The biggest problem with Libra

After reading the official whitepaper about the Libra cryptocurrency, I can identify several concerns regarding privacy, regulations, and the fact the currency is indirectly controlled by profit-making corporations. These members (corporations) of The Libra Association will probably earn dividend income from fiat money invested in government bonds.

The biggest problem with Libra and with any cryptocurrency is; what if you lose your wallet? The main advantage of cryptocurrency is the currency is decentralized and stored digitally either in an online wallet or locally in the user’s device. With traditional money, there are licensed banks to store your money and let you access it safely. If you ever lose your ATM pin or the ATM card, the bank can issue a new pin or a new card. If the money gets stolen while inside the bank, the bank will reimburse the value of the money. With cryptocurrency, this is not possible. Once you make a transaction, it is irreversible. If you lose your wallet or gets stolen, you are not getting the money back.

Before Libra, cryptocurrency was mainly used by tech-savvy individuals who knew what they were doing and knew the risks of it. There was never a commercial application & adoption at a scale planned by Libra. Libra is targeting the most financially vulnerable people. They cannot afford to lose their money. Currently, Facebook’s Calibra is the only wallet to store Libra currency. Calibra will be available in iOS and Android as a mobile app. People tend to damage or lose their phones quite frequently. If the money is stored on the phone, the money is lost for good without any hope of recovering it. Facebook has not announced whether the money is stored locally or on the cloud yet. If the money is stored locally, it is good for maintaining privacy but tough to recover. However, if the money is stored in the cloud, Facebook will be able to track the transactions and flaw in the servers will exploit everybody’s savings in the cloud.

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