This time it’s Libra and Bitcoin.
I am talking purposely late on Libra because I wanted the hype to settle and let everyone say what they eventually want to say.
Libra, as you might know, the new blockchain and crypto coin proposed by the mighty Facebook. It will come into production in the next 1-2 years and is essentially a stablecoin backed a basket of fiat currencies.
The implications of this are huge, especially for Bitcoin lovers like you and me.
Relax, the implications are positive.
But before talking about those, I want to draw your attention to the trilogy forming here. We already had these:
- Fiat money – controlled by central banks like USD, EUR, GBP, etc.
- People’s money– Bitcoin: a decentralized and permissionless money
- Libracoin (Corporate money)– the third entrant to this is Libracoin
This third entrant makes the game of money more complicated and exciting as in some countries; Facebook will easily be able to lobby regulators and launch its Libracoin.
It is effectively giving banking services to many who aren’t yet served by the traditional banks. As the behemoth, Facebook is, its Libra will also be as much user-friendly as you could think, giving direct competition to the conventional payment methods in respective countries.
Libra will also popularize digital assets overnight as the Facebook user base is above 2 billion, and this positive feedback loop will surely benefit Bitcoin in the long run.
There is some bad news too but not for us but the banks.
Announcement of Libra is the unofficial announcement of the death of retail banks. Libra is coming for the banking industry and is much more equipped in terms of capital, engineering, tech, and users to give banks nightmares.
They know more about their users than banks could have ever known. They will use this to bring the cost of banking into pennies and effectively bank many unbanked.
In the end, everything is set to return to Bitcoin because when people realize that Libra is just another corporate central bank they will flock to Bitcoin.
But this time only to not leave this realm.
Lastly, in my opinion, Libra though not the best solution for the world but yet it is a much-needed transition from fiat money to corporate money and eventually, the transition will happen to sound money like Bitcoin.
If you liked this stuff, you should probably sing-up for my weekly Bitcoin Musings Newsletter to get the future editions of it 🙂