I think Facebook just created the Facebook of Cryptocurrency. Yes, that would make Bitcoin the Myspace of the crypto world.
Let me explain.
If you haven’t heard, Facebook announced that they will be joining with 100 different partners including companies like Mastercard, Uber and PayPal. I think the best summary from Libra’s whitepaper that explains the currency is in these 3 core points:
It is built on a secure, scalable, and reliable blockchain;
It is backed by a reserve of assets designed to give it intrinsic value;
It is governed by the independent Libra Association tasked with evolving the ecosystem.
Let me quickly explain each point:
1. Libra is built on the same powerful technology that Bitcoin was built on: blockchain. While many have challenged the merits of cryptocurrency, few question the power, security and scale of blockchain technology.
2. The Libra Association will hold a collective of fiat currencies as reserve that will give the “stable coin” (Libra cryptocurrency) base value and stability that differentiates the Libra from most other cryptocurrencies.
3. Facebook will not independently govern the cryptocurrency (nor will any established government system). Libra will be governed by the collective members of the Libra association that will consist of 100 different organizations meaning Facebook will only control 1% of the cryptocurrency.
Here are my initial thoughts:
Libra will work. It will take time, but this will expedite the adoption of cryptocurrency to the masses in a very significant way. The significant development will likely make it easier for companies and organizations to have an effective system for accepting crypto as a form of payment.
Libra will be good for the crypto world as a whole. There are thousands of cryptocurrencies out there and most will die and most should die. Some will thrive and I believe this will lead to great adoption of cryptocurrency as a whole and many of the currencies like Bitcoin, Ethereum, Litecoin and others will ride the back of Libra to much greater global adoption.
Libra will bring greater utility to developers. Currently building on blockchain technologies is challenging for developers. Facebook already has a strong history of supporting developers so I expect that many great utilities will be built on top of Libra’s blockchain infrastructure.
Libra will significantly enhance global transactions. Facebook, along with many other technologies, has condensed our world and Libra will continue to do this making global transactions much easier and more efficient. I have personally been involved in global transactions for years making hundreds of payments through PayPal and Western Union and in the process paid thousands of dollars in fees. Libra will create incredible efficiency in these exchanges and enhance the opportunities around global exchange.
Here are 3 more reasons I think Libra is going to succeed:
Facebook brings the best in technology innovation. Part of Facebook’s success through the years is that they never settled in and they have constantly innovated. Libra will need the same level of constant innovation to succeed. Pair that with the partners they are bringing in with Coinbase, Uber and others there will not be a lack of innovation around this cryptocurrency.
Facebook is not doing this alone. While many claim they don’t trust Facebook with their data, their actions don’t back that up as more people are even more engaged on Facebook and Instagram than ever. They’ve made mistakes and they’re owning them. Even if you don’t fully trust Facebook, they are only 1% stakeholders here. The accountability and support of the other 99% is massive and the trust that comes with the diversity of partnership here is key.
Facebook has learned from 10 years of Crypto History. Bitcoin has been revolutionary in many ways, but there have been bumps in the road. Facebook has been able to watch the journey, learn from the technology and create the best infrastructure for long term success.
So, back to Libra being the Facebook of Cryptocurrency.
Myspace was awesome! We had our Top 8. We could have our favorite music playing on our page. We could design our background and it was truly our own customized space.
Then Facebook came along.
It was, seemingly, Myspace - but boring. It was very plain. No music. No custom backgrounds. But it worked really well. And it got better, all the time. And it hasn’t stopped getting better. And it hasn’t stopped growing.
Bitcoin has set an incredible foundation for cryptocurrency. While Tom was friends with all of us, none of us really know who Satoshi Nakomoto really is. Bitcoin will likely continue to grow on the back of Libra, but I think there are some core flaws (like not even knowing who created it) connected to Bitcoin that will allow Libra to fly by and be the cryptocurrency for the masses. Myspace.com still exists and Tom is doing just fine. It’s just not Facebook. Facebook is the social network that now has almost 3 billion active users. It wouldn’t be what it is without the foundation that Myspace established and I think Bitcoin will serve the same function for Libra.
Time will tell! The exciting part is that it won’t be too much time as Libra is set to launch in 2020!
To learn more about Libra you can go to https://libra.org.
I would also love for you to consider reading Crypto for Good: Demystifying Cryptocurrencies for the Nonprofit Leader. This is a book I co-wrote with my friend, Nick Runyon.