facebook is trying to save itself by getting into the crypto game

Facebook's new cryptocurrency is a scary and dangerous ploy to further exploit its users, and government agencies are right to be worried.

money trap

Facebook, the company that sells your data to the highest bidder, as well as the lowest, now decided that it wants even more of your information by getting into banking. But being the company it is, however, it decided not to bother creating an actual bank or payment platform but to hop on the crypto bandwagon and design its own cryptocurrency called Libra. It’s hard to overstate just how bad of an idea it is to combine a data harvesting venture with a libertarian version of the digital economy, one they don’t seem to realize has been tried before and abandoned as soon as it was feasible, but in true Facebook style, Zuckerberg is going for it anyway, billing it as the solution for the unbanked and the perfect way for migrants and immigrants to send remittances back home.

Setting aside the fact that information about remittances can and will be abused by the current administration, Libra itself comes with a wide variety of problems. First and foremost, consider that cryptocurrencies have wildly unstable prices, making real world adoption difficult and necessitating a special scheme to try and keep them stable. Furthermore, Facebook is still trying to assemble a network of partners that can actually turn Libra into something legitimately useful, and while some major companies are on board, it seems they’re just speculatively betting on a crypto play instead of actually trying to turn this into a real-world currency. The advisory board Facebook is putting together for this idea is less of a panel of experts and more of a side venture for crypto investors and Libra itself is just a gift card with a crypto facade.

Secondly, it’s not like Libra is actually going to help the unbanked because their problem is a lack of money to put into bank accounts, not a desire to make their money harder to access and easier for a third party to track. And ultimately, at the end of the day, this is what it’s all about. There’s no desire to help those without bank accounts, Facebook is simply trying to get more data from its users, and what data is more valuable to it and its advertisers than access to their users’ actual spending patterns? Instead of looking at it as an endorsement of cryptocurrency, or long-term strategic thinking, or a step towards any of the utopian visions endorsed by tech pundits, we should be looking at Libra as yet another attempt by Facebook to turn you into a marketable, sellable product.

will anyone actually use libra?

Of course, there will be a market for Libra. Those in third world countries with highly unstable economies are already turning to cryptocurrencies for some transactions. Plenty of people without bank accounts may also try this payment platform, either unaware of the risks of giving Facebook data about their spending or figuring that it’s their best bet to move money around because existing predatory services will be more expensive. But any serious crypto enthusiast is extremely unlikely to go near it. Remember that the whole point of crypto is to get away from a central authority issuing a currency, and at least some anonymity in your transactions. Having your spending tied to your real name and circle of friends, packaged for insurance companies, lenders, and anyone who wants to sell you something, is exactly the thing the creators of the crypto economy wanted to avoid.

So, not only is Facebook not solving an actual, legitimate problem with banking, it’s also ruining crypto for everyone by removing its price fluctuations and de-anonymizing transactions on its blockchain. It’s also compromising its users’ security by giving hackers an absolute goldmine of information perfect for identity theft, money laundering, or credit card fraud. The only sensible response to Libra is to run, not walk, away. But then again, Facebook may know and understand all of this, and not seriously expect the Western world to embrace its attempt at creating Zuckcoin. It may very well be trying to target third world countries where currency is not to be trusted because that is the only way left for them to expand.

facebook’s callous ploy to stave off stagnation

Just consider for a moment that in United States and Canada, younger generations are avoiding it like the plague. Sure, they’re using Instagram, which is owned by Facebook, but they are sharing far less valuable information on it. Instead they are flocking to Snapchat and private, encrypted messaging apps, and using social media only for advertising. They think of social media as a way to promote their work or side hustle, not as the space to share private thoughts reality TV confessional style or get on a soapbox about controversial topics. Over the long term, this is ultimately a good thing, unless you’re Facebook, and your entire business model hinges on people oversharing.

This is why Facebook is trying to spread to places where people are still getting familiar with the Internet and them, and trying to become a centralized hub for how they live their digital lives. Unfortunately, as we’ve seen in Myanmar, the consequences of this can be dire, and it’s taking those new to the Internet and social media a while to figure out that just because the platform gave someone a voice, doesn’t mean that voice is legitimate, or vetted. People all over the world are prone to confirmation bias, and Facebook not only allows them to indulge in it, it fights any effort to make its users consider that their opinions may be wrong or to impose any consequences on those who use their platform to spread hoaxes and propaganda, worried far more about users leaving than the impact they have.

Here’s the bottom line. Facebook exists because people wanted to connect with their friends and make planning and promoting events in their social circle easier. As it pursued growth by opening itself up to everyone and becoming an overcrowded public square, their first adopters and those it needs to join to keep growing have soured on it, referring to it as “the place where angry old people rant about politics.” So, in the bid to stay relevant, Facebook is trying to both appease its growing boomer base by treating conservative and far right voices on the platform with kid gloves, while also throwing anything at the wall and seeing what sticks. And Libra is just another one of those attempts to ensure its long-term survival.

# tech // banking / cryptocurrency / facebook


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