There has been a lot of attention given to Libra in the cryptocurrency community ever since Facebook has announced its plans for the digital coin. On social media and forums people were predicting it would be an on ramp to the new economy, and in conferences and other events people were talking about it as evidence that crypto is going mainstream. Some companies servicing the market have even announced that they are set to incorporate Libra into their current offerings. While the attention is understandable as Facebook is a huge company and its choosing to issue a digital token is a major event, the excitement is misplaced.
Digital currency provides unprecedented abilities to spy on and control what people do, and having that power in the hands of a few people is very dangerous. The Big Tech monopolies of Silicon Valley are building a future where your every action is monitored, and giving Facebook control over what you can and can’t do with your money will be the same level of dystopia as having a politician do the same.
Libra Is The Exact Opposite of a Cryptocurrency Ideal
Cryptocurrency was invented to bring economic freedom to the world and provide people with a way to transfer money without intermediaries that can censor or block them. Libra will most surely be the exact opposite of this ideal. It will be a system for transferring value only between parties that are identified and pre-approved by the controlling bodies. And it may also be far worse than the current banking system.
Facebook makes its money selling your data. Not just your age, gender, and location, but also who you vote for, what causes you support and much more. It invests heavily in big data, artificial intelligence and other technologies to be able to track and commodify your every action on the Internet and in the real world. As its market value and billions in earnings prove, the company is very good at doing this, only second to Google perhaps. No bank in the world can match that. Giving Facebook the power to monitor every financial transfer you make is handing the social media juggernaut an incredibly powerful new tool to exploit you with.
Facebook and Government Are Closer Than You Think
It needs to be clear that the intention of Facebook is not to compete with banks, PayPal or credit cards, but to dominate all financial activities of its users. When payment apps started off in China they were just a way to send money to your contacts, but soon grew to become a universally accepted way to pay for everything and anything across the country. The ease of using a digital system like that is driving out all other payment methods in China, and Facebook will try to emulate that as much as it can in the rest of the world. Unlike the Chinese model however, Libra will not be just a conduit for local currencies, but its own coin backed by fiat.
This presents a direct threat to governments and central banks, and these have responded by putting a lot of pressure on Facebook. The company in reaction has basically said that it will bend over backwards to tailor the system to the desires of politicians in order to get their approval. This means that it will employ its full technological capabilities to make sure that users don’t do anything that the government disapproves of. And that will create a total surveillance system in a way that is not even imaginable for the banks to do.
K Street, the center of Washington, D.C.’s lobbying industry
Facebook has also not been idly waiting for governments to tell it what to do, and has been busy spending money to influence politicians to see things its way. The company is reportedly hiring the services of top lobbyists in Washington D.C., and probably doing the same in other capitals around the world as well. The social media giant is additionally embedding itself with governments by recruiting well connected politicians into its ranks, such as former British Deputy Prime Minister Nick Clegg, who is now Vice-President for Global Affairs and Communications at Facebook. This means that the company can be seen as part of the overall governmental system, not necessarily some free market venture competing fairly and just having to protect itself from government intrusion into its business.
How to Prevent a Total Surveillance Dystopia
The Big Tech monopolies of Silicon Valley are powerful data brokers with an insatiable hunger for all your personal information. Moreover, they use their dominance over mass communication platforms such as Twitter and YouTube to silence voices they disagree with over political questions, or at the behest of governments. If the same standards and tactics will be now be used with the new crypto money Libra, it will mean that they are going to harvest any transaction you make to build a profile of your behavior and desires, and if you stray from the path allowed by those in charge, you will be locked out of access to the system. Therefore, anyone that values economic freedom and privacy needs to avoid Libra like a fire in an oil refinery.
Digital currency can be used to create an undeniable and immutable record of any purchase you ever made if it is tied to your personal identity as Facebook wants. To avoid putting this power in the wrong hands, users need to choose projects created by real crypto developers, such as those of Bitcoin Cash (BCH), which make a deliberate effort to increase the privacy of users.
OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own.