Members of the Libra Association, a group of 28 companies and not-for-profit groups including and brought together by Facebook may soon have the power to forever change the history of the online marketplace worldwide.
The Senate and House hearings in Washington July 18th and 19th – as theatrical as they were – may still only be a subtle indication of the grand ramifications of a marketplace where privacy does not exist for buyers and sellers. Where every mouse click may be tracked, analysed, recorded and reported to any number of parties, including other vendors, advertising agencies, financial institutions, and government agencies – all without any of us the wiser.
The potential growth for Facebook – with a reach of 2.38 billion users – as a marketplace, could even outpace behemoths like Amazon and eBay if it became as universally accepted as a marketplace as it is as a social network. The Libra, proposed as a commonly accepted cryptocurrency pegged to a basket of national currencies such as the U.S. dollar, euro, British pound and Japanese yen, could give Facebook this advantage.
The potential growth for Facebook – with a reach of 2.38 billion users – as a marketplace, could even outpace behemoths like Amazon and eBay if it became as universally accepted as a marketplace as it is as a social network.
The societal impact promise of the Libra stated in the Libra white paper, is to onboard the unbanked in underprivileged countries. The new cryptocurrency may accomplish this altruistic aim to some extent, but at what cost? Is this promise merely a Trojan horse filled with tiny soldiers of surveillance ready to do the bidding of their generals?
As a publicly-traded company, Facebook, along with the 27 other companies of the Libra Association serving as nodes for the Libra coin, have obligations not only to their share-holders but to the governments in which they do business. A decentralised, permissionless, public blockchain like that of Bitcoin is obligated only to its code. And where Bitcoin affords at least pseudonymity to its users, the Libra will, by design, be intrinsically vulnerable to examination, manipulation, and even seizure – should one of many authorities dictate it.
Each of the 28 members of the Libra Association, will have its own government-mandated regulations to abide by, most notably but not limited to KYC, AML, and CFT. These ordinances entail enormous data harvesting. Every data entry on this permissioned centralised distributed ledger has the potential for vulnerability, for harvesting by parties known and unknown, for reasons both stated and covert. And Facebook, through the use of its Libra coins, is poised to become the world’s largest marketplace and the world’s largest data-harvesting platform.
David Marcus, CEO of Calibra, the Facebook subsidiary creating the native wallet for Libras, stated at the hearing on July 19th, “We will not share financial data and account data even with Facebook itself.” However, Mark Zuckerberg’s motto of “move fast and break things” has led him into legal issues of privacy breach, charges of election manipulation and broad-reaching arbitrary censorship that put David Marcus’ statement in a dubious light. Even the record $5-billion fine imposed on Facebook July 12th by the Federal Trade Commision for violating the terms of a 2011 FTC settlement of privacy practices seemed not much of a deterrent as Facebook collects $5-billion in revenue in an average month alone.
Can we trust the world’s largest social network with its checkered past, dubious present and uncertain future, creating its own currency? Do we need to? The word “trustless” in the blockchain space may be a confusing term to those unfamiliar with it. In fact, it refers to a system that requires neither trust nor permission; a system governed by the unbiased precision of mathematics, a system without political preferences, company agendas, shareholders or a board of directors. In decentralized systems trust is simply not necessary, hence “trustless.”
Can we trust the world’s largest social network with its checkered past, dubious present and uncertain future, creating its own currency? Do we need to?
The ramifications of privacy breaches within such a broad and far-reaching marketplace as a post-Libra Facebook are vast. And Facebook is not alone in its security vulnerabilities. Let’s not forget the Amazon cloud breach scandal of 2015 which raised privacy concerns for users of the popular platform. And Ebay – now a member of the Libra Association – faced its own security breach in 2018, when all 145 million users were asked to change their passwords. Users seeking true privacy for purchases and sales to avoid fraud, identity theft, censorship and other dangers via an online marketplace are limited in their choices today.
One software product by Privacy.com generates unique credit card numbers for purchases. This is a unique option for deterring harvesting of personal financial data but does not protect the buyer from the harvesting of other data entered during purchase.
Particl Open Marketplace, a privacy-focused decentralised application affords its users 100% privacy secured through its RingCT protocol and Bulletproofs. The marketplace operates on a distributed network that combines various blockchain and P2P technologies. And while it has its own native coin, it will eventually accept many cryptocurrencies, and more traditional means of payments. It has no sales fees, no subscription fees, no escrow fees or even payment processing fees for buyers.
As our private lives become increasingly public through social media, let us remember the thin line that divides the social network from the network of money as one we may not choose to cross.