Internet
users mostly have Facebook accounts, but people who have Facebook accounts are
unlikely to trust Facebook too much. This social media giant is now telling you
that they are going to launch a new cryptocurrency – Libra next year, would you
trust it? With your money?
Libra,
managed by the Libra Association, will be a new digital currency that users can
access online for payment or sending money. It uses strong cryptography to
secure financial transactions, control the creation of additional units and
verify the transfer of assets. The Libra Association, is a 28-partner
consortium of companies and foundations, including eBay, Visa, Mastercard,
PayPal and several venture capitalist firms and cryptocurrency companies. Their
goal is to make their cryptocurrency a simple global currency and financial
infrastructure that empowers billions of people, especially those who don’t have
a bank account, or wish to avoid high international transaction fees. Facebook
has created a subsidiary called Calibra to ensure separation between social and
financial data and to build and operate services on its behalf on top of the
Libra network.
Before
asking yourself whether you can trust Libra, think about why would Facebook and
the other members want you to use it? Nick Douglas from Lifehacker has concluded
four reasons why: -
1.
To keep you as a customer
Since
not everyone has a credit card/online banking account, businesses can attract
more customers with Libra. Moreover, they can swap customers with other
partners by offering promotions through Libra, like what digital wallets in
Malaysia always did.
2.
To save money
Credit
card charges transaction fee. Hence, businesses can save money by using Libra,
as it charges lesser than credit cards.
3.
To track your purchases
Libra
could track our purchasing behaviour to make better advertising. Although it
promises not to share our specific data, we all know that Facebook had admitted
sharing users’ data with many tech companies, and also involved in the
Cambridge Analytica scandal in early 2018.
In
Calibra’s “customer commitment” document, it’s already carved out some ways it
can share data, like anonymized data for research and aggregated data for
Facebook, and police requests.
4.
To sell you more services
Facebook’s
Calibra will build more financial services on top of Libra, according to
Calibra. They might offer lines of credit, for example.
If
you don’t mind receiving those ads or promotions that probably would make you
to spend more, you can of course give it a try. But remember that Libra is
different from Bitcoin, you should not buy it because you think its value will
shoot up in the future. Its value is tied to government-issued currency (e.g.
dollar). You buy it for the ease of payment, where you can send money overseas
with a lower cost, even directly through Facebook’s Messenger or WhatsApp.
Reference:
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