Will Facebook Libra Coin Beat Bitcoin To be the Bread & Butter Currency?

Eleven years ago, after the financial crisis which brought about the invention of bitcoin and cryptocurrency,we were told it was going to change the world and free everyone from the grasping demands of greedy manipulative government and banks.

Every post,page and article with bitcoin in the title repeated that.

It will solve all the things the public doesn't like about the present system.The invasion of privacy.The currency manipulation.The transaction costs.

Yes,freedom from interference,and because of the internet and blockchain there's not a thing governments could do.

Legislating against the use of currency other than those approved and controlled by national governments will be side stepped by operating from more accommodating country's courtesy of the world wide web.

It would bring about the system of government predicted in the book - 'Anarchy, State, and Utopia', a 1974 publication by the American political philosopher Robert Nozick.

Nozick argues in favor of a minimal state, "limited to the narrow functions of protection against force, theft, fraud, enforcement of contracts, and so on." When a state takes on more responsibilities than these, Nozick argues, rights will be violated. 

To support the idea of the minimal state, Nozick presents an argument that illustrates how the minimalist state arises naturally from anarchy and how any expansion of state power past this minimalist threshold is unjustified.

At first Bitcoin was seen as the catalyst for that anarchy,but eleven years on and bitcoin and cryptocurrency have still not made the breakthrough of acceptance as a currency for everyday use.

There is a lot of volatile price activity and breakthrough predictions by speculators manipulating prices on the cryptocurrency exchanges,but interest from Mr & Mrs Joe Bloggs for their weekly shop has been there none!

And until that happens then crypto will continue to yo yo as buyers and sellers try to make a fortune betting on up and down price movement.

So why has a giant like Facebook decided to enter the Cryptocurrency jungle with its own Libra Coin?.Going against the advice and warnings of President Trump and financial experts.Very intriguing!

There is a need for a currency less prone to government artificial money creating .

It could be gold - In the case of gold – you can’t just create more of it out of thin air. So if the world’s currencies went back to the gold standard, there would be no more money printing and no “excessive” debt.

In the case of crypto – or more specifically bitcoin – you also can’t just create more of it out of thin air. There will only ever be 21 million bitcoin in existence – with around 4 million thought to be lost forever). So again, no more money printing or “excessive” debt.

But bitcoin has the advantage that it’s a lot more democratic than any other financial system that has come before. Gold is already hoarded by governments, bitcoin is not.

And unlike having a gold-backed currency, bitcoin itself is the currency. You don’t need a whole legal financial system in place to make it work. It works all on its own. That is the point of it.

Bitcoin and crypto in general takes control and power away from the political and financial elite and puts it in the hands of the people.

The political and financial elite didn’t take too kindly to bitcoin when it was invented. It posed a direct threat to the established financial systems and their control.

But they soon realised it was better to grudgingly accommodate crypto than to directly oppose it.

They had seen the changes the internet ushered in, and what happens to industries that face off against superior technology.

And many who are now part of this financial elite got that way through leveraging technology, like PayPal, Uber and Facebook’s upper management.

Ironically,the main idea behind bitcoin is it enables peer to peer transactions.Me paying you, or for goods or services, direct.No need to use third parties like – Banks,PayPal, MasterCard or Visa.

Those third parties couldn’t have that.If they can't beat them,then make their own version.That way they would own and keep the entire network in order and oversee and charge fees for all the transactions – just as they do right now.

But their crypto would go one better than bitcoin. It would overcome crypto’s biggest hurdle – user adoption.

And this is where Facebook comes in, and could be the key to solve the  cause of the Cryptocurrency logjam - little or no everyday use by the world and his wife!

Facebook would deploy this new crypto Libra coin to its 2.3 billion users, giving it instant adoption almost everywhere on the planet.

What advantage does Libra have over any country’s national currency?

Well, the fact that it is controlled by private companies and not a national government. 

But that also may be its downfall?

Within 24 hours of the Libra announcement, political and financial bosses all around the world had decried it:

France’s finance minister Bruno Le Maire proclaimed it to be “out of the question” that Libra “become a sovereign currency”. “It can’t and it must not happen,” he said.

The Bank of England governor, Mark Carney, said: “Anything that works in this world will become instantly systemic and will have to be subject to the highest standards of regulation.”

Markus Ferber, a German member of the European Parliament, said Facebook could become “a shadow bank” and regulators should be on high alert.

While the chairwoman of the House Financial Services Committee “requested” that Facebook “agree to a moratorium on any movement forward on developing a crypto-currency until Congress and regulators have the opportunity to examine these issues and take action.”

And US Senator Sherrod Brown, who sits on the Senate Banking Committee, said: “We cannot allow Facebook to run a risky new crypto-currency out of a Swiss bank account without oversight.”

And the G7 nations are setting up a working group to “evaluate the risks of currencies like Libra,” according to the Financial Times.

The reason there is such an outcry over the Facebook coin launch when there was no such opposition to the JP Morgan announcement of its own cryptocurrency, is JP Morgan is just one bank.

Whereas Facebook's own vast resources are backed by Visa, MasterCard, Uber, Lyft, Spotify, eBay, PayPal and other million dollar companies.

And it also has something else that has the political powers angry – perceived power over their national currencies.

Libra will be pegged to a basket of currencies and assets. Which currencies it includes in this basket and in what proportions will have huge political consequences.

Right now the US dollar is essentially the world’s reserve currency. Well what if Libra really takes off, and becomes commonly used by Facebook’s 2.3 billion customers?

Libra would be a very important currency, and what it is backed by will govern its power to influence!

Imagine if Libra has a big proportion of the Chinese renminbi in its basket. That certainly wouldn’t make the US very happy.

It could be that Facebook’s Libra poses a much bigger threat to the established political and financial order than bitcoin ever has or will!

And Facebook may be making a statement in the choice of Libra as the name of their coin? With the symbol of scales in the Zodiac,it is the sign of justice,balance and harmony.

Is it also the sign of a new order?

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