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Experts are concerned Libra could people’s privacy and security at risk

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One of the most concerning things to come from Facebook’s cryptocurrency reveal is the number of traditional finance players who are supporting it. These are many of the same people who shunned Bitcoin, and other cryptos, and still shun them. In light of the hype surrounding Facebook’s new “Libra” cryptocurrency, it’s important to pause and be just as critical of it as other cryptos.

Examining Facebook’s Libra without the hype

The overall concern raised by observers of Facebook’s cryptocurrency stem from the social media company’s disconcerting past. Facebook has had to disclose several breaches that resulted in its subscribers’ private information being disclosed.

In addition, there are many other potential pitfalls that should be kept in mind about Facebook’s newfangled crypto effort.

Saving the world of the underbanked and unbanked

Facebook has long touted itself as “bringing the world together.” This cryptocurrency is being touted as a means to help those who do not have access to traditional banks.

However, there are questions. For example, Alex Gordon-Brander of Omega One, said he was not sure if Libra is a savior for the underbanked or non-banked. It is a savior for those who have already invested time and energy in some aspect of cryptocurrency, he said.

“The FB announcement and efforts—including its high-end backers—legitimize digital currencies.  Yes, there will still be skepticism about various currencies and the dark underbelly of this industry, but companies and the financial community will figure out ways to leverage Libra and other worthy currencies for the same reasons other assets are traded daily.”

How Facebook handles security threats will be crucial

Tech entrepreneur Hector Hoyos, the founder of Hoyos Integrity, spoke about the potential threats Facebook’s cryptocurrency will face. For example, he said he worries about anti-money laundering (AML) and know your customer (KYC) issues that Facebook could overlook.

Additionally, given the likelihood of hacking, Facebook’s attention to its digital wallet is flawed, putting consumers in the Facebook ecosystem at substantial risk, Hoyos said.

Observers have also noted that Facebook may not have the backend to support the crypto platform they’ve been touting.

Will Facebook be able to secure people’s trust?

Steven Elisc, executive VP of Corporate Development at DMG Blockchain, said he expects Facebook’s privacy concerns to remain at the forefront. He said:

“Just as Alipay and WeChat Pay are vehicles to potentially allow the Chinese government to monitor the transactions of its citizens, in a similar way, Facebook could allow transaction data to be used in a way that invades user privacy. Given ongoing news about Facebook in this regard, we expect this.”

Effects on Bitcoin and other cryptocurrencies

Avani Desai, is president of a security and privacy compliance assessor called Schellman & Company. Desai joined many others in saying that Facebook’s crypto could be the catalyst for mass adoption of cryptos, pushing them to the next level. She pointed out:

“Up until now, we haven’t seen institutional cash come into play due to regulations and, in my humble opinion, fear of the unknown. But Facebook’s Libra will give digital currencies a level of legitimacy and acceptance we have not seen previously while providing more options than established cryptos.”

Likening Libra to a “security backbone,” Desai acknowledged it will allow Facebook to gather more data. The handling of such data will be at the core of its success, considering it’s done a poor job in the past. According to Desai:

“If Facebook develops this right, they will also be able to scale better than bitcoin and Ethereum while increasing speed and agility and revamping the crypto landscape.  Because blockchain is open source, the benefits to this kind of a payment platform not only suit Facebook, but the consumers who buy, sell, and partner with the organization. And if these developments progress the right way, the crypto market will actually be able to achieve the stability it needs.”

Calling herself a crypto evangelist, Desai said Facebook has an opportunity here that will benefit newbies and veterans alike.

“This is all while increasing their own questioned transparency and further safeguarding the personal data it would be collecting.”

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Libra

China’s Cryptocurrency Almost Ready for Prime Time

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China may have clamped down on Bitcoin, initial coin offerings and cryptocurrency mining, but that hasn’t stopped the government from readying its own digital token. 

According to media reports, the People’s Bank of China is gearing up to issue its own cryptocurrency with Mu Changchun, deputy director of the PBOC’s payments department saying  at an event this past weekend that its “close to being out.”

The officials didn’t elaborate on the timing of the debut of the cryptocurrency. He did say that the digital currency would be a replacement for cash that’s already in circulation and would support the yuan’s circulation.

China to maintain control with its digital token 

While cryptocurrency is made possible because of decentralized, blockchain platforms, China plans to issue its own to gain more control rather than cede some it. Citing patents People’s Bank of China registered, Bloomberg reported with the currency consumers would have to install a mobile wallet and exchange yuan for the digital token. The digital currency could then be used to make payments and receive them. The central bank in China would be able to see and track each and every time any money is sent or received.  The People’s Bank of China has been developing its digital currency for about five years now and joins Sweden’s central bank, which is also researching the idea of issuing its own digital token

The move on the part of China comes as regulators around the globe are expressing skepticism about Facebook’s upcoming digital token dubbed Libra. Ever since Facebook released a white paper detailing its plans, leaders across the globe including President Donald Trump, have expressed issues with it. 

World leaders have issues with cryptocurrency 

Federal Reserve Head Jerome Powell, Bruno Le Maire, the French Finance Minister, and Mark Carney, the Bank of England Governor have all expressed criticism of Libra. In July President Trump took to Twitter to rail against Libra, saying in a series of Tweets that the unregulated nature of cryptocurrency makes it rife for illegal activities such as drug trade.  He went on to say Libra will have “little standing or dependability,” and that if Facebook and other companies want to become a bank “they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National and International.”

While China is creating its own cryptocurrency it has also been one of the more aggressive countries in terms of clamping down on bitcoin. It was one of the first to ban initial coin offerings, block cryptocurrency exchanges and has put restrictions on mining for digital tokens. 

by: https://interestingengineering.com

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Libra

Ripple/Moneygram deal as big as Facebook’s Libra? Garlinghouse says so

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Ripple’s CEO Brad Garlinghouse is back in the news, this time bringing visibility to a $30 million deal with Moneygram inked this summer that will broaden the use of Ripple’s XRapid liquidity product.

Garlinghouse is expecting 100 new contracts to be signed over the rest of this year.

He also made an interesting comparison that’s turning heads in the industry.

According to reporting by Marie Huillet at Cointelegraph, Garlinghouse believes that the Ripple/Moneygram deal is up there with Facebook Libra, the social media giant’s new announcement of its own stablecoin.

Facebook has enticed several large traditional finance companies to pony up $10 million a piece to become members of a Facebook Libra Association that would administrate the coin.

However, Facebook currently battles regulatory headwinds as U.S. legislators and agencies look askance at the idea that a Facebook digital coin could be out there competing with the American dollar.

Meanwhile, Ripple reported quarterly XRP sales increasing by 48% in the past quarter.

Ripple has also gained a reputation as a company willing to work with regulators instead of against them.

“Ripple … has a record of declarations supportive of heightened regulation of the blockchain industry,” writes Kirill Bryanov in a piece outlining some of Ripple’s track record as a company that wants to work proactively with government agencies.

Investopedia goes further in a June 25 piece called “Why Does Ripple want more government regulation?”

The newest scoop adds some of Ripple’s private sector dealings; as the #3 coin (by wide consensus after BCH and ETH) Ripple stands to gain quite a bit from evolution on crypto regulation in America.

Keep it in your sights as a potential mover in blockchain technology, as the U.S. begins to warm up to the idea of digital assets in general.

By: https://warriortradingnews.com

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Libra

Facebook’s new cryptocurrency: should you invest in Facebook Libra?

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acebook’s ambitious cryptocurrency plan has received a chilly response from a number of politicians, non-profits and regulators all expressing grave concerns on its consequences. President Donald Trump has also stated his allegations against the new currency quoting, “little standing or dependability.”

What is Libra? 

Recently, Facebook has announced that it will launch a new cryptocurrency service in 2020. The service will be similar to PayPal as well as Bitcoin and might usher in the next wave of the blockchain revolution. Users will be able to access this upcoming digital currency through applications and can use it to pay for things or money.

Unlike PayPal, this currency will be available to users without credit cards or bank accounts. It will be integrated with WhatsApp and Facebook Messenger initially. Imagine playing awesome casino games in Facebook’s ‘Game section’ with Libra, instead of real money that is used in real online casinos like Omnia Casino. What’s more, Facebook’s reach is so extensive that the new coin might become a new global currency overnight, just like the euro and dollar.

How is it different than Bitcoin? How does it work?

Bitcoin does not have any central authority like the central bank to control its services. Cryptocurrencies such as Bitcoin use blockchain technology to make counterfeiting impossible by keeping a decentralized ledger of transactions that is maintained and shared across a huge network of computers.

Although Libra will use Blockchain technology to provide users with anonymity, its prices won’t fluctuate like Bitcoin which has fluctuated from $1,914 to $12,241 over the past two years. Instead, the value of Libra will be tied to a money pool in Libra Reserve which will get the cash from a new Swiss nonprofit organization (called the Libra Association) in charge of overseeing the cryptocurrency operations. As of now there are 28 initial members, from renowned companies like PayPal, Visa, and Facebook as well as non-profits like Kiva have come together to form the current organization. Every member has to contribute 10 million to the Libra Reserve. Facebook plans on increasing the number of members to 100 by 2020. 

Users will be able to exchange Libras for money in the reserve which will be invested in a plethora of government currencies and bonds. The owner of the reserves will get regular interests from the investments. All the user has to do is download a crypto wallet app that lets them turn Libras into real dollars. Facebook is planning on doing that by creating a subsidiary service called Calibra. Calibra will allow users to send Libra to anyone who does not have a smartphone yet. The main reason for forming Calibra is to separate the financial information and social media information from Facebook’s main services.

Verdict

You should not consider directly investing in the cryptocurrency as it won’t do any good. Keep in mind that Libra is more like a stable coin as it is pegged to the stable values of several global currencies and is not designed to fluctuate much unlike Bitcoin. In theory, Libra has the potential to offer basic financial services to those who don’t have a bank account. People will be able to easily transfer money to their relatives in other countries in seconds. Due to its 2.4 billion users, the company has the capacity to reach a huge audience in a short period of time. But the company is still facing opposition from various government bodies as well as the Congress. Moreover, Facebook has shed very little light on the functioning of the coin and the technology sued behind it. It still has not addressed how it will address the side consequences that this technology may usher. 

No matter what, if you are planning on investing in cryptocurrency like Libra, be prepared for the volatility as the technology and the future consequences are still uncertain. But considering the massive users that Facebook has, it is highly plausible that Libra will be adopted widely around the world. You can make money out Libra indirectly though by checking out its backers. Although most of them are major companies, some of them still have room for growth. You can buy equity in one of the backers that own Libra Investment Tokens. You can invest in Bitcoin as well which is also getting a lot of hype thanks to the Libra announcement.

By: https://www.besttechie.com


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