Libra is How Bitcoin Comes to Your Home

Whether you want it to or not

Facebook logo behind bitcoin-like coins

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I’ve been writing, on and off, about Bitcoin and cryptocurrency for years, mostly in an effort to make it relatable to confused consumers. Now, Facebook and a host of partners are aiming to make Bitcoin relevant to the world, in perhaps the most-self-serving way imaginable.

Overstatement? Maybe. But Libra, Facebook’s plan to create “a new global currency,” is not about investment or building wealth. It’s about transactions across digital spaces and borders, many of which will happen — especially in the early days — on Facebook’s network of services, including Facebook, Messenger, Instagram and WhatsApp.

The Future of Shopping

Facebook's Mark Zukerberg at the F8 conference
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Back in April during the social network’s F8 developer’s conference, Facebook CEO Mark Zuckerberg seemed fixated on shopping. “Payments and private commerce is one of the areas I'm really excited about," he said. Zuckerberg introduced a number of new initiatives that would enable commerce on his core platforms. With Libra, which is not set to launch for another year or so, that vision is more complete, and there’s a good possibility that for the first time in human history, consumers around the world will be transacting in real time with the same currency. It’s like the Esperanto of money.

It’s true, Libra is still just a detailed whitepaper and a handful of disparate code bits that enterprising Linux developers can play with, but it’s also more concrete than, say, Hyperloop was when Elon Musk released his Hyperloop Whitepaper in 2013. Unlike that document, which Musk wrote but had no intention of executing, Libra is being driven primarily by Facebook, which promises a leadership position through this year and will share an equal governance role when Libra launches sometime in 2020.

Facebook and partners like Visa and eBay have also sought to squash the volatility associated with most cryptocurrency enterprises (which I think has been the allure for investors). The decision to back Libra with a real reserve of assets that, while not completely fixed in value, do make the crypto-currency more like the silver- and gold-backed currency of the early 20th Century.

In addition, putting a not-for-profit governing body, the Libra Association, in charge of Libra currency could shield it from the kind of speculation that’s led others to make and lose Bitcoin fortunes. At the very least, the Bitcoin industry is excited. Bitcoin value skyrocketed on the Libra news (it’ll return to earth in short order).

So, it’s all good. Facebook and it’s Super CryptoFriends have solved the world’s currency conundrum. We’ll all shop and transact in Libras (which could someday be equivalent to American Dollars) and we’ll all live crypto-ly ever after.

Please hold your guffaws.

What Facebook Gets

Obviously Facebook, the company spearheading this initiative, is a for-profit company and one that is in the middle of a rather painful sea change brought on by its own data and privacy missteps.

Its members are tired of Facebook using their data and interests to drive advertising revenue. They’re tired of being the product. “Privacy is the future,” said a chastised Zuckerberg during F8. However, it’s clear now that Facebook’s privacy pivot is nothing of the sort. Zuckerberg didn’t really hide that fact. He spoke repeatedly of his interest in commerce and how he was adding it to many of Facebook’s platforms. The missing piece, though, was Libra.

As a global network of friends, families, groups and companies, there is nothing more powerful or profitable than frictionless and borderless transactions. Zuckerberg spent years working to connect all of humanity. So far, he has 2.32 billion of us. In doing so, he also made sure that even those with sub-mobile broadband connectivity could still engage in Facebook activities. And where connectivity was non-existent, he created (and grounded) new ways to connect.

With Libra, every single one of those Facebook members will be able to transact, almost for free, with anyone in their village, neighboring city, or around the world with Libra. Facebook will not own a piece of each Libra, but it’s certain to take a micro-piece of many, if not all, transactions.

It’s a mercenary wearing the face of an altruist.

Libra and You

Libra logo behind a bitcoin-like coin
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What if you care nothing of Facebook’s ad business, data uses, privacy efforts and, especially, Bitcoin and cryptocurrency? That’s fine and, as I see it, none of that will preclude you from having your first Libra transaction experience.

Imagine Facebook is like Starbucks. If you’re like me, you have a Starbucks card that you loaded up with money so you can use it when getting a mocha latte while earning some Starbucks rewards. In the case of Facebook and Libra, perhaps Facebook will let you load up a virtual Libra card with traditional dollars. Unlike the Starbucks cards, though, your dollars are transformed into this new currency. You may or may not see a Libra symbol, but you will know you have the equivalent of, say, $100 in Libras from the Facebook system.

Unlike a Starbucks card that limits your transactions to your local Starbucks, your Libra cash will be good at all sorts of partners and even through Mastercard and Visa. This means you might also be able to withdraw Libra as U.S. cash at your local ATM, as long as it supports your credit card account and the Libra sub-system.

Online, you will likely use Libra to buy stuff inside Facebook, Instagram, and WhatsApp, as well as to transfer funds, à la Venmo or Apple Cash. You’ll even be able to use it to buy something from someone on eBay (PayPal, also a partner, style). All of this will be done with a single Libra account. And you don’t have to understand a single thing about bitcoin, ledgers, crypto, or who the Winklevoss Twins are.

What’s missing from this equation is, and this might please you, banks, governments and local monetary systems. The U.K. Pound could collapse, but your Libra will remain untouched. The U.S. dollar could skyrocket in value and, well, the value of your Libra will remain unchanged.

I don’t know how successful Facebook and partners will be with this Libra initiative, but this is the nearest thing to a rational Bitcoin system I have ever seen. Oh, and Facebook will probably get even richer in the process. So, there’s that.