It seems that there’s a definite revolution on the go. Even though Bitcoin exists for more than 10 years now, and its competitors as Ethereum, Litecoin, and XRP have been around for between seven and four years, the not even born yet, Libra, seems to gain its momentum as well.
So, Facebook decided to get into the crypto space proposing the launch of a new global cryptocurrency called Libra. David Marcus, a leader of the project formerly worked at PayPal and then moved to Facebook, last week was grilled in front of the U.S Congress whose members were all not very crypto-friendly. We’ll just mention senator John Kennedy who, on the first day of Marcus’s hearing, called Facebook “a country” and not a company.
The truth is, Facebook currently has 2.4B users, which, if it were a country, would make it far bigger than China. And one of the things that defines states is that they do currencies. By launching Libra, US Senate said that Facebook is effectively asserting that it’s a state too.
Let’s also not forget Donald Trump who, in his tweet monologues, clearly said that he is against all cryptocurrencies as well. He said:
“I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated crypto assets can facilitate unlawful behavior, including drug trade and other illegal activity.”
However, even though this might seem like a completely negative sentiment towards the crypto space, it introduced the idea of Bitcoin and cryptocurrencies to a whole new audience. Let’s just mention last research carried out by U.S. brokerage eToro that shows 58% of the U.S. adults have heard of Bitcoin, but 16% of people know about Libra too – and it is just a month after it was unveiled. Just for a comparison, this grows out awareness of Ethereum that is 12%, and also other cryptocurrencies that were found to be known by even fewer people.
Guy Hirsch, U.S. managing director of eToro said:
“We believe that crypto and the blockchain technology that underpins it will be essential to tomorrow’s economy. By introducing the concept to a new audience, Libra could play a vital role in the evolution of decentralized and more democratized finance.”
Survey also showed that Facebook is facing major trust issues when it comes to Libra. 54% of respondents had concerns about how the social network giant would manage their personal data and only 17% of respondents said they would trust Facebook as much as their banks.
The thing is, Libra coin will be tradeable on both conventional stock exchanges and cryptocurrency exchanges. This could mean that users will be able to trade Libra against major cryptocurrencies such as Bitcoin or Ethereum. If so, this event is very likely to generate knock-on effects for the cryptocurrency markets, where investors will see increased volumes from curious retail investors.
Be it as it may, Libra is now confronted with a paradoxical situation at least – it has to be centralized enough in order to prevent illicit activities by freezing funds, and in the same time, it has to be decentralized enough not to discriminate against the participants based on the use of these funds.
What to say than – good luck with that.