Will Facebook’s Libra stimulate mass adoption of cryptocurrency?

Why I think Libra coin ⚖️ is good for Steem

This post is a review of the Libra Coin Summary in Bloomberg business news June 22nd, 2019 written by Joe Weisenthal, executive editor digital news at Bloomberg. The article is very well done, and here is a small excerpt of what I think are its main points:

For sure: Libra is being touted as a cryptocurrency, so it’s natural to use existing cryptocurrencies like Bitcoin and Ethereum as mental models for what it could be. But it’s probably better to think instead about traditional peer-to-peer payment networks. Whether you’re talking about PayPal, Venmo, Square, WeChat, or even Western Union, all of these networks are in some way layered on top of the traditional financial system in order to ease some type of transaction (e-commerce, check-splitting, remittances). The problem is that these networks aren’t interoperable, and in many cases the fees can be quite high. Like all these other networks, Libra will be layered on top of the an existing financial system. But unlike these other networks, however, there is an opportunity to create payments unification on a global scale, and at a much lower cost. And in theory, anyone will one be able to build payment applications on top of Libra. Some might focus on friends splitting the cost of dinner. Others might be focused on remittance payments to developing markets. In the most extremely successful version of Libra, it’s not so much a cryptocurrency, but a global operating system for moving fiat money around.<

Source

This summary describes the Facebook’s Libra more as peer to peer payment network like PayPal instead of a cryptocurrency because, as it’s described, it’s mainly a way to move fiat from point A to point B, or more specifically person A to person B, anywhere in the world, in minutes, cheaply and with complete disregard for all banking or currency laws. Think about that for a few minutes and how big that really is as a concept. We here at Steem already move wealth from Japan to America in minutes for free! And we don’t give it a second thought. But to the non-crypto world that would be Amazing! I routinely wait 3-5 business days to move fiat and I pay hefty fees.

I personally agree that the main attribute of Libra is to move fiat around. I see it as a brilliant attempt to use the advantages of the blockchain to allow people to transfer fiat around the globe cheaper and quicker then the existing banking system allows. And because it’s fiat to crypto at point A and crypto to fiat at point B the transaction could completely ignore fiat transfer laws and limits. So in this interpretation, which I agree with and add my personal caveats to, the Facebook Libra is more of a threat to the current banking system then it is to cryptocurrency in general and Bitcoin in particular.

I think this interpretation also leaves the door open to the Facebook Libra to be the celebrity that makes the world want to learn about cryptocurrency. Libra could turn out to be the biggest cause of mass adoption of cryptocurrency in cryptocurrency history. Facebook wants to start Libra in India, a country with very low use of banks and great needs to store and transfer fiat. Libra would be perfect for that country with large numbers of people distrustful of banks. The Indian users of Facebook represent a fraction of the 2.4 billion people on Facebook, who would all suddenly be using a blockchain. The contrasts between PayPal, Western Union and standard Bank transfers and a blockchain transfer will become known. Plus the restrictions the central or traditional banking system places on them will become known. Finally, when they learn the restrictions that Libra puts on them, are not present in other crypto’s the genie will be out of the bottle. A certain portion are going to look for less centralized alternatives. This may be a big motivation for people to want to buy Bitcoin. But since Bitcoin is 12,000 USD now, they will probably look towards something cheaper and something similar to Facebook which has a cryptocurrency. Hmmm 🤔🤔 Who would that be? Well Steem of course! That’s why I am excited about Libra.

✍️ by Shortsegments