, 16 tweets, 11 min read Read on Twitter
1/ FIRST ANALYSIS of @facebook's #Libra: Facebook completely misunderstands money. 🤣😩 Facebook understands payment systems--but that's not the same as money. Two telling quotes: "Libra is backed by a reserve of real assets." "Many cryptocurrencies today (eg #Bitcoin & #Ether...
2/ ...have no underlying assets to back them." Money is a good that serves as an HONEST LEDGER--it doesn't need to have intrinsic value because it attains value by people trusting it to be an HONEST LEDGER. Money is just a bookkeeping system--not all bookkeeping systems are money
3/ ...yet @facebook throws gobbledygook at us by asserting #Libra has value because it's backed by "bank deposits & short-term govt securities." 🤣 Well, at least it appears Facebook doesn't have plans (yet) to engage in fractional-reserve banking with Libra Reserve's assets...
4/ ...but this point about money is CRITICAL to understand. Money is an honest ledger that individuals use to keep track of real wealth, defined as productive assets. Sorry @facebook but real wealth doesn't include "bank deposits & short-term govt securities." That said...
5/ ...THANK YOU @facebook for widening the conversation about what money really is. That is a true service to society. #Libra is the first denationalized "money" (I'll always use quotations when referring to it as such) that billions of people in the world will encounter...
6/ ...and I salute @facebook for advancing that cause, bc billions of people will soon become #woke to the unfairness & instability of current monetary & payment systems. People are smart--they will figure out #Libra isn't scarce & will migrate to #bitcoin & other true #crypto...
7/ ...over time. At bottom, #Libra is a helpful detour that advances the #crypto cause for HONEST MONEY & nothing made this clearer to me than reading this 👇. These are the very same goals as true #crypto. I don't think @Facebook uses the same definitions I do, but we agree on..
8/ ...the basics & are headed in the same general direction. I salute that. Now, for some details. Most of what I predicted here last week still holds: forbes.com/sites/caitlinl…
9/ ...even tho @facebook didn't announce #Libra will pay interest to users, I stand by my out-on-a-limb prediction that it will be forced to do exactly that. Not only should everyone be screaming about Facebook now getting the same corporate welfare as #banks, but I thought of...
10/ ...another wrinkle on that point this morning--the developing world will be screaming about a developed-world company profiting off developing-world savers in such a manner (by hoarding all the interest income). I just don't think that will fly for very long! It will become..
11/ ...a political hot potato (& maybe also a geopolitical one too). But, again, thanks @facebook for opening that whole conversation about "what is interest," who earns it & why. Billions of people are about to become #woke on that topic too.
12/ ...Another key point--@facebook didn't lay out its regulatory strategy (is #Libra a security, does FB need money transmission licenses, etc)--but I think the #crypto industry just gained a powerful new ally in our quest to fix outdated laws that stand in the way of progress..
13/ ...All that said, in the meantime there's one US regulatory structure that almost certainly works very well for #Libra--#Wyoming's new special-purpose depository institution license, which is almost tailor-made for projects like this. Seriously, @facebook, you should look...
14/ ...at that bc it obviates the need for money-transmitter licenses in many US states. You'd be welcome in #Wyoming. I do worry a lot, though, about how you would interface w/ govts. Wyoming wouldn't tax you or make you share customer data, but I do worry about other govts...
15/ ...viewing #Libra as a giant data honeypot for govt surveillance & tax reporting purposes. Will you encrypt customer spending history so you can't see it or report it to govts? You didn't answer that in the #WhitePaper, which makes me fear the answer--but I'm willing to...
16/ ...keep an open mind. I'll stop here for now, but if you'd like more analysis here are podcasts where I discuss @facebook's #Libra (in chron order taped): @WhatBitcoinDid: whatbitcoindid.com/podcast/caitli…;
@ThinkingCrypto1: ;
@abcnews: podcasts.apple.com/us/podcast/sta…
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