On Facebook Libra and Ethics in Cryptocurrency
Note: The inspiration for this article and quoted thoughts here were from the CryptoEthics discussion group hosted by the Media Lab’s Digital Currency Initiative.
The first thing that is striking about Libra, announced by Facebook last week, is that it’s the first cryptocurrency created and promoted by a major corporation.
From the video on the Facebook Libra website, it seems as if Facebook is putting a humanitarian angle on the new cryptocurrency. This may be accurate, but as one person at the discussion pointed out, the “helping poor people in foreign countries” narrative has been used often by companies.
The brand name of Facebook seems to also be granting legitimacy to the new cryptocurrency. At the discussion group, one person commented, “when I was working with other cryptocurrencies, my mother said ‘why are you messing around with something like that?’ However, when I told her I was working on Facebook Libra, my mother remarked that it seemed like a respectable thing to be working on. Facebook’s brand name apparently gave it value”
Another intriguing thing about Libra is the association that’s backing it. There are currently 28 members of the Libra Association, including a16z, Paypal, Visa, and MasterCard. Facebook owns not a majority voting stake but rather one vote like the other members of the Libra Association.
Some of the major issues we considered in the discussion group included the following:
- Is it problematic that the majority of headquarters for blockchain companies are based in New York and San Francisco and not in the countries that might benefit?
- Is it unsafe if this is beta software that might be launched to the public before being fully tested?
- What will be the financial regulation of Facebook Libra and similar cryptocurrencies?
- What data will be exposed to whom?
- Will there be any relevant anti-trust laws passed?
The meeting concluded that although we had a lot of computer scientists, we also have a need for a mix of people in the room to make these kinds of decisions – policy-makers especially.