Why Facebook’s Libra Should Exist.
By Philip Hoeller on ALTCOIN MAGAZINE
Just a few weeks before I ever heard of Facebook’s Libra initiative, I experienced what I consider a perfect use case scenario:
On vacation in Bali, I rented a scooter to cruise down to the beach. Having been warned to pick up enough cash by friends, I spent an embarrassingly long time at a local ATM trying to figure out how many Indonesian Rupiah I needed to make it through the week. My obscenely overpriced AT&T travel plan was not delivering data so looking up the exchange rate was not an option.
I chose 500,000 IDR — the largest denomination on the drop-down menu and the machine whirred to life gradually dispensing a large stack of paper with many different colors. I received what came out to roughly 36 USD. “Might as well be monopoly money” I thought, as I stuffed my wallet well beyond it’s comfortable carrying capacity.
The scooter shop owner eyed me suspiciously as he held out his hand, evaluating the odds of me damaging or losing his bike. He wanted my passport or driver’s license as collateral and I, suspicious of his OpSec, pushed back on this onerous requirement.
To my surprise, he suggested connecting on Facebook would meet his KYC requirements. I pried a large wad of cash out of my bursting wallet and squinted, trying to count the many zeros on each bill.
Side note: This doesn’t get easier in dark, crowded environments that serve liquor.
We shook hands, I boarded the scooter and pulled into the street. Cruising toward the setting sun, I couldn’t help but think about the obvious business opportunity at hand for someone large enough, with the network and liquidity to pull it off.
Imagine: This interaction could have been friction-free, saving me the trip to a shady ATM, eliminating pain points and increasing transparency for both parties wanting to exchange goods at fair market value.
But “Facebook is not a bank”, you say? “They don’t deserve our trust.”
Well, neither do banks. Nor does the government.
That said — this is not about the trust-less less algorithm governing Bitcoin or how it can serve as a hedge against macro risk.
This is about how we need our payment systems to catch up with the ease-of-use and efficiency demonstrated by Super Apps such as WeChat in China.
This is about adding options to our choice of payment channels despite the risks, because the current system is not working for enough people and because enabling entrepreneurship and freedom of innovation is part of the American way.
The Libra could provide easier, faster, safer, cheaper global payments to consumers AND increase optionality (including to some of those unbanked) while helping the United States to maintain it’s an edge in FinTech R&D.
I believe optionality is a crucial component of free-market capitalism and that (despite the paradox of choice) we are better off with more options than without.
The potential upside of innovation and the opportunity cost of not innovating outweigh the downside risk in a system where fiat and other cryptocurrencies can coexist — particularly when the trend cannot be feasibly reversed:
Corpo-currency represents a logical extension of surveillance capitalism. The effects of surveillance capitalism on society have been drastic and justifiably creeped out enough people to push back on the likes of Facebook and it’s ilk.
Yet, whether we like it or not surveillance capitalism is here to stay (the genie is out of the bottle). We already blindly trust the individual corporations sharing governance of the proposed Libra network with our sensitive data.
So, should we trust them to govern each other? Probably not.
Regardless, I am hopeful that that letting currencies, commodities and payment systems compete on the open market is a net benefit to society and that the inevitable emergence of a Libra-like currency could have improved at least one cumbersome transaction in Bali.
