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Is Libra a Real Threat to Top Cryptocurrencies?

Mary Callahan Jul 18, 2019
Facebook has been kind of secretive for the past months about their cryptocurrency. The entire industry has been waiting for the blockchain project that Zuckerberg and his team are up to. Some people have been watching every step they take and gathered all the possible information about it.
About a week ago, the social media giant surprised us all by publishing a whitepaper that discussed the cryptocurrency project called Libra. Everyone was left in shock as the project was quite ambitious and offered the “one cryptocurrency for the entire world” idea.
The community is now heavily divided when it comes to Libra. People are getting pretty loud and making quite a hype about it. Some are very hopeful and see a bright future for Libra, while others are deeming it threat to all the other cryptocurrencies including Bitcoin.
So, who’s in the right? Will we see Libra coming to the most  popular cryptocurrency exchanges anytime soon?

Facebook Has a Vast User Base

Facebook is, undoubtedly, the biggest online social medium at the moment, with more than 2.7 billion users. In other words, they already have users who might be interested in adopting Libra and have a head start, in comparison to other cryptocurrencies, especially the new ones.
However, many people don’t trust Facebook, especially after the whole data breach thing when Zuckerberg had to appear before Congress. Data is Facebook’s main firepower, and that is a well-known secret.
Facebook has always been about data only, and now its owners decided to enter the finance game. This is both a terrifying and an inspiring thing though, depending on whether you support Facebook’s business model or not.

What is Libra Actually?

So, what else is so different about Libra apart from the fact that it will be created by Facebook? Just like some other initiatives started by Facebook, this one also has its aims set high.

According to Zuckerberg’s status update on his official FB page, the mission of Libra is to create a simple "global financial infrastructure”.
What makes it essentially a cryptocurrency is that it is based on blockchain technology, much like other digital currencies such as Bitcoin or Ether.
Zuckerberg states that there are almost a billion people who are unbanked at the moment, and Libra has the potential to bring financial services to them by making money transfer much easier and safer.
Those who don’t have bank accounts but do have mobile phones will be able to send and receive money using apps such as the ones many people have for their Bitcoin and Ether – the so-called crypto wallets.
Therefore, Facebook aims to exclude banks and other intermediaries that slowed down the entire process and make a decentralized cryptocurrency that will feature low fees and fast transactions that are secured by cryptography.
So far, so good – but if you are informed about the cryptocurrency industry, you haven’t heard anything new, have you? The thing is – there is nothing revolutionary here actually, except the fact that Facebook is a huge name. It’s not just another ICO waiting for investors to jump-start their mission and put things into motion.
The big players have stepped in and they are about to change the rules of this game. Or not?

The Libra Association

Facebook is the leader of the Libra project, but it is supported by various other big companies, including MasterCard, PayPal, Visa, Stripe, and more. Furthermore, services such as Spotify, Lyft, eBay and others also joined the cause. The social medium hopes to create the so-called Libra Association which will have 100 co-founding members.
Many blockchain enthusiasts and experts are divided here as well. Some believe that the big players are finally taking initiative and stepping into the cryptocurrency space. While others simply think that the big companies are playing yet another game to harvest users’ data and further control the digital world.
While it is true that Facebook could make the entire cryptocurrency centralized rather than decentralized, many people don’t actually deem that a bad idea. Therefore, a sort of debate has been raging on the web for the past few days on Facebook’s role in the Libra project and (hidden) benefit.
Many see it as a problem, because blockchain has been, at its core, a disruptive technology that would put an end to a centralized organization which is actually represented by Facebook itself.

Facebook Credits Failure

Facebook doesn’t really have a successful history when it comes to financial projects such as Libra. They had a sort of digital money back in 2011 called Facebook Credits. The project had huge potential, but eventually became unimportant as users failed to adopt the entire idea of programmable money.
In addition to Credits, Facebook also had a couple of other world-changing projects such as Internet.org that are now forgotten and abandoned due to various complications.

To Sum It Up

Facebook is making a huge step forward, and we still don’t know what shall happen with its Libra project at this point. Although it has the ultimate goal to bring the world closer together under a single currency, Libra has a couple of downsides that could have terrible consequences.
Therefore, it is up to us to wait and hope that this won’t be a fiasco as some other FB projects. Even if it sees daylight, we need to keep it under a close watch and see if Facebook will abuse Libra in some way that may be harmful for users. Let us not make any predictions before the actual project is released!
Whether Libra would become a threat to top cryptocurrencies – no one can really know. But it seems Bitcoin and a few top altcoins are doing well at the moment. In fact, price of Bitcoin has been going up for last couple of days, breaching the $11,000 ceiling.

Some people believe Libra has something to do with it, however some professionals disagree.