A number of cryptocurrency experts revealed on social media that they are not worried about Facebook's digital currency project Libra. They believe that this cryptocurrency may be supported by large companies, but will not compete with currencies such as Bitcoin.
According to recently disclosed information, the social media giant's cryptocurrency will be supported by fiat money to avoid price volatility and will be available for low-cost or zero-cost payments between users of Facebook platforms such as WhatsApp and Facebook Messenger.
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According to reports, Facebook has negotiated with financial institutions, hoping to set up a $1 billion fund to create collateral. The company also negotiated with merchants, hoping they accept their Libra cryptocurrency as a payment method, and even provide Signed a bonus.
Facebook earlier criticized existing cryptocurrencies in an article, saying they failed to gain widespread popularity and were a bad solution for storage value and transactions. According to reports, the company also plans to create an entity ATM for its cryptocurrency and asks partners to pay $10 million to run the node and verify the transaction.
So why is Libra not threatening Bitcoin, Ethereum and other cryptocurrencies? Andreas Antonopoulos, author of "Better Bitcoin," points out that there are five pillars or five principles in the blockchain:
“1. Open; 2. Open; 3. Borderless; 4. Neutral; 5. Anti-censorship.”
Antonopoulos added that from these five factors, Facebook's Libra is not consistent. In the case of Bitcoin, it is open, open, borderless, neutral, and resistant to censorship, but cryptocurrencies issued by one of the world's largest companies are not.
Libra and Bitcoin are very different
He pointed out that the Libra system cannot be made public because each participant must be reviewed, confirmed, and authorized by the social media giant, so individuals cannot publicly join the system. The system is closed and without the approval of Facebook, it is not possible to connect applications to this network or to trade on an independent market.
In addition, the cryptocurrency expert added that because Facebook must comply with regulatory rules, Libra will not be borderless because it must exclude specific countries from its network and must also track cross-border payments.
Facebook's cryptocurrency is also not neutral, because "too much", due to regulatory restrictions, who is the sender and receiver of each transaction, and what the purpose of each payment needs to be. Because of this, it does not have the censorship of resistance because the social media giant must review the transaction in accordance with the law.
“So this is not a public blockchain. It is not a cryptocurrency. It is a bank payment system implemented by a social media monitoring company.”
Well-known cryptocurrency entrepreneur Charlie Shrem also agreed with Antonopoulos, who revealed on social media that he believes that "Facebook coin" is an attempt by traditional financial systems and large technology companies to "encourage people to stay away from bitcoin."
"I tell the truth. I think 'Facebook coins' are big technology companies, banks and credit card companies trying to lure people away from Bitcoin and enter their 'better, easier password' world, which is just a fake as encryption The currency of the currency. Millions of people will be fooled."
Libra only threatens the bank, not bitcoin
According to Antonopoulos, Facebook's Libra will have "the worst capitalist surveillance features, coupled with the inconvenience, seizure, freezing and bureaucracy of traditional payment systems." He said Libra's competition is "very effective" compared to banks and payment systems like Visa, MasterCard and PayPal.
In fact, Facebook's digital currency is challenging banks because it is "more adept at manipulating users' dopamine and investigating them to determine their preferences."
"They are a threat to banks because they have 2 billion users, but they don't threaten cryptocurrencies because the application scenarios are completely different."
Facebook does not give users personal freedom. The company will not provide them with access to the financial system because the financial system is designed for those who have already been included.
In contrast, Bitcoin and other cryptocurrencies will help people without bank accounts to establish banks and provide financial privacy for people. Bitcoin allows users to trade without worrying that the government may freeze their bank accounts or worry that their transactions may be subject to censorship.