Facebook, one of the world’s most distrusted companies, wants us to trust its new Libra cryptocurrency, which, it hopes, will be used by billions of people around the world. We shouldn’t. Libra will almost exactly replicate all the problems generated by Facebook’s social network. Those problems can in turn be traced to the central paradox of Big Tech: The technological innovation that is supposed to liberate us from government ends up subjugating us to a handful of corporations.
The key insight underlying Libra is that the transfer of money from person to person is similar to the transfer of information. “Moving money around globally,” Facebook declares in the white paper laying out the company’s vision for its new cryptocurrency, “should be as easy and cost-effective as—and even more safe and secure than—sending a text message or sharing a photo.” Money is information: When I send money to you, I’m telling the financial system that wealth holdings assigned to me should now be recorded as assigned to you. Financial networks are information networks, just as social networks are. And yet while the internet has revolutionized social networks, financial networks have not caught up. They remain hard to use and expensive, especially for international transactions—whereas, once you own the hardware and obtain an internet connection, social communications are essentially free. In Facebook’s vision, the financial network will be modeled on the social network, and eventually the two networks will be merged into a single network through which we will seamlessly convey to each other money as well as cat photos and political diatribes.
In the name of eliminating inefficiency and injustice in the financial system around the globe, Facebook’s new cryptocurrency threatens to replay what’s become a familiar story—of tech companies blithely reshaping the world around them, and vastly increasing their power over people’s lives, while being accountable to no one.
Read more at The Atlantic