Why Blockchain's Biggest Threat May Be Facebook
Blockchain technology, now used by mainstream companies worldwide, such as JPMorgan Chase & Co. (JPM) and Toyota Motor Corp. (TM), to run parts of their operations, faces a major threat. According to several critics, including one of the respected leaders in the computer science world, Mihai Alisie, co-founder of Ethereum, the blockchain of choice for most business and finance projects, Facebook Inc.’s (FB) foray into the cryptocurrency space is bad news for technology.
In June, Facebook announced plans to develop its own digital coin called Libra, set to be backed by cash and short-term securities. Like other cryptocurrencies, Libra would run off blockchain technology, allowing the platform’s more than 2 billion users to send Libra coin to one another, and use it for transactions across Instagram, WhatsApp and Messenger. The idea is to create a secure and low-cost way for consumers to move money around the world.
Since the day the news about Libra broke, Facebook has faced criticism from lawmakers. The company has battled with regulatory issues over the recent years, following a wave of scandals and a massive data breach involving political consulting firm Cambridge Analytica. Many have ridiculed CEO Mark Zuckerberg for not better managing Russian interference in the 2016 Presidential race.
The key issue is that the social media behemoth, which is under constant scrutiny for the way it monetizes the personal data of its users, threatens the privacy and user sovereignty that is crucial for blockchain, per the experts cited by Bloomberg. Ethereum co-founder Alisie highlights the fact that an integral aspect of blockchain is that no person or corporation owns the underlying systems, comparing it to how the Internet is
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