Why Facebook’s Proposed Cryptocurrency ‘Libra’ is Already in Trouble

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| The European | 21st February 2020

Although much of the online community was aware of the existence of Bitcoin and other emerging cryptocurrencies, it wasn’t until the crypto-flagship caught headlines around the world in 2017 that the mainstream picked up on the existence and real-world value of digital currencies.

Bitcoin’s price soared to nearly $20,000 a couple of years ago, with other leading cryptocurrencies like Ethereum and Ripple also experiencing significant price hikes during Bitcoin’s ascendency. Since then, many major companies have been looking into investing in the crypto scene, adopting its foundational blockchain networks, and even creating new cryptocurrencies to try and bank on the success of the likes of Bitcoin.

One such company is the social media titan Facebook. In June 2019, TechCrunch reported that Facebook had unveiled its new cryptocurrency, Libra, and that it and its wallet companion, Calibra, were aiming to forge a new stable coin. Despite having a relatively strong concept and plenty of big-name backers – particularly from the financial industry – it all appears to be falling apart for the Facebook creation.

Libra’s coming apart at the seams

The hype and analysis around Facebook’s Libra and its potential reach, given their 2 billion-plus users, was off the charts, but just four months after Libra’s unveiling, it all started to come apart. By the middle of October, The Guardian reports that almost every major payment firm that had agreed to join Libra had bailed on the project.

PayPal was the first to jump ship, with the likes of Mercado Pago, MasterCard, Visa, Stripe, and eBay following suit. The departures couldn’t have come at a worse time for Libra, with Facebook being the subject of intense international legislative scrutiny. Privacy issues were, of course, always at the top of the objections, as Facebook has a history of failing its users in this area, with nations like France and Germany blocking Libra outright.

However, just because the prospect of Libra looks to be crumbling, it doesn’t mean that other established cryptocurrencies that follow the traditional model – as opposed to a PayPal upgrade, as some have labelled the Facebook coin – can’t serve a purpose in modern-day life.

Finally being accepted as a payment method

User adoption has been one of the primary issues facing the cryptocurrency industry. Due to Bitcoin’s rise to fame being due to its price elevation, many still see cryptocurrency as an investment vehicle as opposed to its intended purpose – a superior form of currency to fiat currency. However, as reported by the Independent, user adoption is on the rise and being facilitated by the new Flex-built app Spedn, which has enabled the likes of Starbucks, Whole Foods, and Nordstrom to accept Bitcoin payments.

Cryptocurrencies also have a lot of potential in existing digital industries, too, with online gaming currently exploring the potential of incorporating blockchain technology and cryptocurrencies. The major focus of the recommended platforms at CasinoWings is security, with only those with the highest level of security being accepted by the gaming website. However, by incorporating blockchain and cryptocurrency technology, casinos could offer even greater levels of privacy, security, transaction speed, and further establish the fairness of the games simply due to how distributed ledgers and cryptocurrencies work.

Software titan Microsoft has already put a lot of faith in Ethereum, building Azure – a cloud storage platform – on top of the Ethereum platform. The blockchain has become a primed tool for global business operations, as it enables the integration of development tools in one place.

Cryptocurrency and blockchain technology are already having a major impact, with more and more people turning to cryptocurrency as a payment method. However, Facebook’s new project Libra doesn’t look to be the financial industry disruptor that it may have been when it had serious backing.

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