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June 13, 2019

Facebook Enters the Crypto Fray

By Alex Mednick

Zuck Bucks have arrived.

No, that is not actually the name of Facebook's soon-to-be-launched cryptocurrency, but then again, its name is yet to be officially confirmed. Rumored to be called "Libra," the new crypto comes with reports of a June 18 launch that has the tech world buzzing.

Libra, as I will refer to it for the remainder of this post, is set to be a stablecoin, which means that its value will be tied to several currencies, such as the US dollar, in order to protect against price fluctuations. This major difference from bitcoin distinguishes the two as distant cousins, perhaps, rather than rivals.

The question of how Libra will be used is not only an interesting question, but also one with well-defined answers. Facebook’s cryptocurrency will be transferrable with zero fees via Facebook products including Messenger and WhatsApp. Facebook is working with merchants to accept the token as payment, and may offer sign-up bonuses. The Information also reports Facebook also wants to roll out physical devices for ATMs so users can exchange traditional assets for the cryptocurrency.

If that's not enough, Libra may also see itself utilized as an alternative to dollar wages. Facebook employees working on the cryptocurrency can opt to give up traditional cash money forever, as they will be given the choice to instead be paid in Facebook’s cryptocurrency. While it remains to be seen how many of them will take Facebook up on that offer, it is undoubtedly amusing/horrifying to imagine one of those Silicon Valley tech bros droning on about how much his life has improved without paper money. It even sounds like the beginning of a Black Mirror premise.

Anyway, Libra is nonetheless an exciting entry into the cryptocurrency market that should capture the attention of investors. Anytime something is linked to Facebook, ears perk up. Combine that with a new crypto, and don't be surprised if we see some fireworks in the coming months. Given bitcoin's strong 2019 and future projections, optimism for cryptocurrencies is legitimate and what many once thought was a "fad" is likely to persist until it becomes an everyday part of our lives.

Getting in on the ground floor of Libra could prove to be the investment that you brag about to friends into your retirement. With its status as a stablecoin, risk is decreased, and its compatibility with Messenger and WhatsApp could quickly assert its ubiquity.

Of course, because it's Facebook, detractors are claiming that Libra could be just another tool for the tech behemoth to gather data. By mapping what Facebook users are spending money on, they could attract advertisers who want to target ads more effectively.

"A better understanding of who buys what or which brands are popular could aid Facebook in ad measurement, ranking, and targeting to amplify its core business," said Josh Constine, tech expert and boss of gadget site TechCrunch.

Poking a hole in that line of thinking is the fact that cryptocurrency transactions are typically recorded in public ledgers, so anyone can see which accounts money is being transferred between. If it's already public knowledge, you really can't blame Facebook for using the information to their benefit.

Also, Facebook front man Mark Zuckerberg is well aware of his company's negative public perception when it comes to spying and intrusion. He believes this could turn away users, and admits that Facebook is making "too many errors" when it comes to user trust. One way he believes Facebook could change this is by adopting what he calls "important counter-trends...like encryption or cryptocurrency." Zuckerberg says these technologies "take power from centralized systems and put it back into people's hands."

If you have run out of "benefit-of-the-doubts" with Facebook, I understand. But it truly doesn't hurt to become informed about Libra and its potential to be your next savvy investment. Crypto has proven it will not go away quietly, and a company like Facebook joining the fray only furthers its credibility.

In astrology, Libras are known to be tactful and great at launching new initiatives. If nothing else, at least you know the stars are on the side of Facebook's new cryptocurrency. Beginning June 18, we'll see whether or not that extends down to Earth as well.


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