Libra is Actually Good For Bitcoin
Facebook will usher in a new era of Bitcoin adoption - MIM Daily
MIM Daily - June 19th, 2019 - BTC Price: $9,100
Facebook’s Libra Is A Boon for Cryptocurrency Adoption
Yesterday, Facebook officially announced Libra and it was all anyone could talk about. Reactions were mixed, but personally I’m very excited for Libra.
Firstly, many altcoiners were banking on some sort of partnership announcement where Facebook would be working with ZIL or some other coin, and nothing like that happened.
While Facebook didn’t release the coin Apple style yesterday, Libra whitepaper came out along with some UX mockups and a beautiful website for the Calibra wallet that you can check out yourself at calibra.com
Libra has already received backing from 27 ‘founding’ companies like PayPal, Visa, and Mastercard, and at launch in 2020 there will be 100 founders.
The coin will be governed by this federation of 100 nodes at launch, which costs the companies $10 million each, which nets the node operators LIT investment / governance tokens.
There are strict requirements to become a node operator, companies must meet 2 of 3 very high bars in terms of global userbase, revenue or leadership in their industry. Facebook is looking for the cream of the crop to be node operators, just having the money to pay is not enough.
Why is this good for Bitcoin? Awareness. Adoption. This is going to make billions of people aware of what “cryptocurrency” is, and it will lead more people to the bitcoin rabbit hole than any other event yet.
I think Libra will be more impactful to cause of Bitcoin adoption than a global economic meltdown would be. In that case, people will be driven to Bitcoin by necessity since their fiat money will lose faith and they will seek alternatives - a global economic crash would cause a lot of pain and suffering, but would be a turning point for Bitcoin adoption.
Libra will be more impactful than an ETF approval or global crisis without any of the negatives.
Facebook uses the term blockchain quite a bit, and does some comparison to Bitcoin in the whitepaper. It’s not actually a blockchain, but that doesn’t matter because it gets more and more people talking about Bitcoin (and blockchain).
Yesterday I was watching stock pundits like Jim Cramer who usually talk smack about bitcoin excited about Libra, and you could see the cognitive dissonance on his face when comparing it to Bitcoin. Facebook is normalizing Bitcoin for us.
The best summary and analysis of the whitepaper I’ve seen so far is from Jameson Lopp of Casa:
https://medium.com/@lopp/thoughts-on-libra-blockchain-49b8f6c26372
Preston Byrne takes the cynical approach with his initial reaction, focusing on user data. However, public blockchains like Bitcoin & Ethereum don’t protect user data as it is, and Facebook has said that transactions will remain pseudonymous so that node operators won’t get more info than they would about other blockchains.
The Block had some good articles about Libra yesterday.
It didn’t take long for government politicians to step in and request Facebook to halt its development of project Libra. French lawmakers as well as US Senators are now demanding a halt until Congress and regulators can complete a thorough review.
The central banks and policy makers are scared, and for once they are setting their sights on what they perceive as a bigger threat than Bitcoin.
Here is the following comment from Maxime Waters, "Given the company's troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a cryptocurrency until Congress and regulators have the opportunity to examine these issues and take action."
See the tweet below for the full story:
How does this affect other coins?
Facebook’s Libra coin is going to significantly affect Gemini dollar, USDC, and the other US-regulated stablecoins. Facebook has the resources, network, and user base to completely dominate the fiatcoin market share (more so than the Winklevoss twins are probably willing to admit.)
Facebook is likely just the first of the FAANG (Facebook, Amazon, Apple, Netflix, Google) to release a cryptocurrency, with others likely to follow in the next 24 months. Hopefully we will see other major tech companies partner in the Libra effort rather than compete.
With Binance looking to legally establish a presence in the US crypto exchange market share, I imagine when it comes time for Libra to begin trading on exchanges Binance and Coinbase would be the first suitable options.
I also believe that any coin competing with bitcoin on “fast, free, reliable” transactions are going to have their lunch eaten by Facebook. XRP, BCH, LTC, DASH, etc should all suffer at the hands of Libra.
Andreas Antonopoulos takes the view of Facebook is competing with traditional legacy systems of retail and central banks, more than permissionless, censorship-less, and public blockchains
Joseph Stiglitz, a Nobel-Prize winning economist, sheds his opinion on crypto-currencies and believes the technology can allow for 100% transparency which would enable the Federal Reserve to make more informed interest rate decisions based on consumer spending in the economy.
What Joseph describes in an interview with CNBC is a currency that would function similarly to what it looks like Facebook is currently looking to release. Check out the link for the full interview:
Folding Monetary Policy Kickstarts Crypto, But Are We Rising Too Fast?
As Travis King points out on Twitter, the actions of Jerome Powell, Chairman of the Federal Reserve, may have set the bottom for crypto and its resurgence, in addition to the trade tariffs which accelerated the rally. Check out the tweet below for the chart comparison between RMB and BTC:
While both monetary and fiscal policy appears to be influencing bitcoin prices, Tuur Demeester is looking to see how the sentiment of the market is shaping up. The market sentiment for fear and greed have been in an increasing trend upward from November 2018 to present day levels showing highs last seen in February 2018. To see the index and the methodology behind the calculation, check out the tweet below:
Lastly, CNBC Fast Money posted a video of the Bitcoin price action and showing that Bitcoin has broken above its downtrend line, broken out of its long-term wedge, and the past two breakouts have both consolidated and subsequently broken out again. The tweet was followed by everyone asking for them to delete it for fear of the counter CNBC trade continuing.
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