the most amount
of coins. This is a huge privacy and fungibility issue. Every coin on the network can be traced back
to its very origin of creation and all future spending can also be recorded. This not only gives observers power to collect
transaction records of everyone on the blockchain, it also enables them to freeze certain addresses
or block use of particular coins to prevent them from being moved across exchanges. Libra blockchain is also going to be transparent. But the pool of validator nodes is only open
for the members of the Libra Association. This will allow a group of 100 unaccountable
organizations to observe and track all transactions on the network, with full decision authority
to freeze or blacklist certain addresses or transactions. Whatever happens on the network will not be
open for public scrutiny but will develop strictly behind closed door of billionaire-class
members of the Libra Association. However, making blockchains transparent is
not a requirement. Privacy focused cryptocurrency Monero already
obfuscates its blockchain by default and automatically conceals transaction amounts and address balances. The level of privacy by design of a blockchain
is a thus purely a choice of its developers. So if Facebook wanted to, they would make
Libra blockchain more private. But for most people, using Libra will be synchronous
with using a range of Facebook apps, like the Messenger, WhatsApp or Instagram. This deep integration will make it easy for
Facebook to identify and continuously track financial behavior of the vast majority if
not all Libra users. What gives cryptocurrencies their value is
the hard-coded cap on how many coins there can be in circulation. Demand for a scarce currency drives its value
up and down, which reflects on the volatility of most digital currencies. Some cryptocurrencies claim to be so called
stablecoins because they are backed by a fiat currency, like the US dollar, or other tangible
materials like gold. Most coins are not stablecoins because holding
up a reserve requires putting aside billions in cash that cannot be moved and maintaining
such a reserve usually predicates a central authority. Currently, no decentralized concept for holding
a distributed reserve exists and thus stablecoins are usually in direct contradiction to the
traditional concept of decentralized blockchains. Most among the cryptocurrency crowd believe
that volatility of digital money is only a temporary effect of early adoption and that
it would disappear once full adoption takes place. Libra claims to be one of those stablecoins. But it is not pegged to any particular fiat
currency. Rather, what’s propping Libra is a reserve
of low-volatility assets comprised of government securities, treasury bonds, bank deposits,
and a basket of foreign currencies, including US dollar, euro and Japanese yen. The purpose of the Libra Reserve is to hold
its value. For every Libra created, there must be an
equivalent amount of assets held in the reserve. And for each coin burnt, assets must be taken
away. Libra Association aims to form this reserve
by deposits from private investors and founding members. Just like with other banks, this reserve will
be used for further investments to earn interest. What’s more troubling is that it will remain
up to the Association to decide on the composition of the Reserve basket, where to invest the
reserve money and what risks they are willing to accept. This essentially makes Libra function like
any high street bank. Even users can deposit into the reserve by
buying Libra. But while in a traditional bank, customers
can earn interest from their deposits, the interest earned from deposits in the Libra
Reserve will only go to reward the Founding Members and for development of the platform. Where Libra Association decides to make investments
with its Reserve is going to play a major political role. Purchasing strategic government bonds or debts
can buy a lot of two way influence from the Association into the said government and vise
versa. Libra will thus become the ultimate example
of revolving door into the financial assets of hundreds of millions of people. Development of the majority of cryptocurrencies
is open source and relies on a consensus. Preferably, the computing power of the network
is distributed among so many users that no single party or a group can have too much
leverage. Preferably, all software from wallets up to
the blockchain core is open source, which gives users trust that no malicious intent
is embedded in the source code. Libra blockchain is also going to be open
source. But the development and decision-making power
is going to be withheld by the Association. There will be no other entity on the platform
to check or balance the the Association’s position. Libra Association will occupy a range of crucial
responsibilities. Collectively it will decide on the future
and the development of the blockchain protocol allowing the Association to change the rules
of the network just like Facebook changes its newsfeed or censorship algorithms. Its members will act as the only validator
nodes. They will have the power to decide who gets
to join the Association and even who gets to use the network. Payment providers Visa, Mastercard, Paypal
and Stripe will be able to prevent people from transferring their funds to Libra or
cash out their Libra coins into fiat. It is expected the same Terms of Service on
Facebook, especially the points regarding speech and conduct of its users, will apply
to the use of Libra. With traditional blockchains, only exchanges
usually enjoy the power to freeze particular addresses and users have a plethora of other
alternatives to purchase digital coins with cash, such as crypto-ATMs or peer-to-peer
exchanges. Facebook, however, will act as a blockchain,
a payment processor, a wallet holding users funds, and a social network where people conduct
their finances all in one organization. So this is how Facebook, the world’s largest
social network, is on track to potentially become the world’s largest financial network. Does Facebook really need to do this to earn
more profits? Well, they are running out of options. Cryptocurrency is a $300 billion market right
now and is becoming more and more mainstream among the financial, technological and retail
industries. But as cryptocurrencies are becoming inevitable,
governments, banks and corporations are losing control over the financial system. Just as the Internet gave us free flow of
information, blockchain is giving us free flow of finances. Monetary decentralization poses an existential
threat to collecting taxes and investment of deposited money. And with the growing awareness of the importance
of Internet privacy, advertisement-based business model is also in jeopardy. Offering a free service in exchange for personal
data is no longer enough. Some social media platforms like Nimses, Minds
or Taringa! Began rewarding their users with cryptocurrencies. During Congressional hearings, Zuckerberg
promised users would have an option to get a paid version of Facebook with less data
collection and better privacy. Instead, Facebook is now going to pay users
with Libra coins for watching ads or engaging on the platform. When Libra reaches its full adoption, that
is up to 3 billion combined users of the global Facebook empire, it will become dangerously
detrimental to the financial system. If it succeeds, governments across the world might consider the Facebook-Libra empire “too big to fail”. During times of financial meltdowns this could
mean trillions of dollars of tax payer’s money handed out in a form government bailout
such was the one during the 2008 financial crisis to the Wall Street banks. Blockchain-based digital currencies offered
an escape from the ever tightening grip of centralized control imposed by big banks and
governments. They promise financial freedom and resistance
to surveillance and censorship that limit how we can spend our money and who we choose
to support. Facebook’s Libra embodies everything original
cryptocurrencies were created to fight against. What we need is to have truly independent
and decentralized networks that give us more freedom and privacy, not less. If you too seek this freedom, stick with Bitcoin
for its value and Monero for its privacy. I am opening a Monero wallet where you can
donate if you want to support my channel so that I can produce more content like this. With Monero, you can donate completely anonymously
and privately, as its blockchain leaves no trace of your transactions. YouTube is cracking down on independent content
creators and favors large corporate media organizations instead. But with your support we keep fighting in
this information warfare. Thank you for your support and thank you for

22 thoughts on “Libra – Zuckerberg's dangerous cryptocurrency lie”

  1. It is a dangerous takeover of the globalist technocrat we dream of no less than a transhumanist society controlled by the elite at the top. I say no way! Let’s not support this and share our concerns around us. It is now primordial to do so.

  2. With libra, you can say good bye for all porn and hentai on the earth.
    Because their term of the service will be the law. They will sanitize the mankind.

  3. This is very interesting..Zuckerburg is a Taurus.aka..Banker..Libra stands for balance the scales..

  4. if the criteria to becoming a founding member of the libre association is you need to be in the top 100 of the Fortune 500 companies then isn't it technically limited do exactly 100 people?

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