Facebook co-founder warns against Libra cryptocurrency | Technology
One of Facebook's co-founders has warned the social networking plans for a digital currency called Libra may allow companies involved in the scheme to power the nation states.
Chris Hughes, who has the role of Facebook's early days, gave him a net worth of $ 430 million, the global regulators say to intervene to slow down the progress of cryptocurrency.
Facebook is developing Libra from a base in Switzerland, in collaboration with 27 other companies ̵[ads1]1; including Mastercard, Paypal, Uber and Vodafone – collectively known as the Libra Association.
What is Libra?
Facebook says Libra is a "global currency and financial infrastructure" – a digital resource built by Facebook and powered by a new Facebook-created version of blockchain, the encrypted technology used by bitcoin and other cryptocurrencies. The name Libra comes from the basic Roman weight measurement. The pound abbreviation lb is derived from Libra, and the £ symbol originally comes from an ornate L in Libra.
Why does Facebook start a crypto competition?
Facebook claims it wants to reach the 1.7 billion people around the world who do not have access to a bank account.
Who is responsible for Libra?
Facebook is likely to run into regulatory obstacles and antitrust problems. The currency will be served by a collective of companies called the "Libra Association". It acts as what is called "stablecoin", linked to existing assets such as dollars or euros, with the aim of making it less subject to the volatility that many cryptographic values experience.
The Libra Association is described by Facebook as an independent, not-for-profit organization based in Switzerland. Within the Libra Association will be a governing body called the Libra Association Council, consisting of a representative of each member of the Association, who will vote on political and operational decisions.
Facebook claims that while it created the Libra Association and Libra Blockchain, when the currency is launched in 2020, the company will withdraw from a leading role and all members of the association will have equal votes in the governance of Libra. Companies that contributed at least $ 10 million to be listed as the founders of the Libra Association include technical companies such as PayPal, Ebay, Spotify, Uber and Lyft, as well as financial and venture capital firms such as Andreessen Horowitz, Thrive Capital, Visa and Mastercard.
How and when can I use it?
When cryptocurrency launches, users can download Calibra, a digital wallet that lets them send it to anyone with a smartphone. It will be available in Messenger, WhatsApp and as a standalone app.
It's not clear which countries the coin will launch in the first, although Facebook said "almost anyone" in the world with a smartphone, will be able to download the app. 19659002] Kari Paul in San Francisco
"If even modestly successful, Libra would surrender much of the control of monetary policy from central banks to these private companies," said Hughes, a co-chair of the Economic Security Project, a campaign against poverty. "If global regulators do not act now, it may soon be too late."
Mark Carney, Governor of the Bank of England, gave a cautious welcome to Libra in his speech at the annual Mansion House dinner on Thursday night.
But in an article for the Financial Times, Hughes said the companies involved in the Libra Association, each of which put $ 10 million in the project, could "disturb and weaken" the nations.
He warned that if enough people in emerging economies trade local currency for Libra, it will threaten government's ability to manage their fiscal policies. Emerging Markets should temporarily ban local banks and payment processors who accept the currency until the implications are considered, Hughes says.
"Which Libra backers call" decentralization "is truly a shift from the developing world central banks to multinational corporations and the US central bank and the European Central Bank, he said.
Hughes added that if libra is successful, Facebook and its partners unfortunately weaken the development of crucial global technology, such as identifying verification, as well as effectively writing the rules on issues such as privacy and theft.
He said someone who believed his fear was overblown should consider how Facebook has had a large, sometimes negative, effect on other lifestyles.
"The company's decision to offer live broadcasting made it possible for teenagers to strive for bullying, terrorists to cast an execution and a shooting man a mass shooting," Hughes said.
"It has also transformed mobile messaging and news and journalism faster than many imagined."
The caretaker has approached Facebook for comment. [19659028]
