Facebook’s announcement of their own cryptocurrency named Libra was not met with much surprise as rumors had been swirling for some time that Facebook would take this step.
But the announcement did beg many questions, such as what was Facebook really trying to accomplish with it’s own cryptocurrency.
In reality, their coin will be similar to a stable coin in that it will be backed by real assets and pegged to a certain value. So this wont’ be something people will use as investment, instead it will be a cash/money alternative that locks the user inside of the Libra/Facebook ecosystem.
So why does Facebook need a car wash token like system to get people to trade their real money in for Libra coins? The reason is simple, they are going after their millions of low income users who are unbanked and cannot obtain traditional banking products like debit cards or credit cards, and in many cases can no longer use Paypal or other money sending services due to past misdeeds on those platforms.
The dirty secret about Facebook’s demographics is that internally they are realizing the average income of their users is dropping. Far more low income people use Facebook and they use it far more than higher income people. This is a trend that is only increasing. Their user base is becoming increasingly low income, which often means unbanked and unable to obtain banking products.
In fact, many low income people use Facebook for a good deal of their commercial transactions, some of them illicit. Things like trading food stamps and selling shoplifted goods is rampant among groups on Facebook. But there are plenty of legal transactions, such as users selling their services their Facebook friends in fields like hairdressing or similar home business ventures. Of course, Facebook also plans on soon allowing companies to directly sell on Facebook, as long as they use Libra for the transaction.
Facebook wants to trap these lower income users in their own cryptocurrency ecosystem, a system that no doubt will be filled with astronomical fees and costs for the end user. Sadly, low income users often fall victim to these high-fee tactics because they either have little knowledge of proper financial practices or they simply have no choice and no traditional bank will work with them because of bad credit or past misdeeds.
Facebook wants to further exploit these people and lock them into their Libra ecosystem where they will steal away what little wealth they have using high fees, all the while collecting their spending habits and personal financial information when those users make traditional purchases.
Of course, it would be silly to think Facebook isn’t going to be collecting data with Libra, after all Facebook is a data mining company that sells itself as a social media company. Not long ago information was leaked and reported by the Wall Street Journal that Facebook was contacting major banks and asking if they can have the account balances and other information of Facebook users. The banks declined so it appears as though Facebook just decided to make their own currency so they could get the information that way.
But Facebook isn’t alone in going after poor people to exploit. Amazon recently announced a secured credit card for its own customers that have bad credit and are unbanked. Of course, the Amazon secured credit card is not without out-of-this-world fees that no customer would choose if they had any other choice. Most people who use this secured card will end up losing their balance, which is the goal. So why is one of the wealthiest companies on Earth going after low income and bad credit customers? They are doing it for the same reason Facebook is, to scrape what is left at the bottom of the economic barrel. It’s wealth extraction at it’s lowest and most despicable form.
In the end, Facebook’s Libra is the exact opposite of what cryptocurrencies were designed for. Crypto was designed to free people from a centralized banking system which exploits those who were forced to become a part of it and slowly extract their wealth. Facebook’s Libra is doing the exact opposite and couldn’t be more antithetical to the spirit and design of cryptocurrency.
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