Dear Non-Crypto Friend,
You may have heard of Bitcoin – you may even have considered using it as a means of payment, or investing some money in it with the hope that it might rise in value, like a stock. Bitcoin is a cryptocurrency – a digital asset that exists on an immutable ledger, open to all and completely transparent.
And perhaps you decided to pass on Bitcoin for now, until the technology was more mature, or easier to access, or for a dozen other valid reasons.
You may also have witnessed a barrage of attacks on Bitcoin and other cryptocurrencies, particularly after a bubble formed in 2017 that created artificial and unsustainable value for a few (many in the media are currently describing Beyond Meat’s stock in similar ways).
For example, JPMorgan CEO Jamie Dimon described Bitcoin as a ‘fraud’ and Facebook banned cryptocurrency advertising. Now both companies are creating their own cryptocurrencies.
Anything But Libra
In this letter we will focus on Facebook’s new project, something they have been working on in secret for over a year.
They are calling it Libra.
Facebook’s version of Libra represents neither of these concepts. But it’s clever marketing.
We’re writing to urge you to resist the ‘convenience’ Facebook will likely offer you in using their Libra cryptocurrency, and to consider the benefits of decentralization.
Payment Processors Join Forces With Facebook To Control, Tax, And Monitor Your Spending
MasterCard, Visa, and PayPal have joined forces with Facebook, and are said to be backing the new Libra cryptocurrency to the tune of $10 million each.
You know those companies well: they have been taxing the global economy, and a large proportion of consumer spending, to the tune of about three percent for the past 30-odd years.
Visa and MasterCard process the bulk of credit card transactions worldwide. In 2018, for instance, there were 2.4 billion MasterCard-branded debit and credit cards in existence generating revenue of $14.95 billion.
As recently as January this year, plans were uncovered by the Wall Street Journal that the behemoths in this industry were considering raising transaction fees. Meanwhile PayPal whacks the average merchant with a 2.9 percent fee plus thirty cents per transaction.
In other words, virtually everything you buy has a pricing premium in-built: a tax of three percent or so, that goes to sustaining these businesses. If your government was to raise your tax rate by three percent, you’d protest with your vote.
In this case, you finally HAVE a vote, and we urge you to use it.
Facebook Sells, Leaks, And Controls Your Data
Forget what Mark Zuckerberg says. From the Cambridge Analytica scandal to the data breach of 50 million users late last year, Facebook’s interest in you is not personal, and he is not sorry. His business is your data, which his company abuses and misuses repeatedly.
Your data, your life, your photos, your friends, your face, your family, your dog, your location, your sexuality, your ethnicity, your ‘secret crush’ – Facebook knows it all, and sells it to the highest bidder.
At the risk of echoing a dystopian undercurrent of fear that pervades our surveillance society, we encourage you to consider whether this is healthy – and whether adding your purchase information into that equation provides more, or less, safety for you and for our society.
Because the way you spend, when aggregated with the rest of the data that Big Tech companies already own, provides an even fuller picture of who you are, what you do, where you go, and what you might do next. Remember – Facebook literally, quite literally, already knows you better than you know yourself. It has been used to predict a depression diagnosis with 70% accuracy – before any visit to a doctor.
Facebook is not necessarily evil: but nor does it exhibit the presence of a moral compass. Its platform has been used to propagate information, much of it false, that has led to ethnic cleansing, murder, suicide, cyber-bullying, interference in national elections. Facebook’s responses to these events has been to prevaricate, to excuse itself, to refuse to acknowledge its responsibility for their existence – and when overwhelmed with evidence, to issue meek apologies.
Facebook is a private company. You agree to its terms of service when you use its platform, and you have very few rights to privacy in exchange for the ‘convenience’ it provides. Your right to free speech, if you are in the USA, is a constitutional right – it does not extend to private companies, and they are under no obligation to grant it, nor to curtail it.
The likelihood of Facebook changing its business model as it adopts a cryptocurrency seems low. Trust is earned, and Facebook is in debt.
Decentralization Is Your Friend
At the heart of cryptocurrencies and much of the blockchain technology behind them is the concept of ‘decentralization’.
Decentralization is a movement: it is a conscious effort by some people across the globe to reduce the control that certain organizations, such as banks and technology companies, exert over our lives. (We’re discussing private businesses, although governments are also often criticized too – but that’s a different argument.)
In truth, decentralization is a dream, an ideal. It is neither practical, likely, nor even desirable that we will realize a fully-decentralized existence. But a degree of control over our own data, our own identities, and who has access to our experiences is – many of us believe – a fundamental human right.
Truly decentralized blockchains, like Bitcoin’s, are controlled by no single person or entity.
Users are in control of what they spend, with whom, and on what. The miners that work to keep the network running smoothly do receive a transaction fee for doing so.
It is minuscule in comparison to that imposed by Visa, MasterCard, and PayPal.
Legacy payment processors have joined forces with Facebook to co-opt the cryptocurrency movement and keep control in the hands of the global conglomerates that have been selling your data and taking your money for years.
Libra will be a centralized cryptocurrency, despite efforts to involve stakeholders such as other payment companies – which is likely a ploy to avoid the regulatory issues that have plagued the cryptocurrency industry to date.
Facebook will be in control of your money, and it will use and share your data according to its own agenda.
In many ways, Libra is a declaration of war on decentralization. We have a clear choice: resist centrally controlled cryptocurrencies, or roll over and accept our fate as pawns in the great game of jurisdiction over our data. And our money.
The only true ally you have in the future is your freedom.
And decentralization equals freedom.