Facebook Libra – Facebook’s plan to operate its own digital currency poses risks to the international banking system that should trigger a speedy response from global policymakers, according to the organisation that represents the world’s central banks.” Do you agree with this statement? Also, Questions over privacy of financial information have emerged to put into question Facebook’s credibility of managing a digital currency. Recalling the Cambridge Analytica scandal, which saw the hijack of 87 million users data, just a year ago, Facebook does not have a positive track record of securing users’ data and privacy. Are users concerned about ensuring the privacy of their data? Can users ensure the real security of their data?
David Reischer, Attorney & CEO of LegalAdvice.com, said:
My initial objections to Facebook launching a crypto endeavor is two-fold. First, Facebooks involvement in the crypto space will be a powerful alliance between so many corporate behemoths, including Visa, Mastercard, PayPal, Uber, that it just smacks of monopolistic behavior. I shudder to think how such monopolistic power could possibly be abused by Facebook.
Secondly, Facebook’s has an abysmal track record of protecting user privacy. Facebook’s data surveillance-dependent business model will not translate very well to the crypto industry where the privacy of banking transactions for small businesses such as ours is an extremely high priority.
Dary Merckens, CTO of Gunner Technology, said:
1) Are users concerned about ensuring the privacy of their data?
Yes! And they should be! Consider what cryptocurrency is largely used for. Foremost, it’s used for currency speculation, which is why cryptocurrency as a whole is a massive speculative bubble and always will be until it crashes and bottoms out at its functional value, whatever that may be. As far as Libra goes there, Facebook’s currency is fine. But then consider how else cryptocurrency is used.
Beyond currency speculation, cryptocurrency is mostly used for illegal activities. It’s used for illegal purchases like drugs, firearms, and child pornography. It’s used for money laundering and tax evasion. It’s used for ransomware and evading sanctions. This is how people are actually using cryptocurrency. Only a fraction of transactions involving cryptocurrency are legitimate. The vast, vast majority are illegal in nature. People are going to trust Facebook with their illegal transactions? Don’t make me laugh.
2) Can users ensure the real security of their data?
And this is why. Anyone who trusts Facebook with anything at this point is a fool. The company has made it clear over and over again, from Zuckerberg at the top all the way down. Zuckerberg’s old tweets calling users dumb f*cks for trusting him – that’s the foundational ethos of Facebook and it always will be no matter how many bogus ads their marketing department puts out touting it’s overwhelming care and concern about user data.
The idea that anyone would trust Facebook to manage a cryptocurrency and
keep their data private is a joke. It’ll never happen and this latest crypto experiment will crash and burn along with all the rest.
Fabio Canesin, co-founder of decentralized exchange Nash, said:
Fabio declares that Libra has no reason to exist and is neither good as a cryptocurrency or stable coin. Fabio says of Facebook, If they want to provide a digital payments network to their users, there is already plenty. Bitcoin is proven to be secure, resilient and already in the popular mindset. Facebook could just unload a few millions on it and offer BTC on their services. They could even contribute to core code in the best of open source spirit like Jack [Dorsey] is doing from Twitter.
Edith Muthoni, Chief Editor in Learnbonds.com, said that:
Facebook’s new cryptocurrency, Libra, hopes to bring millions of people without bank accounts into the digitized economy. Libra users will be able to access basic financial services from the comfort of their cellphones. Despite the positive impact it would have, there is a rising concern about data privacy and security. In the past, the social media giant has had to deal with massive data breaching scandals like Cambridge Analytica, where
data belonging to 87 million users was hijacked.
While Facebook’s Libra is certainly poised to revolutionize the crypto space, the privacy issue is still a pain in the neck for the tech giant. It will be interesting to see how Facebook handles the privacy issue.
During the release of the cryptocurrency’s white paper, Mark Zuckerberg acknowledged that privacy is a top priority. Facebook pledged to direct more resources to ensuring privacy and have a dedicated team of experts to curtail fraudulent activities on its cryptocurrency platform.
World’s central banks are concerned about the influence that Facebook will have to the international banking system. They are worried about data privacy and competition as well as the possibility that it would undermine the stability of the banking system.
Caleb Chen, MSc in Digital Currency – University of Nicosia, said:
Facebook’s plan to operate its own digital currency poses risks to the international banking system that should trigger a speedy response from global policymakers, according to the organisation that represents the world’s central banks. Do you agree with
I do agree with this statement. Banks are right to be threatened by Facebook’s announcement of its own centralized digital currency – because Facebook’s international reach is larger than theirs.
Are users concerned about ensuring the privacy of their data?
I don’t think that Facebook users are truly concerned about ensuring the privacy of their data or else they wouldn’t be Facebook users. If you use Libra, have no doubt that your financial activity will be monitored and extrapolated on to sell you ads.
Can users ensure the real security of their data?
Users can only ensure the real security of their data if they hold it themselves and they hold the keys that encrypt them – to speak broadly. Giving something to Facebook or any other centralized third party and trusting them to keep it private and secure is a pipe dream. The real potential with Facebook’s Libra is as a wide on ramp for traditional currencies to be converted to centralized digital currencies and finally to their final store of value: decentralized digital currencies.
Braden Perry – Cybersecurity Attorney, said:
The major takeaway is that this is an ambitious project that looks to upend traditional payment processors like Paypal and Venmo. This would be a stablecoin on the Libra Blockchain, which is a public ledger designed to accommodate extremely quick transactions. The goal is to eliminate transaction fees and create a universal payment system capable of quickly transacting payments around the world. These transactions would be pseudonymous, meaning they are available to view on a public ledger, but without PII, including names, etc. The way it’s designed to work would be to have a user purchase Libra, use it in transactions, then cash out whenever they want through either a wallet that is compatible with Libra or Facebook’s Calibra wallet, that will be built into the Facebook and related apps. Officially, Facebook won’t control Libra, but it will be a major player on the Libra blockchain. From a privacy perspective, it’s difficult not to be skeptical. According to the Facebook/Libra whitepaper, By default, Facebook won’t import contacts or any of profile information but will request you do so. It also states that it won’t share any transaction data back to Facebook, so it won’t be used to target you with ads, rank your News Feed, or otherwise earn Facebook money directly. The whitepaper states that data will only be shared in specific instances in anonymized ways for research or adoption measurement, for hunting down fraudsters or due to a request from law enforcement.
Congress has already called for testimony from execs in charge of the project. Citing Facebook’s recent privacy issues, House Committee Financial Chair Maxine Waters promised aggressive oversight into privacy and national security concerns, cybersecurity risks, and trading risks that are posed by cryptocurrencies.
In summary, Libra and other Blockchain technology have vast potential. Companies looking to innovate and are proactive in its uses will likely reap benefits in ways we can imagine and in likely unimagined areas. As the regulatory framework progresses with innovation, companies will benefit. But that regulatory framework will likely lag the innovation, and frustrate those willing to adopt new technology.
Simon Bogdanowicz, Founding Partner, BlockTeam Ventures said:
No, I do not agree with that statement since Facebook’s Libra is going to operate much like a payment system, quite similar to Playpal, which can co-exist with international banking systems without taking consumers away from other traditional money management services. Although Facebook will help with greater understanding and adoption of digital currencies, it is a not on track to compete with banking systems of today, as Facebook’s core business after all is in social media and advertising.
With regards to Facebook and data privacy, users are and rightfully should be considered about ensuring the privacy of their data. The Libra digital currency will be issued by a centralized entity, which as we know is can always be susceptible to hacking. In addition, Libra’s digital wallets will reside on a user’s cellphone. With the rise of sim swaps hacks, where hackers can steal your sim card and transplant it to another phone without
you knowing it until it’s too late, these mobile digital wallets can easily be compromised even with 2FA (two factor authentication enabled). Even with Facebook storing your financial and payment information in a new entity, Calibra, the data is still susceptible to theft and manipulation. Users can ensure the real security of their data by staying away from Libra. Even after a Facebook user leaves and deletes Facebook today, their data still
resides in the secondary data markets that exist for advertisers and the like.
Dr. Michael Yuan – The Cyber Miles Foundation, said:
For Facebook, this is an enterprise version of FOMO, as Facebook must do something in crypto market. Globally, however, many Facebook users don’t have credit, so the question becomes: Can Facebook Libra bring online commerce to them—safely, securely? (In short, it’s going to take more than Facebook—a veritable Libra coalition—to make that a reality.)
For context, the original Bitcoin white paper was titled “a peer-to-peer electronic cash system.” 10 years later, Bitcoin now is primarily a store of value (i.e. digital gold). It is out of reach of most of the world’s poor and has not succeeded as a payment system. Positively for Facebook Libra, though obviously a centralized system—an e-payment system that is markedly different from Bitcoin’s decentralization philosophy—it may help reduce online payment costs. (If you want to build an AML or KYC and credit system, however, the gap that Facebook can improve is not too much.)
The key measure of success is whether it can help the poor and unbanked integrate into the world’s financial system. Libra coin now wants to become the electronic cash, yet it is not truly peer-to-peer; it’s governed by a coalition of businesses and governments. Nor does it necessarily alleviate privacy concerns, even though the beauty of a distributed ledger technology like blockchain is that decentralization (and encryption) are better for data protection.
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