If you trust Zuckerberg, it’s worth remembering that he thinks you are “dumb fucks. ” He’s apologized for this exchange, but I have to say, in light of how Facebook has treated privacy, I think he’s mostly just sorry we know about it. “They’ve sort of hand-waved around the idea that their business model isn’t rooted in user data, but I can’t imagine that there isn’t an interest there,” Swartz says.
That’s because if you spend mostly Libra, perhaps because you buy most things online, you’ll only convert your Libras into dollars for when you need to spend IRL money, and the dollar will begin to seem annoying to you since it keeps moving up and down relative to the Libra. “The goal is for Libra to be more useful than any national currency, accepted in more places and with fewer complications; pegging it to a single national currency would only hold it back,” Levine writes.
On the other hand, Libra is assigned to pseudonymous “wallets,” and transfers are done through public key operations, says Nicholas Weaver, a researcher at the International Computer Science Institute and a lecturer in the computer science department at the University of California, Berkeley. “So yes,” he told me, “it is a cryptocurrency. ” Weaver also notes that the permissioned model means less computing power is needed.
So far, how Libra will deal with those laws is kind of vague. “They’re doing a weird dance between like, oh, we’re kind of going to be light on KYC and super inclusive, but also we’re going to be really by the book regulatory,” Swartz says. “They’re seeming to play it both ways. But that’s not all. There’s also the IRS.
So I chatted with some experts to find out whether Libra is a cryptocurrency. “It’s fair enough to say this uses cryptocurrency technology,” says Matthew Green, an associate professor of computer science at Johns Hopkins University. (Facebook contacted Green “a few weeks ago” and asked him if he’d look at its white paper as an outside reviewer.
So maybe that’s the answer: Starbucks launches StarBucks, its own branded cryptocurrency, and it just massacres Libra because we like and trust Starbucks, and we don’t like or trust Facebook.
So if Libra is a cryptocurrency — and, again, it does kind of seem to be one — it’s classed by the IRS as a commodity, like pork bellies or gold.
That makes it more like a digital currency rather than a cryptocurrency, says Lana Swartz, an assistant professor of media studies at the University of Virginia who’s studied the bitcoin community extensively. “I actually agree with the folks who’ve been saying that this actually isn’t really a cryptocurrency at all,” Swartz says.
Bitcoin is exactly as valuable as people believe bitcoin is, which makes it very, very volatile. “The goal is for Libra to be more useful than any national currency, accepted in more places and with fewer complications; pegging it to a single national currency would only hold it back.
Unlike previous blockchains, which view the blockchain as a collection of blocks of transactions, the Libra Blockchain is a single data structure that records the history of transactions and states over time.
But an easily accessible cryptocurrency — one that has privacy protections that keep everyone from seeing who you send money to — makes it way easier to pay for illegal drugs online. “I like to say that cryptocurrency has committed a crime against me,” Weaver says. “It has made me believe in the need for rigorous enforcement of money laundering laws. Rep.
Levine is great here, too, so I am going to paraphrase him again: if Libra does catch on, it’s likely to displace currencies like the dollar.
In order to securely store transactions, data on the Libra Blockchain is protected by Merkle trees, a data structure used by other blockchains that enables the detection of any changes to existing data.
When we spoke on the phone, Weaver told me that true financial privacy is “a vehicle for bad outcomes. ” What you want is a company that doesn’t allow privacy but is good at protecting your data. “And since Facebook is notorious for misusing data, the notion of giving Facebook insight into a whole bunch of financial transactions is just flat out disturbing.
By contrast, the governing members of Libra will be setting some kind of policy by picking the basket of investments used for the reserve. (They have said: “The association does not set monetary policy.
What’s even more interesting is the sentence that starts “Unlike previous blockchains… ” If the Libra Blockchain isn’t using blocks for transactions, is it even a blockchain?
Maxine Waters (D-CA), the chairwoman of the House Finance Committee, is asking House leadership to join her in demanding that Facebook halt Libra’s development until Congress reviews Libra, Bloomberg has reported. Sen.
The only conclusion I have come to is that there is no stable definition of “cryptocurrency,” so I am going to just call Libra a cryptocurrency for the sake of ease and keep it moving.
While there is a Libra Reserve, Libra doesn’t seem like it’s necessarily pegged to its value.
So any interest from Libra will go primarily to Libra and then to early Libra investors like… Facebook. Isn’t that fun!
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