Facebook’s Libra project is late to the party, and the party’s already been mostly shut down by law enforcement. Nearly everything in the 11-page white paper released yesterday by the company—well, by the 28-strong member “Libra Association” forged under cover of darkness to govern the project—about its forthcoming not-stablecoin (per a correction issued to Decrypt) calls to mind the trappings of the mostly idiotic ICOs of circa 2015–2018, and the only innovation present is that, this time, it’s Facebook doing it.
Case in point: take a look at this quote from the Libra white paper:
Whoops, sorry! That’s from the white paper for Zulu Republic, a borderless world currency or something that came to nothing. This one is from Libra:
As Libra does with many ICOs, the two share a host of eery similarities. Both projects plan (or, in Zulu’s case, planned) to issue a somewhat decentralized currency—Zulu and Libra respectively—to “bank” a group of people apparently underserved by the old-school financial system. Both were/are based in Switzerland. Both have introduced proprietary digital wallets to onboard consumers: in Facebook’s case, users will interface with the currency through a proprietary wallet, Calibra; Zulu’s wallet was called Zulu Pay.
There’s only one, trivial difference: Zulu (“ZTX”) has a $0 market cap, while Facebook is worth billions of dollars and has 2.7 billion monthly annual users.
That’s why Facebook’s bold-but-fairly-rote crypto project warranted wall-to-wall press coverage that kept brow-beaten reporters up all night parsing 47-page technical specs. Even though the previous manifestations of save-the-world crypto insanity have been uncannily similar, only when peddled by Facebook do these ideas attain any media currency.
So here’s a prediction: It will either turn out that blockchain pipe dreams are actually feasible, but were in dire need of an established heavyweight to nudge them into the mainstream—in which case, Facebook will kindly take up the mantle of fulfilling the dream (semi) single-handedly, not so much levelling the playing field as obliterating it. The shitcoins, whose clout mostly derived from pump and dump Telegram groups anyway, will fall by the wayside because they have nothing to offer that Facebook can't do with several hundred thousand times the marketing budget.
Or: Facebook’s project will collapse in a hail of governance, regulatory and performance issues, and it will be clear that if a Facebook-led attempt to appropriate the technology can’t make it work—the usual measure of a Silicon Valley idea’s worth—then nothing will, and everybody will go back to iterating on the many, many global payment systems that currently work and are already being used with great success. Cough, Mpesa.
So far, odds look good on that second scenario. Impressively, lawmakers already seem to hate the mostly non-existent project, and one US senator has already tried to pre-emptively ban it. Indeed, as predicted, Facebook is doing a great job at spurring regulatory clarity in the industry—alas, in the direction of "ban this and jail everyone involved." It took the rest of the crypto industrial-complex years to elicit such a thoughtful response.
But maybe there’s a third option. Maybe the technology is bad, but Facebook, being Facebook, will still make it immensely popular. If anyone can make a dumb idea go big—say, turning bad privacy practises into a billion dollar industry, or delegating content moderation to a psychologically broken army of newly alt-right conspiracy theorists—it’s Zuckerberg, right?
We come across big, successful, awful innovations all the time. Just look at Facebook.