Since Facebook revealed its new project Libra, and everything that is related to it, people are starting to wake up and speculate – Is Facebook’s Project Libra going to take over the cryptocurrency industry? Such a company which has billions of daily users simply couldn’t not leave a mark. Whether it will be a good or a bad mark, let’s see.
As we reported earlier, Facebook announced the white-paper of their ever long speculated crypto project – Libra. Along with Libra came the Libra Association, Libra Reserve, and Calibra. Calibra will first serve as the digital wallet where users can store their Libra’s and exchange with each other. Libra Association will govern this app, and eventually, Calibra is meant to develop financial services and products around the Libra Network. The Libra association consists of 28 large corporations and companies which specialize in wide range of industries coming from blockchain and finance ranging to entertainment and telecom companies.
After these news struck the cryptocurrency ecosystem, people are starting to ask questions, whether Facebook could disrupt the crypto industry as a whole?
Facebook Completely Misunderstands Money
As Caitlin Long, the member of Wyoming Blockchain Task Force, also known as the crypto Mom, yesterday described in her first Project Libra analysis:
“Facebook completely misunderstands money. Facebook understands payment systems – but that’s not the same as money. Two telling quotes: “Libra is backed by a reserve of real assets.”; “Many cryptocurrencies today (eg #Bitcoin & #Ether have no underlying assets to back them.” Money is a good that serves as an HONEST LEDGER – it doesn’t need to have intrinsic value because it attains value by people trusting it to be an HONEST LEDGER.”
She points out that just because Facebook is backed by many different assets, doesn’t mean that people will give the currency value. She believes that Facebook has widened the conversation on what money really is.
“Libra is the first denationalized “money” that billions of people in the world will encounter […] billions of people will soon become woke to the unfairness and instability of current monetary and payment systems,” writes Caitlin in her Twitter profile adding: “People are smart – they will figure out Libra isn’t scarce and will migrate to bitcoin and other crypto over time,” she predicts.
Libra Will Educate More Users
Because of yesterday, millions, if not billions, of people realized that cryptocurrencies are a real thing because up until now, all they had heard about crypto or Bitcoin was that it is a speculative and very volatile market without any future or actual use case. Now when the man himself – Mark Zuckerberg makes a Facebook post about a cryptocurrency that Facebook is developing… I mean, I fully believe that yesterday alone made more people aware than the last years in crypto combined.
The fact that a company of such scale and authority recognizes crypto as a asset class, that has a use case, is huge! And I tend to agree with Caitlin. The time frame could be 5 years what we are looking for, but eventually people will start looking into other crypto’s. I mean, as soon as project Libra will lack in something, there will always be hundreds of cryptocurrencies that will do it better. And you know – once you start fooling around with sh… I mean Altcoins, you eventually find Bitcoin and stick to it. Of course, everything won’t go as smooth as I just described and it most definitely won’t happen anytime soon, but it could be a pattern. Most importantly, if Libra or Facebook is talking about third-world countries where people are struggling to even pay the transaction fee, then once they take the bite by Facebook, they will realize that because of crypto there can be even less fees or even a fee-less system.
But all-in-all, Facebook has done a really great job in terms of courage of taking the first step. It could’ve been Google, or any other company, but Facebook took the first bite and takes on the mission to educate billions of people. These might not be intentional lessons on what crypto is, but still, this will do just as fine.