Is Libra’s “Crypto Mafia” Losing Support?
You can kill decentralization, but can you clone a payment tool monopoly while calling it a “crypto”?
Crypto seems like an echo of what it once was in the mainstream media. Facebook started crypto bans to “protect consumers” from ICOs, but then they created Libra.
It was so surreal that they called it a cryptocurrency.
Now it appears amid regulatory setbacks and global concerns, some of Facebook’s Libra organization investors are considering leaving the operation due to intense regulatory scrutiny.
The Financial Times was the first to report this story on August 23rd, 2019.
Digital Currency Fraud as a Playbook
What I find so interesting about this story is how social media platforms like Facebook, Google and Twitter literally banned cryptocurrency-related Ads for a good long period before Facebook’s blockchain division launched such a FinServe monster idea as the Libra Association.
It’s possible Silicon Valley saw crypto and its fake decentralization movement a threat to its business model that’s advertising based.
At least two of the 28 entities that have signed on for Facebook’s planned Libra currency are now getting nervous about the project. I mean, wouldn’t you?
Libra Association is a Centralization Scam
The EU is already investigating Facebook’s Libra project for anti-trust concerns and red flags. When you put the top payment services in a consortium and call the product a “crypto” you have to wonder at what Facebook thought it could get away with.
The companies, which some have dubbed the “crypto mafia,” include heavy hitters from Silicon Valley and Wall Street, like Uber, Spotify, Visa and Mastercard. These are in a way like Zuck bros. Masquerading under the banner of “crypto” to centralize global payments, disrupt banking and harvest financial data of the unbanked in developing countries is fairly nefarious, I think.
It’s an experiment in monetary systems for the digital age, and has inevitably been compared to popular cryptocurrencies like bitcoin. But within the crypto community, Libra is not taken seriously as a crypto. It’s a hybrid cloning play that utilizes some aspects of blockchain and crypto tech for Facebook’s own ends.
Permissioned Blockchains at the Service of Payments & BigTech
Libra’s blockchain is permissioned and with a Libra Association based in Switzerland sounds more centralized than anything even slightly resembling a decentralized architecture. That’s the nail in the coffin for Libra’s blockchain. It’s more like a payment tool trying to be cool like Bitcoin. I was shocked when crypto enthusiasts were praising it in the early summer of 2019.
That some early backers in the Libra Association (tl;dr crypto mafia) are backing out or uneasy about global perception isn’t surprising. Facebook has grown up a monopoly representing Silicon Valley evil, so is sort of used to it.
Libra will create a centralized structure governed by an unelected ‘association’ composed exclusively of large institutions who have purchased their voting rights. It’s probably the biggest scam (or fraud) in all of blockchain history.
As Libra has killed “decentralization” in the media, it’s rare to hear about Ethereum or other ecosystems since the Libra PR campaign was launched. When you and your friends control a lot of the media and the way algorithms distribute PR, clearly your own solution and product seems to get the hype in 2019.
The Abyss of Crypto in the Media
Even on Medium which used to be an important network for blockchain, decentralization and cryptocurrency articles, there’s a shortage of information now and blockchain startups are disappearing in the void Libra has created.
This is bad for the token economy, decentralization and the developers that were once so excited about blockchain. It’s also odd for the journalism around crypto, as most of it is a corrupt pay-to-play stuffed affair outside of Hacker Noon and Medium.
Libra is a Threat to Us All
So who is against Libra in terms of governance and regulation watchdogs? Take your pick. The Chair of the U.S. Federal Reserve, EU antitrust regulators, the French Finance Minister, the Senate Banking Committee, the House Committee on Financial Services and the Secretary of the U.S Treasury have all expressed doubts about Libra.
Banks don’t really see Libra as a threat, at this stage of the process. But they should fear it since powerful people and big companies support it.
Powerful consortiums like the Libra Association could destroy the trust in blockchain products. When you create a blockchain division and something like Libra, it’s a bit like Silicon Valley poisoning yet another vertical with their advertising schemes. It hurts blockchain startups.
It hurts some of the more interesting concepts around crypto that are truly creative and innovative.
Each member of the association has committed to investing at least $10 million for the development and promotion of the Libra currency. That’s not blockchain, that really does sound like a Silicon Valley mafia. Thanks, Libra, you’ve made everything so very clear for us.
The future of cryptocurrencies is now the belonging of Mark Zuckerberg. Cryptocurrencies are defined by their lack of reliance on trusted intermediaries, all that Libra isn’t.
Follow a Futurist, sign up to receive blog-rolls about breaking news in Business and Technology & related Op-Eds.