{"id":7965,"date":"2020-01-28T17:49:22","date_gmt":"2020-01-28T15:49:22","guid":{"rendered":"https:\/\/forklog.media\/?p=7965"},"modified":"2020-03-26T15:07:01","modified_gmt":"2020-03-26T13:07:01","slug":"gordon-einstein-the-fact-that-libra-stalled-reemphasizes-why-bitcoins-autonomy-is-so-important","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/gordon-einstein-the-fact-that-libra-stalled-reemphasizes-why-bitcoins-autonomy-is-so-important\/","title":{"rendered":"Gordon Einstein: The Fact That Libra Stalled Reemphasizes Why Bitcoin\u2019s Autonomy Is so Important"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">In retrospect, Libra was <\/span><i><span style=\"font-weight: 400;\">the<\/span><\/i><span style=\"font-weight: 400;\"> hype of 2019. Facebook, global payment processing, cryptocurrency all mushed together in a reptilian power fantasy. \u201cWhat could have gone wrong?\u201d we ask ourselves as we watch Vodaphone coyly quit the Libra Association, becoming the eighth company to pull out of the project.<\/span><\/p>\n<p><!--more--><\/p>\n<p><span style=\"font-weight: 400;\">So what happened? Is Libra as good as dead? Our today\u2019s guest can shed some light on what\u2019s up with it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Today forklog.media talked to Gordon Einstein, the founding partner at CryptoLaw Partners, early Bitcoin adopter and \u201cthe most expensive lawyer in the world\u201d that deals exclusively in crypto-related matters. Gordon has been closely following the developments at Libra from the moment of its inception and has become somewhat famous within the community for (among other things) his commentary on Libra.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We talked to Gordon about a slew of Libra-related topics. What is Libra, who stands behind it, and who fights against it? Why might it ultimately fail and how did it in some ways paradoxically succeed. And, of course, what happens next.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> Hello, Gordon! Why don\u2019t we start from the very beginning? What is Libra? Some members of the community refuse to call it a cryptocurrency. How would you define it?<\/span><\/p>\n<p><b>Gordon<\/b><span style=\"font-weight: 400;\">: These terms\u2014digital currency, cryptocurrency\u2014they are not legally defined. And they mean different things to different people.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I\u2019d say there are two kinds of currencies. There\u2019s a currency that operates as legal tender, meaning it\u2019s a recognized form of exchange that governments say will be used within its geographical space. And there\u2019s non-governmental non-legal tender currencies, which nonetheless represent value, units of account and an accepted medium of exchange.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Digital currency is when either one of those types is not represented in physical form but is represented in computer-based accounting systems. And, when it is electronically transferred by the debit\/credit type system.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Believe it or not, the vast majority of legal tender currency is actually digital. But when we within this community say \u201cdigital currency\u201d we\u2019re usually referring to a non-governmental form of currency that\u2019s entirely electronic.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s very clear that Libra, as proposed, is at least a digital currency.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When it comes to defining cryptocurrency, I go down the Vitalik Buterin and Satoshi way of looking at it. Cryptocurrency is a type of digital currency that is secured through various cryptographic facilities. It\u2019s not necessarily that transmissions back and forth are encrypted because that\u2019s kind of what happens with digital currency also. It\u2019s more that there are these crypto-economic tools in place for making sure that there\u2019s no double spend, that the amount of it issued is under control, that ownership of it is provable, and that transactions are signable by a private key.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> So you are basically describing a blockchain?<\/span><\/p>\n<p><b>Gordon<\/b><span style=\"font-weight: 400;\">: A blockchain can use cryptographic mechanisms to ensure its integrity. We kind of assume that\u2019s what it&#8217;s supposed to do because Bitcoin does it. But there\u2019s no specific requirement that a blockchain makes use of cryptography, though it certainly should.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So I\u2019d say that cryptocurrency as a class uses distributed ledger technology coupled with crypto-economic security measures. And it specifically addresses the traditional issues with legacy digital currencies which are not legal tender\u2014double-spend issue, the rate of issuance and the issues of censorship. So if those issues are resolved by cryptographic mechanisms, I\u2019d say it makes it a cryptocurrency.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You can make a good argument that Libra is a digital currency but it\u2019s questionable whether or not it is a cryptocurrency because its issuance, for one, is not cryptographically metered. <\/span><span style=\"font-weight: 400;\">It\u2019s more like Tether. If people buy it, the Association will issue it. And they may even potentially retire it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is my take on it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> I remember you calling yourself a Bitcoin maximalist, is that correct?<\/span><\/p>\n<p><b>Gordon<\/b><span style=\"font-weight: 400;\">: I\u2019ve used that term before. But let\u2019s rather say I\u2019m a Bitcoin idealist. I really like the idea of it.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> So from the perspective of a Bitcoin idealist, do you think Libra even needed a blockchain?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> Even if Libra is not a cryptocurrency it doesn\u2019t mean it can\u2019t benefit from the use of blockchain. And when you have a consortium, which is basically what the Libra Association is, to have a single source of truth shared amongst all of them is useful.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I don\u2019t know if Libra absolutely needs blockchain, but it does add a degree of reliability about what transactions have happened in the past if that blockchain is distributed and not under the control of a single party. Blockchain is useful because it provides clearer and more reliable statements of what happened and the time and order in which they happened. Non-distributed databases under centralized control are potentially less reliable because transaction time is just an entry there and that entry may be changed by the party with control over the database.\u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So it would be nice if there was a blockchain component in Libra but I don\u2019t know if it\u2019s formally a full blockchain in the usual sense of the term. I think there is a little bit of hype involved.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In my mind blockchain is a data structure. There are time-stamp and all these cryptographic features but basically, it\u2019s a form of a linked list. Each structure on that linked list is a block of transactions. The way Libra is currently envisioned, I don\u2019t think it\u2019s technically a blockchain.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But you can go too far with this. When people say \u201coh, it\u2019s not a cryptocurrency\u201d or \u201coh, it\u2019s not really a blockchain,\u201d that\u2019s interesting, but that doesn\u2019t necessarily make Libra bad. It\u2019s just doing things differently where Bitcoin has so far failed, namely in becoming a real-life global medium of exchange.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Bitcoin maximalist in me says \u201cAnything else trying to be a medium of exchange is detracting from Bitcoin.\u201d But Bitcoin idealist in me says \u201cI really want Bitcoin to be a medium of exchange but in real life, it\u2019s not doing it. So if someone else solves it and it gets adopted, so be it.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Blockchain does not solve everything. It\u2019s not meant to. It\u2019s just a tool. A fantastically useful tool in distributed systems. But maybe currencies are not meant to be distributed or maybe it&#8217;s not realistic.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> Do you think Libra is good for the industry?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> That\u2019s a tough question. I have mixed feelings.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> Let\u2019s go for the cons and pros?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> Sure! Pros: firstly, it will make more people aware of cryptocurrencies. Libra, even if it doesn\u2019t ever show up, has accelerated history by a good three to five years. All of a sudden countries are talking about cryptocurrencies, converting their own currencies to digital very quickly, and they were not necessarily talking about doing it at this speed before. Libra pushed countries to go down this route.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another pro is that Libra drew attention to the fact that there is a large contingent of people who are unbanked and lacking access to financial services. And this issue has not been addressed globally before.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It also showed that banks are not a strictly necessary component of a financial system. The entire Libra Association did not consist of a single bank, just payment service providers and other entities. Banking is basically about taking deposits and making loans. If you have a wallet that is secure and is your own (not custodial) you don\u2019t really need the deposit functionality of the bank. The loaning process does not get solved by a wallet but it may be solved by the financial services that you can layer on top of a wallet infrastructure. So there\u2019s this great saying: \u201cgo long on Bitcoin and short the bankers.\u201d <\/span><span style=\"font-weight: 400;\">So maybe going long on Libra would likewise be shorting the bankers.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the con side, this is Facebook. I don\u2019t like all that Facebook has done. But I always make this joke during my presentation. I say \u201craise your hand if you trust Facebook\u201d. No one raises their hands. Then I say, \u201cRaise your hand if you used Facebook this week, including Facebook Messenger, WhatsApp or Instagram\u201d and almost everyone raises a hand.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So people have an opinion about Facebook that is occasionally negative because Facebook has been quite reckless if not abusive about privacy and other issues. But Facebook is a fantastic utility and I use it all the time. My legal career became successful in part because of Facebook. Still, there\u2019s no denying that Facebook has been playing loose and fast with privacy and other issues. So it\u2019s not a good look for the first corporate global crypto to be associated with Facebook.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> Did I get it right that in your opinion Libra\u2019s only drawback is that it\u2019s made by Facebook?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> There\u2019s a series of questions that are just not Libra specific. Do we want commercial interests like Facebook, like Google, like Tencent, do we want these companies individually or as a group to have the ability to create the currency that we use every day? Or do we want that in the hands of governments, or do we want something truly decentralized and independent like in Bitcoin\u2019s model?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It is not clear to me at all that we want our day to day transactions to be in some corporate crypto. Because even as unresponsive and unthinking as governments and regulators sometimes are, they are at least a little bit accountable to their populations. Whereas corporations are technically only accountable to their shareholders.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So the whole idea of corporate crypto may sound cool. It sounds like some kind of William Gibson cyberpunk novel. But we haven\u2019t been in this world for centuries and I don\u2019t know if it\u2019s safe or good to reenter this world now.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I don\u2019t know if Libra has any other specific cons. It\u2019s a little bit tainted by its association with Facebook. It\u2019s a little bit tainted by the fact it&#8217;s a corporate private currency. But it\u2019s surely an interesting idea.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> Can we backtrack a bit to banking the unbanked segment? We\u2019ve heard that slogan before with a few spectacularly unsuccessful ICO projects. Do we actually know that the currently unbanked have money and require access to banking?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> That\u2019s a great question. I have mixed feelings about this. Just because someone doesn\u2019t have something, doesn\u2019t necessarily mean that a person needs it. You\u2019re right. The question is: what is the impact of not having banking for these people?<\/span><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-9.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-7969 size-large\" src=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-9-1024x572.jpg\" alt=\"Gordon Einstein: The Fact That Libra Stalled Reemphasizes Why Bitcoin\u2019s Autonomy Is so Important\" width=\"1024\" height=\"572\" srcset=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-9-1024x572.jpg 1024w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-9-300x167.jpg 300w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-9-768x429.jpg 768w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-9-1536x857.jpg 1536w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-9-470x262.jpg 470w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-9.jpg 1729w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> Wouldn\u2019t banks organically move in, if there was sufficient demand in the unbanked communities?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> Maybe. But I often hear examples like this: because of the natures of certain societies women are not able to have their own bank accounts, therefore something like Libra is needed to solve this women\u2019s\u2019 rights issue. I don\u2019t know if that\u2019s some sort of politically correct posturing or how true that actually is, but I could see it being true.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> Do you think this is their true motivation or just corporate virtue signaling?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> It\u2019s possible that Libra\u2019s \u201cbanking the unbanked\u201d narrative is just a PR positioning strategy. That they see this as their primary market and want to look virtuous while making money from it. Like \u201chow dare you to stop us on our mission to bank the unbanked and free women and do this and that?\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But I think there has to be another layer to it. David Marcus and Mark Zuckerberg are not stupid. They must have known that the regulator\u2019s reaction to Libra would have been harsh. And most of the regulatory pushback has happened in the global north or in first world countries. <\/span><span style=\"font-weight: 400;\">So maybe that strategy all along was to pretend that they were coming up with a global currency but in real life just target the global south.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But if they said that from the very beginning they might be accused of being exploitive or imperialist. So maybe they made use of the regulators to have a good excuse to just go after the south? And say \u201chey, it\u2019s not because we\u2019re exploiting, it\u2019s because the overly-conservative regulators in the global north wouldn\u2019t let us do it up there.\u201d<\/span><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-10-scaled.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-7970 size-large\" src=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-10-1024x576.jpg\" alt=\"Gordon Einstein: The Fact That Libra Stalled Reemphasizes Why Bitcoin\u2019s Autonomy Is so Important\" width=\"1024\" height=\"576\" srcset=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-10-1024x576.jpg 1024w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-10-300x169.jpg 300w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-10-768x432.jpg 768w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-10-1536x864.jpg 1536w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-10-2048x1152.jpg 2048w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-10-470x264.jpg 470w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> Sounds like a legit conspiracy theory. But is there enough money there for this to be a feasible plot?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> The global south is not poor. It just has extreme wealth concentrations so it looks poor. But all these countries have wealthy people. All these wealthy people have bank accounts. The question is do the non-wealthy people need bank accounts?\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And it\u2019s a good question. In crypto, we aren\u2019t fond of banks. But banks do currently serve a legitimate function that crypto has not yet successfully replicated. So what if there was a good bridge away from the banking to a more idealist version of crypto?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I think also a part of that push is that the banking system has turned into a system of regulation and control and peering into people\u2019s privacy. <\/span><span style=\"font-weight: 400;\">Ever since the 9\/11 attack, especially since the 9\/11 attacks, the banking system really has turned into a global enforcement spying system.<\/span><span style=\"font-weight: 400;\"> With all this reporting between countries and now this machine learning\/AI peering through all this stuff.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When people don\u2019t have bank accounts you can\u2019t see what they\u2019re doing. The moment they get a bank account they start gaining transparency. When you combine that with all the tools that Facebook has it\u2019s potentially scary.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> Can you tell us about that field investigation you did when you traveled to Libra\u2019s head office?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> That\u2019s right! Libra Association is based in Geneva. Geneva is associated with multi-national institutions and companies and David Marcus has a long history there, including going to school there. Overall Switzerland gives a lot of good optics.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Part of my lawyer\u2019s philosophy is to get out from behind my desk and take action in the real world. So I went to Geneva and I looked up Libra in the corporate register. And I found the address for a \u201cLibra Networks\u201d. So I went down to the building and I checked it out. And it turned out that that building was a coworking facility where companies and individuals can rent desks and work.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I went in and stated that I was looking for a coworking space (which may eventually actually be the case) and took a tour around the building. I also took a photograph of the occupant\u2019s directory. And guess what, there\u2019s no Libra at Libra. In fact, the only company that\u2019s associated with Libra that was there was PayPal. That was absolutely curious.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I\u2019ve always had the feeling that Libra is a sort of cryptocurrency version of PayPal. And David Marcus, the gentleman who is running Libra, came from PayPal, he was its president. So potentially Libra was operating under that PayPal office.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Ironically, since my visit to Geneva PayPal has dropped out of the Libra Association.<\/span><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-12.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-7971 size-large\" src=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-12-1024x953.jpg\" alt=\"Gordon Einstein: The Fact That Libra Stalled Reemphasizes Why Bitcoin\u2019s Autonomy Is so Important\" width=\"1024\" height=\"953\" srcset=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-12-1024x953.jpg 1024w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-12-300x279.jpg 300w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-12-768x715.jpg 768w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-12-470x437.jpg 470w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-12.jpg 1136w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> Do they even have an office now?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> No idea!<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> Let\u2019s talk more about Libra Association. Who comprises it and why did each company become a member? We can group them for convenience.<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> There were some private equity companies, some social media, there\u2019s e-commerce, a few non-profits, several South American companies and a whole bunch of payment providers.<\/span><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-3.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-7972 size-large\" src=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-3-1024x519.jpg\" alt=\"Gordon Einstein: The Fact That Libra Stalled Reemphasizes Why Bitcoin\u2019s Autonomy Is so Important\" width=\"1024\" height=\"519\" srcset=\"https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-3-1024x519.jpg 1024w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-3-300x152.jpg 300w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-3-768x390.jpg 768w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-3-1536x779.jpg 1536w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-3-470x238.jpg 470w, https:\/\/forklog.com\/en\/wp-content\/uploads\/2020\/01\/3194835e5ae91aefa397efdc9078643b-3.jpg 1745w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong>\u00a0Why this configuration? It can\u2019t be accidental.<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> They were trying to establish a blend between private equity companies that had been backing it and non-profits to look good. Women\u2019s World Banking was in. I always joked that if you\u2019re against Women\u2019s World Banking you\u2019re going straight to hell. How dare you?<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> And then the payment services. Were they the guys who actually had the most vested interest in Libra?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> Absolutely.<\/span><span style=\"font-weight: 400;\"> I think the whole point of Libra was for these payment processors to take banks out of their business and just be able to do their business directly around the world. And when I say it was sort of a payment provider coup, it doesn\u2019t necessarily make it bad.<\/span><span style=\"font-weight: 400;\"> Banks are not all good.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Of course, pretty much every single one of the payment providers has dropped out by now.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">forklog.media: So do you think everyone will jump ship eventually? Even Facebook stated they will leave the LA if regulators do not approve of the project in the end. If everyone leaves, what will happen?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> Yes, it might potentially abandon the project if there\u2019s no hope for it. And Facebook in the meantime ironically has come up with something called <\/span><a href=\"https:\/\/pay.facebook.com\/\"><span style=\"font-weight: 400;\">Facebook Pay<\/span><\/a><span style=\"font-weight: 400;\">. This is a way to transfer value back and forth using Facebook Messenger, and that is kind of funny.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Yeah, it may all fall apart. I don\u2019t know if anyone will necessarily stay. They all have their agendas. Libra\u2019s potentially useful for this or that function but if Libra is not going to happen or if it&#8217;s going to happen in a completely crippled manner, there\u2019s no point in keeping going.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We\u2019ll see. David Marcus is a smart, experienced and persistent man. So if it can happen in some kind of useful form it may happen under his watch. I just don\u2019t think it&#8217;s happening any time soon.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>forklog.media:<\/strong> If it launches, when do you expect it to happen? David Marcus recently said that regulatory hurdles could see the launch delayed beyond the planned June date.\u00a0<\/span><\/p>\n<p><b>Gordon<\/b><strong>: <\/strong><span style=\"font-weight: 400;\">That was always obvious. There was no chance that Libra was going to launch in June 2020. It\u2019s more like 2022 or 2023. Maybe.<\/span><\/p>\n<p><b>forklog.media:<\/b><span style=\"font-weight: 400;\"> Let\u2019s talk about Libra\u2019s enemies. In your opinion who was afraid of Libra the most and for what reasons?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> Banks, in general, would fear Libra because it would attack their fundamental business. Though we didn\u2019t see commercial banks saying anything in public. Probably because regulators have been saying everything for them. All these financial regulators, all these elected officials, were very vocal and either saying \u201cwe don\u2019t want Libra\u201d or \u201cLibra poses threats\u201d or \u201cLibra needs to overcome all kinds of regulatory hurdles before we even consider\u201d.<\/span><\/p>\n<p><b>forklog.media:<\/b><span style=\"font-weight: 400;\"> Did bankers basically assassinate Libra with politicians\u2019 hands?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">I think that\u2019s an overstatement. <\/span><span style=\"font-weight: 400;\">I think banking lobbies may have had some involvement but because Libra really fundamentally attacks the concept of currency issued by governments and removes the levers and dials that governments use to control the economy, I don\u2019t think the government leaders needed to be pushed too hard to be very suspicious of Libra.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The US, France, Germany, Switzerland\u2014all the regulators from developed economies said bad things about Libra. And Russia and China, who of course have some interests against the US, were quiet about it. I don\u2019t think they would allow Libra to operate within their environments but they\u2019re happy with everything that potentially threatens the US dollar. And because Libra could become a global currency that takes over the dollar in that function, I think it threatens the US dollar the most.\u00a0<\/span><\/p>\n<p><b>forklog.media:<\/b><span style=\"font-weight: 400;\"> What actually needed to happen for Libra to be launched, to satisfy the regulators?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> In theory if Libra put in lots of controls against money laundering and terrorist financing if Libra had very transparent systems that governments could get into, and if the privacy and security of the users were guaranteed, then the arguments against Libra are certainly lessened.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Whether or not the regulators would ever be satisfied or ever explain clearly what\u2019s required, I have my doubts.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And I\u2019m not sure that current law forbids Libra from doing what they want to do. But current law can always be changed to forbid it. And even if it\u2019s not technically illegal, if the government doesn\u2019t like you and your business model, you\u2019re not going to survive for long.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In fact, one of the things that really disgusted me was a <\/span><a href=\"https:\/\/www.schatz.senate.gov\/download\/libra-letters-10-08-19\"><span style=\"font-weight: 400;\">letter<\/span><\/a><span style=\"font-weight: 400;\"> sent from one of the committees in Congress to the payment providers who were involved with Libra. And it essentially said, \u201cif you get involved with Libra, not only will we look negatively on your involvement, we may look negatively on you other perfectly legal payment businesses.\u201d That\u2019s basically blackmail.<\/span><\/p>\n<p><b>forklog.media:<\/b><span style=\"font-weight: 400;\"> Will there be a successor to Libra? As in a globally used cryptocurrency-based regulator-compliant payment system? Not actually controlled by banks or governments that is. And who will try to create it?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> Regulator-compliant but not controlled by banks or governments? That seems to only leave big companies. Because for something decentralized like Bitcoin, it\u2019s hard to make it regulatorily compliant. Because, if the regulation changes, who\u2019s going to change the crypto to make it comply with the new regulations?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It would be good for humanity if we had a single currency that everyone used. But of course, that currency should be stable, actually, hold its value and fulfill all the normal meanings of currency. Whether we can accomplish that in a world where we have all these nations competing with each other and potentially going to war with each other, and while we don\u2019t have unified humanity, I doubt it.\u00a0<\/span><\/p>\n<p><b>forklog.media:<\/b><span style=\"font-weight: 400;\"> Shall we then have numerous national\/regional \u201cLibras\u201d?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> Absolutely. And they\u2019re going to be government-sponsored. I don\u2019t think you\u2019ll have a consortium of companies doing that. It&#8217;s just too much power and too much of a threat to governments.<\/span><\/p>\n<p><b>forklog.media:<\/b><span style=\"font-weight: 400;\"> What does this mean for Bitcoin?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> Libra\u2019s problems, the issues it\u2019s facing with regulators, and the fact that the project seems stalled, is kind of good for Bitcoin. Because it reinforces the idea that you want a non-centralized digital currency that will survive and thrive no matter what the regulators do or say.<\/span><span style=\"font-weight: 400;\"> If Libra had gone past the regulators then maybe Bitcoin\u2019s resilience and censorship resistance weren\u2019t really needed. But the fact that Libra stalled reemphasizes why Bitcoin\u2019s autonomy is so important.\u00a0<\/span><\/p>\n<p><b>forklog.media:<\/b><span style=\"font-weight: 400;\"> To sum it up, on a scale from 0 to 10 how dead is Libra?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> Umm&#8230; 7.5.<\/span><\/p>\n<p><b>forklog.media:<\/b><span style=\"font-weight: 400;\"> Pretty dead?<\/span><\/p>\n<p><b>Gordon:<\/b><span style=\"font-weight: 400;\"> Pretty dead. But not completely dead, and resurrection is always possible. We\u2019ll see!<\/span><\/p>\n<p><b>Follow us on<\/b>\u00a0<a href=\"https:\/\/twitter.com\/forklogmedia\"><b>Twitter<\/b><\/a><b>\u00a0and\u00a0<\/b><a href=\"https:\/\/www.facebook.com\/forklogmedia\"><b>Facebook<\/b><\/a><b>\u00a0and join our\u00a0<\/b><a href=\"https:\/\/t.me\/forklogmedia\"><b>Telegram channel<\/b><\/a><b>\u00a0to know what\u2019s up with crypto and why it\u2019s important.<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In retrospect, Libra was the hype of 2019. Facebook, global payment processing, cryptocurrency all mushed together in a reptilian power fantasy. \u201cWhat could have gone wrong?\u201d we ask ourselves as we watch Vodaphone coyly quit the Libra Association, becoming the eighth company to pull out of the project.<\/p>\n","protected":false},"author":6,"featured_media":7967,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"human_written","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[1107],"tags":[30,611,846,1089],"class_list":["post-7965","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-occupy-the-internet","tag-cryptocurrency","tag-facebook","tag-gordon-einstein","tag-libra"],"aioseo_notices":[],"amp_enabled":true,"views":"823","promo_type":"1","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/7965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=7965"}],"version-history":[{"count":4,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/7965\/revisions"}],"predecessor-version":[{"id":7975,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/7965\/revisions\/7975"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/7967"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=7965"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=7965"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=7965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}