Facebook's Dream of World Domination
Mark Zuckerberg announced the launch of a new cryptocurrency. What could go wrong?
What does a multinational company do when it reaches stratospheric heights in terms of capital and market reach? For billionaire Facebook CEO Mark Zuckerberg, the answer is easy: launch the company’s own cryptocurrency.
Last Tuesday, the Silicon Valley behemoth unveiled “Libra” a blockchain-based technology that will be governed by more than two dozen other large corporations, venture-capital firms, blockchain companies, and nonprofit groups, including MasterCard, Visa, Uber, PayPal, and Spotify. Each of these companies will invest $10 million to maintain the currency. In return, they will be given a vote on its governance through a not-for-profit foundation called the “Libra Association” that will be based in Switzerland. The new coin will be released in 2020.
Why Switzerland? “Switzerland has a history of global neutrality and openness to blockchain technology, and the association strives to be a neutral, international institution, hence the choice to be registered there,” explains a statement released by the Libra Organization.
As many Americans know, cryptocurrencies have a highly volatile track record. Facebook insists Libra will be “a stable currency built on a secure and stable open-source blockchain, backed by a reserve of real assets, and governed by an independent association.”
In addition to Libra, Facebook will create a mobile app called Calibra that will enable users to send and receive the digital currency. Calibra will exist as standalone iOS and Android apps, along with parts of Facebook’s own messaging apps, WhatsApp and Messenger. Users will be required to get a government-issued ID in order to open an account. Local currencies will be convertible to Libra and stored in the Calibra app.
Valuation? “Libra is designed to be a currency where any user will know that the value of a Libra today will be close to its value tomorrow and in the future,” the Libra Organization asserts. “Just as consumers in Europe know the number of Euros it takes them to buy a coffee today will be similar to the number of Euros it will take them tomorrow, holders of Libra, too, can be confident the value of their coins today will be relatively stable across time.”
Privacy? In a Facebook post of his own, Zuckerberg insists that privacy and security will be “built into every step.”
Not exactly. “Aside from limited cases, Calibra will not share account information or financial data with Facebook, Inc. or any third party without customer consent,” Calibra’s terms of service state. Limited cases are defined as those that “keep people safe, comply with the law, and provide basic functionality to the people who use Calibra.” And while those terms also state that “customers’ account information and financial data will not be used to improve ad targeting on the Facebook, Inc. family of products,” customers’ “aggregated” data will be exploited. To allay customer concerns, unspecified “techniques” will be employed to prevent any data from “being connected back to the individual.” Furthermore, the statement adds, “if a Calibra product feature can be personalized or improved with data from Facebook, we will first obtain customers’ consent to share the relevant data with Calibra.”
Facebook’s tawdry track record says otherwise. The Cambridge Analytica scandal revealed that the data of from 87 million users was shared with political consultants, a hack exposed the information of nearly 50 million users, and Facebook remains under criminal investigation for deals it struck with other tech giants, including Amazon, Apple, Microsoft, and Sony.
As columnist C. Mitchell Shaw explains with regard to that scandal, “Netflix and Spotify were able to read users’ private messages,” Amazon was permitted to obtain “users’ names and contact information through their friends,” and Yahoo was allowed to “view streams of friends’ posts as recently as this summer , despite public statements that it had stopped that type of sharing years earlier.”
Facebook also enabled hack Daily Beast columnist Kevin Poulsen to dox a 34-year-old Bronx resident. Poulsen was apparently upset that the man allegedly posted a doctored video of Nancy Pelosi appearing drunk, which went viral. The man acknowledged he is an administrator of the Politics WatchDog Facebook page where the video appeared but denies creating it.
Yet how did Poulsen find out about him in the first place? In his column on the subject, Poulsen revealed that “a Facebook official, confirming a Daily Beast investigation, said the video was first posted on Politics WatchDog directly from [the man’s] personal Facebook account.”
Naturally, the man is infuriated. “On May 29th Poulsen sent an email to my email account that I only use for banking and is not associated with Facebook or my paypal account. How did he get my banking email address? A crime has been committed here.”
Criminal assertions aside, it doesn’t take much of an imagination to think that a Facebook-initiated group of like-minded, virtual-signaling Masters of the Universe might be inclined to embrace similar, ideologically motivated, privacy-busting “exceptions” — in pursuit of equally “noble” causes, no doubt.
Syracuse University Communications professor Jennifer Grygiel sees the bigger — and far more ominous — picture. “Facebook CEO Mark Zuckerberg is clearly seeking to give his company even more political power on a global scale, despite the potential dangers to society at large,” she writes. “In a sense, he is declaring that he wants Facebook to become a virtual nation, populated by users, powered by a self-contained economy, and headed by a CEO — Zuckerberg himself — who is not even accountable to his shareholders.”
Grygiel also points to the monumental egotism in play here. “I cannot help but reflect on the name that Facebook chose for this, the Libra, which is a reference to the Roman measurement for a pound, once used to mint coins,” she adds. “In many ways the company that Mark Zuckerberg is building is beginning to look more like a Roman Empire, now with its own central bank and currency, than a corporation.”
What it’s really looking like is the greatest corporate power play in the history of the world. And no matter how many promises people hear about only exploiting “aggregated” data, that aggregation can only occur by amassing individual data. And despite all the self-professed advantages of the platform, it all boils down to a most familiar con: the elimination of cash.
There isn’t a financial elitist in the world (including Bank of America CEO Brian Moynihan who recently stated as much) who wouldn’t love to see what is probably the last real bastion of privacy completely eliminated. Cash transactions are so “messy” because they can’t be tracked — and because debt-laden central banks can’t impose negative interest rates on savings they see as a panacea to their wholly self-inflicted fiscal recklessness.
There is little doubt the Libra Organization wants to be the world’s “go to” banking entity. Or is that ultimately the world’s only banking entity?
More important, what happens when the distinction between countries — with laws, elections and national identities — and multinational corporations — who answer to no one but themselves — becomes indistinguishable?
A world government run by Facebook? Or Google? Or Amazon? The megalomania is breathtaking — and dangerous.