George McDonaugh is CEO and co-founder of KR1 plc, a London listed cryptocurrency and blockchain investment company.
Facebook is creating its own cryptocurrency – something that even those of us necking the crypto Kool Aid back in the early bitcoin days never in our wildest dreams thought would happen.
The details are emerging, but what we do know is that the asset will be called Libra, it will be a “stablecoin” (i.e. backed by a basket of assets in order to prevent it from being volatile) and there are so far 28 confirmed ‘validators.‘ The cost to be a validator is $10 million (US dollar) each, there’s a foundation in Switzerland and Facebook has stated that their main focus is to help facilitate payments across the developing world.
Facebook is essentially trying to create a stable medium of exchange that can be used for making payments across its networks and therefore across borders. Think the current functionality of WeChat, Venmo and PayPal but instead of transacting pounds and dollars, users will be transacting in Facebook’s Libra.
Let’s cut to the chase, Facebook (and Libra’s supporting corporations which include eBay, Visa, Uber and PayPal) are doing this for one reason and that’s data. It will be spun as banking the unbanked, revolutionizing payments and connecting the world, but don’t be fooled, this move into the murky world of cryptocurrency is about tapping new wells of data, the modern day oil.
No doubt there’ll be plenty of assertions over privacy protection and ‘decentralized’ hand waving, but this is all about Facebook enriching its reservoirs of data, knowing who you are (for real),