Why Everyone Hates Libra?
By Andrey Lukashenkov on ALTCOIN MAGAZINE
Libra tries to create new money. But it looks like, despite all effort, since the white paper came out six months ago, for sure it accomplished only one thing — made everybody hate it. Let’s try to find out why.
Easy to see why Libra arises tension in the incumbent crypto community. All sorts of crypto kitties see their pet projects — while being interesting as pure intellectual exercises — failing to achieve stated goals. Everybody expected the Facebook blockchain project to attract a new breed of investors, melt crypto-winner ice, and spur a fantastic price rally in traditional crypto assets. However, it brought down only massive regulatory scrutiny on all sorts crypto and beyond, to anything with a remote possibility of being noncompliant with BSA Travel rule. So a friend hasn’t lived up to expectations and became a foe.
Regulatory pushback appears to be something Libra team has heavily underestimated. All regulators are bureaucracies, and bureaucracies are asking their central questions: “Who gets the credit? Who will be blamed if it causes problems? Will it shift the power structure, costing us jobs? Or will it make some subsidiary department more important?”. The political questions.
Now they are asking them loud. Why would yet another ‘payments-on-blockchain’ project would attain such attention? Precisely because of that — Libra tries to create new money, and we need to look at it from the broader perspective of the history of money.
In this context, I find compelling the view on the history of money offered by an anthropologist and anarchist David Graeber in his treatise on Debt (Debt — Updated and Expanded: The First 5,000 Years).
As Graeber put it, “Within a community, anything could function as money provided everyone knew there was someone willing to accept it to cancel the debt.” But he also makes a convincing point that, counterintuitively, people wouldn’t use the money until they have to. Markets and money are secondary to prevailing power structures.
There is ample evidence that coinage came into existence to establish a structure (known as a ‘market’) needed to feed parked armies. A few hundred men, quartered at the fringe of the empire, would have consumed everything edible within walking distance in two days. One would need to use at least the same amount of people to keep them fed. Kings could have all gold and silver in their possession. Still, after stamping their picture on the small pieces of precious metal, they would give them to soldiers and demand everybody else to return some of those back as taxes. As a result, to get a hold on now much-needed money, all would be happily involved in trade with soldiers providing them with anything they might need or want.
Libra’s most significant advantage is not in having combined billions of users that are served by Libra Association members. The point is, these companies can establish similar rules.
They can impose the tax on advertisers demanding to pay for some services in Libra. And disseminate Libra to users via attention based payments also in Libra. Or offer discounts if users to pay in Libra. Taxes, after all, initially were payable by the defeated populations. Free citizens would get proceeds from gold and silver mines, and taxes, disseminated among them (Meal’n’Real).
These all might sound brutal, but it is the reality and the very nature of money. They are emerging aligned with power and violence, and there is little we can do about that. The electronic kind of new money creates more tensions. The Internet of money would create an environment with less friction both for good and for bad people.
On the regulatory side, many seem to believe that Libra designers did all they could to let it fall through the regulatory cracks. They are promoting the notion that regulation should be technology-neutral, but that can’t help to hide confusion. Being hard to regulate would be the destiny of any genuine innovation. There is anecdotal evidence of PayPal treading the same waters some twenty years ago.
Libra power play is immense. To borrow from Matt Levine:
It will only get curiouser and curiouser in 2020. Buckle for a wild ride and have fun!
