Facebook acting like country -- not company... Libra Cryptocurrency Betrays True Ambitions
Facebook’s Libra Cryptocurrency Betrays the Company’s True
Ambitions
·
06.26.19 08:00 am
It’s not perfect: Sometimes there’s crime, or that
one neighbor who keeps pushing the conspiracy theories
about vaccines or politics. You feel like the security teams
are getting a little better
at handling those kinds of disruptions, and after all, every place has
potholes, right? Or maybe you’re just getting used to it. But lately it seems
like if people step too far out of line, they just sort of … disappear.
And
as the place has gotten bigger, it’s matured. Now you can move yourself into
more of a gated community
to avoid the bad neighborhoods and the undesirable encounters. And that’s nice,
because every day it seems like there’s a new infrastructure project
designed to get more people into the place.
You
know the leadership of the place isn’t perfect, and it’s not like you trust everything they’re
doing, but you’re comfortable here, and so you stay. And you have to
admit, the shopping has
gotten a lot better. So many more stores and places to visit, it’s almost like you
never have to go anywhere else.
And
the best part is that the place finally got its own money!
Talk about a milestone. It’s like your little digital home is finally turning
into its own … country.
Yes,
you guessed it, I’m talking about Facebook. And what I’m guessing is that this is exactly what Facebook wants to be. Not a
company, a country.
And while Facebook’s ambitions appear unsubtle (at least to me), the biggest
tech companies are all building more and more advanced and immersive
ecosystems. So maybe it’s time to start asking: What is the functional difference between a company and a country?
It’s
not a crazy question: We’re already at a point where huge multinational tech
monopsonies have so much power over the global economy that central bankers and
regulators are starting to wonder
if they even have the tools to set economic policy, like they used to in the
old days.
And
the reason these big tech companies are different from other giant
multinational corporations like Exxon Mobile or ConAgra or even, strangely, Microsoft is
that their ambition really is to own all your interactions, not just your
driving or your eating or your typing.
Amazon’s algorithms
are setting prices for the rest of the world and there’s no business it doesn’t
want to be in. Apple is less interested in being a big messy country that’s
open to everyone, but would be happy to build an increasingly elite country
club on the hill. Much like the NSA, Google would prefer that you forget they
exist while they’re watching every single thing you do.
Oh, and these companies happen to
boast user populations larger than any single country, not to mention the fact
that they have annual revenues far exceeding many countries’ GDP dreams.
And now they want to create their own money.
Facebook’s
proposal for Libra, a
cryptocurrency backed by a basket of real currencies, and controlled by an
independent body of partners based in Switzerland, might seem a step or two removed from being under Facebook’s control. But the
power of Libra doesn’t lie in control as much as it lies in adoption.
Libra
is meant to become the in-house currency for Facebook, Instagram, and
WhatsApp’s combined 2.7 billion users. If that happens, it’ll create, almost
overnight, a borderless collection of millions, maybe hundreds of millions,
maybe even a billion or more people using the same platform to communicate, the
same tools to shop and view ads and play games, and the same monetary system.
It’s a network effect with the potential to remake global currency
and financial systems.
And
whether Libra is controlled by a neutral Switzerland-based consortium or not,
if its primary adoption happens on Facebook, it’ll only centralize power with Facebook.
Now,
yes, there’s a big “if” at the center of all of this speculation about
Facebook’s metanational ambitions.
That’s “if” Libra will get off the ground at all. Facebook could screw it up
and fail to get enough partners on board to actually launch the thing. (There
are 27 impressive names
on board already, but 100 is the goal.) And because of the company’s many, many
missteps over the years, Libra is already freaking people out—from
actual lawmakers to central bankers.
It’s going to be a fight.
But never say never, because you can’t think the Facebook team didn’t
anticipate some static, here. The company doesn’t usually back down from an
unpopular decision—it just apologizes later!
So
let’s imagine that Libra does get off the ground. What’s its biggest
competition? Hint: it’s not Bitcoin. Let’s start with the dollar—arguably the
most powerful currency in the world. About 350 million people
use the dollar around the world. That’s a little under 13 percent of Facebook’s
claimed 2.7 billion users (across all three platforms), so even accounting for
duplicates, fake accounts, and rounding errors, Libra could be used by more
people—if not actual amount spent—than the dollar, and without a whole lot of
sweat from Facebook.
Not
buying it? Here’s an example of anemic adoption on Facebook. The company introduced Stories on Facebook in
January 2017, and the feature was derided as a direct Snapchat ripoff that was
so poorly implemented and confusing as to be laughable. By fall of 2018, over
300 million people were using Stories.
Boom. Dollar.
The
likelihood of Libra’s adoption is even higher because the company’s fastest
growth is international, and Libra is likely to be the most useful in countries
where the local currency is hyperinflated or banking is unreliable. Think of
the 170 million Facebook
users in Africa, many of whom already bank and transact on mobile
phones. It’s an easy sell.
And if Libra starts big, the
network effects of the Facebook platform will ensure that it just keeps getting
bigger.
Then what?
Over time, it’ll end up being
easier to pay for things with Libra than with any other method. It might become
trivially easy to exchange Libra for other currencies, if people even need to.
It’ll remove barriers to sending remittances to other countries or
international payments of almost any type.
Facebook
will profit handsomely, of course, as will its big corporate partner-investors,
like Visa, Mastercard, PayPal, Spotify, and Uber. They’ll end up in the
unexpected position of being corporate central bankers, of a sort. And most
significantly, the bulk of Libra users will be in what is essentially a closed
network under the complete control of one CEO-slash-“emperor for life.”
At
that point, there’s every possibility that Google or Amazon or even Apple will
decide they need competing currencies for their private ecosystems (all three
have rolled out some kind of payment options, if not their own fiat currencies,
and there’s been speculation for at least a year that Amazon could launch a cryptocurrency).
Who needs the lira?
You can see why bankers and
government officials have the big-time jitters. These are government-level
ambitions, by any measure.
Because although it may seem naive
to ask if a company can really be as powerful as a country (the primary
difference being, you know, the guns), in the case of Facebook, you have to
admit, becoming a borderless pseudo-state seems to be the goal.
Facebook co-founder Chris Hughes
is already raising the specter
of Libra destabilizing weak government currencies, and rendering central
bankers helpless to set their own monetary policy in some of those countries.
And he’s a guy who understands Mark Zuckerberg’s ambitions better than most.
Zuckerberg
is famously enamored of Augustus Caesar,
and over the years, his vision of what he’d like to accomplish has clearly
grown from chick-hunting the college population to creating a service and a
“community” that has no boundary, no limiting factors, and hardly any
oversight.
So
let’s recap: Facebook has a massive stateless citizenry; a small, hand-picked
ruling body; rapidly expanding
infrastructure; and now, adoption willing, a unified currency. Also,
if you really wanted to create your own borderless country, wouldn’t you
eventually incorporate virtual reality, so people could literally live their
lives inside your digital ecosystem, even if only via headset? We keep
forgetting that Facebook owns Oculus, don’t we?
Introducing Libra right now shows
us incontrovertibly that Zuckerberg’s ambitions have not even remotely dimmed.
This guy is still right on plan for global domination. The only thing that’s
missing is space—thank god for us that he shows no interest in the burgeoning
tech bro space race.
Or
maybe he’s already done a bit of inter-metanational diplomacy, and he and Jeff Bezos
worked out a deal.
Zuckerberg gets the Earth, and Bezos gets the moon.
Comments
Post a Comment