The Case Against Facebook’s Libra Coin
By Ken Coinsspent on ALTCOIN MAGAZINE
The biggest news in the crypto space and probably the entire Fintech sector this week is the launch of Libra, the cryptocurrency developed by social media giant Facebook. The cryptocurrency will be used on Facebook Messenger and WhatsApp, allowing people to send funds to virtually all parts of the world. Unlike Bitcoin, the Libra Coin is a stablecoin. Thus, it is not subject to market volatility.
However, despite the warm welcome it has received and the fact that it could reach over 2 billion people around the world, there are concerns regarding the cryptocurrency. Let me share a few with you.
Privacy Concerns
If you have been following the tech sector for a while, you would be familiar with the Cambridge Analytica scandal. Facebook, alongside Google and Twitter, were used to influence the 2016 United States presidential election.
Since then, Facebook has been embroiled in privacy cases. The social media company collects user data and sell it to third-party advert companies. This is how they make their money. One of Bitcoin’s features is anonymity, enabling people to send funds anonymously (sort of). With Libra, that won’t happen.
Facebook would have the transaction details of its users. Who is the say that they won’t sell those details to third party companies again?
Security Concerns
Libra, like other cryptocurrencies, is developed on a blockchain. Thus, giving it a high level of security. While blockchain is secure, the security problem lies with Facebook. The social media platform could rank as the number one when it comes to hacks.
User accounts are hacked virtually every day on Facebook. Now that money is involved, the hackers will intensify their efforts unless Facebook does something about the security issues. Basically, your funds could be at risk on Facebook due to hackers.
Is It Really Decentralized?
EOS is not entirely accepted in the crypto space as a cryptocurrency because block producers (BPs) control the network. Most people believe EOS is not decentralized since the BPs have the final say on what happens, and this leaves room for manipulation.
Well, Libra is the same. Facebook partnered with Libra Association, a consortium comprised of companies such as Uber, Visa, Vodafone, and others to develop the cryptocurrency. In essence, each company has a share in the cryptocurrency, ensuring that Facebook doesn’t have a centralized authority over it. However, the consortium will have substantial control over monetary policies, and this is not what cryptocurrencies are about.
As a crypto fan or follower, any cryptocurrency that is not genuinely decentralized poses privacy and security issues is not really crypto. Libra ticks all of these boxes.
Sources:
https://www.ft.com/content/14e3b778-92af-11e9-b7ea-60e35ef678d2
https://techcrunch.com/2019/06/18/libra-analytica/
Read more on the topic of cryptocurrency at https://coinsspent.com
