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Facebook’s Libra: Still a Terrible Idea

October 28, 2019
Facebook’s Libra: Still a Terrible Idea
PARIS, FRANCE - JUNE 24: In this photo illustration, a visual representation of digital cryptocurrency coins sit on display in front of a Facebook logo on June 24, 2019 in Paris, France. Since the announcement of its creation a few days ago, the virtual currency of Facebook Libra fascinates as much as it worries. Thus, a few days after the announcement of the arrival of the social network in the sector, the Bank for International Settlements (BIS) considers that the incursion of major technologies into financial activity presents "new and complex compromises between financial stability , competition and data protection ". (Photo by Chesnot/Getty Images)

People seem to think that Mark Zuckerberg gotgrilled” by Congress last week. That’s not exactly the word I’d apply to what I saw in the highlights of the proceedings.

Instead of “grilling,” the word that came to my mind was fremdschämen.

Sadly the English language doesn’t have this wonderful expression: In short, it means feeling shame on behalf of someone else who is embarrassing themselves and doesn’t realize it.

Which is pretty much how I felt for just about every member of Congress who tried to engage with Zuckerberg as they sputtered and stuttered, barely able to pronounce words, the meanings of which they seemed not to know and the phrasing of which they seemed to have been wholly unfamiliar with prior to when someone (a 17-year-old Intern? Trump’s Tweet ghostwriter?) handed them some pages on the theory that they should just cold-read at Mark Zuckerberg in front of the whole world.

The hearing was supposed to be about Libra, Facebook’s proposed cryptocurrency. Instead, it turned into a series of rants and non-sequitur questions about Facebook’s commitment to social justice and Facebook’s problems with advertising and Facebook’s general douchebaggery as a platform.

That said, there were two interesting moments.

Zuckerberg went out of his way a few days ago to explain to us that Facebook would allow political ads to state anything at all under his personal interpretation of democratic free speech principles.

However, AOC threw him a curveball and asked, “can I pay to target predominantly black zip codes and advertise to them the incorrect election date?”

Again with the fremdschämen—the power of Facebook is that it doesn’t need to resort to such ham-fisted tactics as grouping people by zip codes. They know who each individual user is AND who their seven best friends are and can target you all precisely based on who you are regardless of whether you’re in the same zip code or across the globe. But I digress.

What was interesting is that in contravention to his earlier positioning, Zuckerberg said “no”. He tried to explain that such an instance would fall under the category of being a prohibited call to violence or voter suppression. Yet when presented with an alternative AOC hypothesis, in which the false advertisements were more libellous than abjectly false, Zuckerberg went back to the original “anything goes” policy position.

Not instructive, perhaps, but as I said: interesting.


The second interesting moment came when Rep. Ann Wagner went full Helen Lovejoy and pleaded with Zuckerberg, “if you enact end-to-end encryption what will become of the children?!

I hate to break it to Congresswoman Wagner—but end-to-end encryption is alive and well on the internet and is already supported by What’s App, which is owned and operated by a company that’s been in the news a lot lately and whose name rhymes with Basefook. Apparently the children are screwed.


As it happens there was only one question that needed to be asked, and none of our elected representatives bothered to ask it:

Mr. Zuckerberg, what gives you the impression that the world has any need whatsoever for a Facebook-administered cryptocurrency?

Given that I think Zuckerberg believed that this was the real question he was there to answer, he presented his answer—unprompted—in his opening statement. I’ll paraphrase his answer for you, and I promise I’m not distorting his explanation:

There are over a billion very poor people in the world (of which 14 million live in the U.S.) who don’t have the means to participate in the global economy due to a lack of access to affordable banking. They do, however, have modern cell phones which, were a product to exist that could facilitate banking via said phones, could be used to grant them access to the magical world of waiting for shorter periods and paying lower fees to send money to their relatives back home.


Two things about this explanation immediately struck me:

(1) Zuckerberg sounds like he went out of his way to learn how to sound just like a late-night infomercial.

Hi FRIEND, I’m [retired no longer relevant actor from some 70s sitcom].

Are you tired of paying those sky-high prices and always waiting for days and days to get your [snooki dookums]? Well, your days of suffering are over! Introducing [blah di blah]—the amazing new [yummedi yum] that reduces the time it takes you to [fluh di fluh] to just 30 seconds! And best of all it’s 100 percent guaranteed or your money back!

You get the picture

(2) Zuckerberg’s answer doesn’t pass the giggle test. He’s not wrong about how miserable banking is. But the thing is that if they wanted to, Facebook could simply operate as a bank for its customers!

It doesn’t need its own fiat cryptocurrency.

It doesn’t need blockchain.

It doesn’t need distributed ledgers.

It can just implement one of several ready-to-use solutions that would give its users the ability to do all sorts of financial transactions and make payments and send money to distant relatives.

Which would mean that all of the things that people don’t love about Facebook now would continue. They would still:

  • Undermine elections
  • Distribute lies
  • Use their customer base as a massively lucrative product to sell to advertisers, politicians, and dystopian world leaders.
  • Provide opportunities for malicious actors to hack into their shoddily-built systems and steal untold reams of the public’s private information.

But what Facebook would NOT be doing, in that case, was:

  • Operate a fiat currency that competes with the U.S. dollar and threatens the world’s fragile financial system.

Which would be very much a nice-to-have, from the standpoint of America. If only Congress had bothered to ask about it.

Yevgeny Simkin

Yevgeny (Genia) Simkin fled Soviet Russia as a child and has spent his life bouncing from music to comedy to software engineering. You can follow his comedy Twitter feed here. He's also the founder and CEO of Crocodile Genia—a software consulting firm whose brilliant engineers are located mostly in Ukraine and Georgia.