As was presumably inevitable, Facebook has begun its entry into the realm of cryptocurrency. Rather than going with the obvious “Facebucks”, the company calls the new currency and payment system “Libra.” Given Facebook’s fundamental lack of ethics in favor of profit-pragmatism, this development is raising some concerns. To be fair to Facebook, some good does come out of the company and Libra does have some positive aspects.
On the positive side, Libra can provide people who do not otherwise have access to traditional banking access to a currency system that can serve some important financial needs. That Facebook will profit from this does not diminish this value; while it is nice for people to do good for free, eventually one must do something that can pay the bills. Libra might also provide users with greater security and safety when it comes to financial transactions, which would also be a plus.
It should be noted that while Libra is classified as a cryptocurrency, it does differ from the more traditional versions, such as Bitcoin. One difference is that Libra is supposed to be an asset based crypto currency (what could be called an ABC or even an ABCC)—there are real-world assets behind it, rather than being a speculative investment it is intended to be money. Unlike Bitcoin, it will be closely controlled—thus causing some to see it more like Venmo than a traditional cryptocurrency. This has positive and negative aspects, depending on what one intends to do with the currency. While all these are worth considering, my main concern is with the main business model of Facebook: monetizing private user data.
Facebook claims that it is but one of many companies involved in Libra and that it has walled off the information that will be spewing from the cryptocurrency operation. It could be argued that Facebook would be content with the revenue generated by Libra and the executives believe that they need to maintain the wall in order to gain the trust of customers. But the data collected from the operation of this cryptocurrency would be incredibly valuable—so valuable that it is hard to imagine that Facebook would forgo drinking deep of this data stream. Facebook has repeatedly shown that it cannot be trusted and any protests to the contrary are analogous to those of a serial cheater telling their partner that they have changed and will be faithful this time. If Facebook persists in the tale that it will respect the wall, it will be just a matter of time before it is revealed that they did not. As noted above, the ethics of the company (if they can be called that) are such that the company cannot be trusted to respect privacy or abide by its public promises.
That said, it can be worth supping with the devil, if you have a long spoon and are aware of what the deals you make entail. The devil must do as the devil does, the same is true of Facebook: to expect otherwise is to fail to understand the nature of the company and capitalism in general. The question is not whether Facebook will use your Libra data, but whether the service is worth providing Facebook with data—just as with Facebook’s other services. So, yes, I will probably use Libra if it is advantageous for me to do so.
” my main concern is with the main business model of Facebook: monetizing private user data.”
“…the data collected from the operation of this cryptocurrency would be incredibly valuable—so valuable that it is hard to imagine that Facebook would forgo drinking deep of this data stream.”
“Facebook has repeatedly shown that it cannot be trusted and any protests to the contrary are analogous to those of a serial cheater telling their partner that they have changed and will be faithful this time.”
“the company cannot be trusted to respect privacy or abide by its public promises.”
All of this is not only true, and not only is it information that has been public for many years, but given the amount of press Facebook’s dishonesty and lack of regard for user privacy has gotten, it’s hard to imagine why this company has any customers at all.
And yet the company’s stock has risen from a low of $19/share in October, 2012 to today’s close of $187. It reached a high of just over $200 about a year ago, but declined for a bit in the face of a lot of negative press. The decline was short lived, however, and the share value is headed back to where it was.
There was no dip in usage, however. Back in 2008, the number of “Active Users” (those who had logged in over the most recent 30 days) was about 100 million. This number has steadily increased, without interruption, every quarter of every year since then – and as of the end of Q1 2019 the number of active users exceeds 2.38 billion.
It would seem that some users, probably a majority of them, are well aware of what Facebook is and what they do, and do not believe any of their public promises. It’s just that they simply do not care.
“it can be worth supping with the devil, if you have a long spoon and are aware of what the deals you make entail”
I suppose so. I find it all quite troubling. I don’t use Facebook, but I do use Google – which is probably just as bad if not worse. I carry a smartphone with me (aka a “tracker”). I also go to the doctor, where my medical history is electronically stored. I keep my money in a bank and use a credit card and an ATM card. I have a mortgage and a credit history, and I pay taxes to the IRS. I use EZ Pass when I travel, and I drive on streets that are continuously surveilled by traffic cameras. I have no fantasy about the respect for my privacy by any of these companies or government agencies. Facebook is just in the unfortunate position of being the public face of all of it. Haters gotta hate, and they’ve gotta hate someone.
Amazon recently admitted that Alexa was listening in on people’s private lives.
Apparently the dopamine is just too much for people to resist.
Dopamine is where you get it. As you say, use of Google, Amazon, Netflix, and nearly anything on the internet, including blogs like this one, is a compromise of your private information. Once it’s out there, it’s out there. So it’s really not all that private anymore, is it? This freakout about social media smells like a huge distraction to me. People posturing to give the impression that they are ever so aware or that they care ever so much. Facebook can only learn about you what you tell Facebook about. My experience is that whatever their algorithms are, they pretty much suck because I get soooo much info about things I really don’t care about and very little info on things that I do care about. Even the advertising with Google or Amazon. I generally start seeing ads about a thing that I’m interested in months after I’ve already purchased that thing. I don’t play Facebook phishing games where they ask “What kind of animal would you be” or crap like that. That is, unless I’m looking to be mildly amused as to what would pop up if I enter absurd answers.
As for fisking this actual article…I got to “On the positive side, Libra can provide people who do not otherwise have access to traditional banking access to a currency system that can serve some important financial needs. “…And who, pray tell, might this apply to, at least in the context of the USA? Illegal aliens perhaps?
I think that cannabis companies have relied on cryptocurrency for funding, because it’s illegal for banks to lend money to enterprises that are federally illegal.
So should we concern ourselves with enabling people engaged in illegal behavior to serve their “important” financial needs? Is this something on the positive side? Philosophically speaking that is.
Are there other, more legitimate examples?
Really interesting article on the tech oligarchs by Joel Kotkin at Quillette:
The oligarchs are creating a “a scientific caste system,” not dissimilar to that outlined in Aldous Huxley’s dystopian 1932 novel, Brave New World. Unlike the former masters of the industrial age, they have little use for the labor of middle- and working-class people—they need only their data. Virtually all their human resource emphasis relies on cultivating and retaining a relative handful of tech-savvy operators. “Software,” Bill Gates told Forbes in 2005, “is an IQ business. Microsoft must win the IQ war, or we won’t have a future.”
Perhaps the best insight into the mentality of the tech oligarchy comes from an admirer, researcher Greg Ferenstein, who interviewed 147 digital company founders. The emerging tech world has little place for upward mobility, he found, except for those in the charmed circle at the top of the tech infrastructure; the middle and working classes become, as in feudal times, increasingly marginal.
This reflects their perception of how society will evolve. Ferenstein notes that most oligarchs believe “an increasingly greater share of economic wealth will be generated by a smaller slice of very talented or original people. Everyone else will increasingly subsist on some combination of part-time entrepreneurial ‘gig work’ and government aid.” Such part-time work has been growing rapidly, accounting for roughly 20 percent of the workforce in the US and Europe, and is expected to grow substantially, adds McKinsey.
Of course, the oligarchs have no more intention of surrendering their power and wealth to the proletariat than the Commissars did after the 1917 revolution in Russia. Instead, they favor providing what Marx once described as a “proletarian alms bag” to subsidize worker housing, and provide welfare benefits to their ever expanding cadre of “gig” economy serfs. The former head of Uber, Travis Kalanick, was a strong supporter of Obamacare, and many top tech executives—including Mark Zuckerberg, Y combinator founder Sam Altman, and Elon Musk—favor a guaranteed annual wage to help, in part, allay fears about the “disruption” on a potentially exposed workforce.
Their social vision amounts to what could be called oligarchal socialism, or what the Corbynite Left calls “fully automated luxury communism.” Like the original bolshevist model, technology and science, as suggested by billionaire tech investor Naval Ravikant, would occasion “the breakdown of family structure and religion” while creating the hegemony of a left-wing identity-centered individualism.
https://quillette.com/2019/06/19/what-do-the-oligarchs-have-in-mind-for-us/
Interesting.
I’ve argued in past posts that the “tech liberals” are just coated in liberal sauce-they do not actually hold to any substantial liberal ideas (used in both the classic and current sense of the term). To illustrate, Facebook is happy to monetize the attacks on our democracy and YouTube gleefully monetizes conspiracy theories, racism and sexism. They presumably want to think they are good, woke folk. But all that is just a slimy sauce on their surface.
I haven’t looked at Libra at all, apart from the linked article. It’s in Wired, which is above average for reliability of tech stories, and the two authors have competent records, so I’ll write on the basis of what it says.
The most interesting aspect for me is the split-but-not between the open Libra and the Facebook-specific walled garden Calibra. This sounds like a complete replay of AOL. AOL provided an easy, safe, comfortable environment for people to access the Internet through its own proprietory interface. It drew huge crowds in, and they later dispensed with the AOL training wheels and migrated to the wider network. I have no doubt at all that the Facebook people have gamed this evolution out. I’d be interested in what they think about it, but they won’t say, of course,
Anyway, there seems to be no specific and immediate threat to anyone who avoids the Facebook Calibra, and plunges straight through to use Libra. I’ll wait until more details have been shared, and examined by experts, before I commit to that, though. So if I ever do make use of Libra, it will not be through Facebook’s interface.
In the larger picture, we have questions of a) the integrity of the financial systems under international trade with cryptocurrency (well, crypto-ish-currency) as a mainstream mechanism and b) the effect of pseudonymous instant hackable transactions on society, and whether they will stay that way. These are big questions that we may hear more about soon.
Any thoughts on what a currency is, what makes it desirable, why one currency (US Dollar, though others in the past) tends to dominate a multi-currency trading environment, what its main purpose is? Maybe from there, once we establish the meaning and purpose, we can then discuss cryptos or other such things. Just a thought about thinking. That’s what philosophy is, yes?