- >Opinion: A Business Crypto is Dangerous and Inevitable
Opinion: A Business Crypto is Dangerous and Inevitable
Cryptocurrency is a revolution in finance the likes of which the world has never seen. There has never existed a way for individuals, businesses, or governments to transfer wealth over large distances like we can today. The invention of cryptocurrency has forced governments to think of ways to regulate this new powerful technology. The biggest difference between the internet and cryptocurrency, is that money exists in the domain of government. Naturally, many world governments feel threatened by technological transformation. The story of cryptocurrency is in its early days, with its fate not yet decided. There are several outcomes that are worth exploring as possibilities. One of those possibilities is that international businesses create for themselves a cryptocurrency that serves their interests.
Keegan Francis | Oct 13, 2020
The First Attempt: Libra
It is only a matter of time before there exists a cryptocurrency that serves the interests of business. In early 2019, Facebook announced that it will be deploying a cryptocurrency called Libra. The mission statement of libra is to “Provide people everywhere access to safe and affordable financial services”. This is a noble goal, with 25% of the world living without reliable access to financial services. The problem though, is who has control over the financial system, and what sort of implications that has.
Although Facebook was the first to announce the Libra project, they are actually not the sole governing body behind the proposed cryptocurrency. Instead, facebook would own a single seat at the table of 99 other international corporations. The governing body is called Calibra. Each company must invest a minimum of $10 million dollars in order to obtain their seat.
Libra was met with impressive criticism from world governments. One critic of monetary policy and privacy states that when money is separated from the government, it results in chaos.
Money Without Government is Chaos
A topic that was explored thoroughly by USA Network’s, Mr. Robot, is what happens when money becomes unhinged from government control. A fascinating conversation took place between two of the characters on the show. One of which is the CEO of the largest bank in the world (eCorp), and the other is the secretary of the treasury. The banker tells the treasurer that the bank is building their own virtual currency. The crucial point in the conversation is when the banker lets the treasurer know that if Bitcoin takes over then “we are all in a world of hell”.
E-Corp is meant to represent an amalgamation of powerful tech giants, merged with the banks. Imagine a world where Apple, Facebook, Google, and JP Morgan combined their respective powers and launched a cryptocurrency. Facebook has 2 billion active users per month. With such a reach, it is not impossible to imagine a cryptocurrency launched by facebook taking over as a predominant or preferred money.
In a perfect world, regular government money supports, and works for the people. This is not quite what we see happening, because most money is in a grey area between government and business. Businesses are beholden to their shareholders, which means they do not act in the interests of regular day people. This is the exact category of people you do not want controlling a world currency.
Only a Matter of Time
It is only a matter of time before there exists a cryptocurrency that serves the interests of business. Only a select number of businesses are leveraging the power of cryptocurrencies to conduct financial transactions. The powers that may be leveraged are censorship resistance (the ability to not be stopped) and cross border payments. If a business is conducting a multitude of international money transfers on a regular basis, then they are subject to the fees charged by banks. Furthermore, details of their financial dealings are collected and given to the authorities for analysis. This is to ensure that businesses are not evading tax, or engaging in criminal activity.
It stands to reasons that businesses have everything to gain, and money to lose by not switching their international payments to a cryptocurrency based system. More privacy, less fees, and faster payments massively outweigh the negative aspects of sticking with the current methods of money transfer. When such an innovation is brought to the world, it is only a matter of time before businesses all around the world adopt some kind of cryptocurrency. It is not a matter of if, but when.
The Pros and Cons of a Business Coin
There are scenarios that we can imagine where a business cryptocurrency ends up serving the world for the better. Allowing not only the bad businesses to conduct business quicker, and more efficiently, but also the good ones. For example, a coin that is deeply integrated into the business world would allow people to spread wealth, and value as effortlessly as we spread information. It would be simply, and trivial to donate to your charity of choice every paycheque. You could even pay for meals for the homeless at the click of a button.
The downsides however, may outweigh any potential benefits. Privacy may completely cease to exist. Our financial transactions may be the last piece of data we still have some sort of control over. The fact that the banks haven’t upgraded their decade old system is the only thing stopping mega corporations from harnessing our payment information to serve us exponentially more relevant advertisements. With our payment data owned, controlled, and operated by companies like Facebook, we can be sure that we’re signing away our last piece of control. If our social media data tells companies how we think, our financial data tells them what we act upon.
Bitcoin: The Saving Grace
The saving grace is a currency that is absent of a leader, government, or company influence. This currency exists today. Bitcoin is the only currency in the world that lacks any formal leader. Every other currency was created by a government or cryptocurrency company. It is for this reason, that bitcoin is considered the peoples currency. Bitcoin needs to exist to counterbalance a cryptocurrency that serves the interests of business. Bitcoin represents the interests of regular people in a world where no other currency truly does. While countries engage in economic warfare, or regular war for that matter, bitcoin is gaining traction and adding supporters at a rate that is as unstoppable as the code that runs it.