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Facebook’s digital wallet: Here is why Facebook Cryptocurrency is facing severe backlash from the critics

libra facebook cryptocurrency

The underlying problem with conventional currency is all the trust that’s required to make it work. Satoshi Nakamoto writes, “The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.”

Breach of trust is something that we associate with cryptocurrency – the alarming rise in prices, the fatal technology, and the mining gold cash is a direct refusal to trust on the central financial authority.

Once upon a time, multi-user time-sharing computers were facing a similar problem. Users had to rely on strong password protection and some trust from the admin to keep their information safe.

The admin can only override privacy. The robust encryption made it nearly impossible to access other data for no reason.

It is high time that we do the same for the cryptocurrency.

An e-currency is based on cryptographic proof, without the need to trust a third party go-between, money can be secure and transactions effortless.

Facebook has more influence over a lot of aspects of our lives.

First, you happily gave your personal information to them. This allowed them to analyze and understand your preferences about virtually anything, including your favorite brands and businesses.

This highly sought-after information was then sold to marketers.

And now they’re launching their cryptocurrency to get inside your wallet.

Wait. What? Is Facebook launching cryptocurrency?

I’m serious, they are launching, and they’ve dubbed it Libra. The initiative will be managed by a conglomerate of tech and financial giants, including Visa and Mastercard.

If we talk about the technicities Facebook cryptocurrency, Libra has the same anonymous properties as of Bitcoin, the support system is genius, along with individual apps.

The real reason behind launching a Facebook cryptocurrency

Facebook uses data from 2.3 billion users to make goliath profits. Now, with Facebook cryptocurrency profits will reach new heights.

A payment system will allow Facebook to gather a plethora of spending habits of its users. Even if a fraction of people conduct online shopping via Libra, information about consumer buying and spending patterns of millions will be sent to Facebook, making them even more coveted by the B2C marketing fraternity.

A website design agency with a relentless focus on results!

The same will be valid for Facebook advertising. It’s not the size of the Facebook audience that counts; it is the ability to target those users who are willing to buy.

Although Facebook is claiming that ‘All the data and information from Libra will be kept separate from ad-targeting business.’ However, we all know how that turned out to be a massive failure for Facebook.

David Marcus, who heads the currency project made it pretty clear in his tweet, ‘We understand we will have to earn your trust.’ Even if the project is left separate, there is an ample amount of opportunity that how data will be logged in the payment system and where will be stored?

Capturing the attention of massive, active & hungry users

The tech rivals of Facebook are already using payment systems, Apple Pay, Google Wallet, Samsung Pay, and Amazon credit cards. Facebook is now aiming to gain some market share by its payment solution.

According to Libra’s website – this project aims to pull the 1.7 B users who don’t own a bank account. With a currency system in place, Facebook will be able to capture the attention of all those hungry users who want to buy but don’t want to give their card details anymore. Last year, transactions in bitcoin, the most widely used cryptocurrency, made up less than one-tenth of one percent of all financial transactions.

“These cryptocurrencies, in general, have been quite difficult to acquire and use,” said Cathy Barrera, founding economist of Prysm Group,

In a way, Facebook is doing a favor to other people. It’s easier to pay virtually where a physical person executes the payment.

Just associating with Facebook name people will now start trusting cryptocurrency

While only 7% of the users claim that they have ever invested in a cryptocurrency, think how much this number will shoot if Facebook is backing it up.

Facebook cryptocurrency predictions

  • Facebook aims to market the product in developing countries where there is a higher chance to gain power.
  • Facebook will grow and gain power in the global capital market.
  • Facebook will update outdated financial processes by a cost of regulatory uncertainty from the government.
  • There will be much discussion on Facebook’s regulatory reporting program in the coming weeks.
  • Eventually, just like everything else, Facebook cryptocurrency might turn out to the Trojan paradise for hackers that will benefit the bitcoin.

The Downside for Facebook

Facebook cryptocurrency will be launched under the watchdog of Trump administration. This means that there will be extra scrutiny on everything. From handling the privacy to any antitrust activities.

Moving forward for Facebook is hard because of the various cryptocurrency operations in the U.S closed over the past year.

The thing with cryptocurrencies is that governments hate it. That’s because there is no way to regulate it, which leaves no room for the government to control it. So, in a way by including government, Facebook is not favoring them.

In a stroke of confidence, Cameron and Tyler Winklevoss accused Zuckerberg on stealing the Facebook idea from their college. The Winklevosses settled the argument for $65 million back in 2011, then reinvesting the amount in bitcoin which has grown exponentially over the last few years before crashing $20,000 in late 2017.

That’s a Wrap

Libra starts to look like more of a power grab than a move away from fiat currency. Just like everyone else, we are also excited to see what the future holds for Facebook cryptocurrency.

We have warned you regarding the digital storm that is about to come. You can either be a part of it, or you can choose to stay away from it. In the end, it is all about people. It would be best if you moved in a direction where people are buying stuff.

Yousuf Rafi

A Caffeine dependent non-mainstream person trying to elevate small talk to medium talk. I know I will win, not immediately but definitely. I do most of the talking in my head. However, for other things, I prefer writing blogs.

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