Edit 2021: Oops. Guess not!
Disclaimer: I’m not an expert on cryptocurrencies, however I have some opinions on Facebook Libra - as I’m sure many people do right now!
The hallmark of a dangerous technology isn’t how bad it seems on the surface - it’s one that’s too useful to not be adopted. A couple of Google searches will yield endless articles & videos on why Libra is terrible for privacy, security and a whole host of other reasons. These conversations tend to miss the core component of why I believe it poses such a threat in the first place. What compelling force will cause Libra to be adopted and become the nightmare we all fear it to be? There’s a few arguments here.
Firstly, the fact is, transactions online suck and have always sucked. There’s an argument that micropayments could be an innovative internet business model if it wasn’t for exorbitant transaction fees, however at the end of the day, moving any kind of money, be it gold, USD or Bitcoin, it’s virtually impossible to do for free - because mitigating risk is not free. I believe there’s an argument to be made here for the potential advantages of centralised scale - if Facebook controls everything then they could effectively eliminate fees, especially if you consider they have an incentive to monetise transaction metadata rather than transactions themselves.
I believe is the most significant market for Libra’s is "The Unbanked" - people who don’t have access to banking/financial services, usually due to their surrounding economic conditions. Access to online marketplaces has become a huge factor in quality of life which is why I believe people going to adopt this technology regardless of the privacy & security issues. And that’s a completely reasonable trade-off from the perspective of somebody living in these unfortunate circumstances, but in the long-term it’s going to drive people towards the Facebook platform and that is Libra’s true goal. Humans are bad at long-term risk analysis in the best of conditions.
If you’ll recall Facebook’s Internet.org initiative, it followed a very similar playbook. Bring an essential service to a less-developed economy and make the users reliant on Facebook in-order to use it. "Free Basics" was their attempt to bring connectivity, to FB’s tiny private internet. Amusingly enough, India passed legislation forcing Internet.org to pull out of the market just days later. No kidding.
This could get worse: The countries Facebook want ("the next billion" as Zuckerberg likes to put it) are soon going to be driving worldwide growth across every industry much like how China was until recently. If a significant segment of the population are using Libra, what’s going to stop corporations from adopting it as the global trade currency? With the next step being end-to-end purchases in Libra, from customer to manufacturer to worker. A pie-in-the-sky idea to be sure, but so would the primary communication channels of billions of people being controlled by a few dozen corporations.
Facebook is in a unique position here - I believe they’re one of the only companies who have their distributive power to make this truly frictionless. The staggering number of Facebook accounts out there mean it’s very possible that there could be billions of Libra wallets on people’s phones literally overnight across all of their products. Chances are a significant amount are going to adopt Libra for various things and that sucks.