Facebook’s cryptocurrency has something for everyone to hate

Every once in a while, a company comes along that becomes a lightning rod for criticism from almost all directions, whether justifiably or not. At one point, this awkward mantle was held by IBM, and for a time Microsoft also played the role, but there’s no question who holds that title today: Facebook. The globe-spanning social network has become such a magnet for criticism that virtually anything it launches is questioned, if not dismissed outright as the work of a megalomaniac. That was certainly the dominant reaction to the company’s launch of a proposed cryptocurrency, known as Libra, which it announced with much fanfare on Tuesday. Although still very much in the formative stages, the proposal was roundly criticized by almost everyone, including a number of cryptocurrency experts, financial analysts, opponents of Big Tech, and financial regulators in both the US and the European Union (people born under the astrological sign Libra are apparently also upset).

To be fair, Facebook has brought much of this negative attention on itself. It has spent the past several years at first denying and then scrambling to fix (or cover up, depending on your perspective) multiple privacy breaches and failures that have exposed the personal data of hundreds of millions of users, including the Cambridge Analytica fiasco. The company has also been slow to react to the reality that its massive platform for targeted content and advertising has also been weaponized by professional trolls and agents of foreign governments, some of whom have used its tools in an attempt to influence elections in at least half a dozen countries. If anyone has done their best to poison the well when it comes to launching ambitious new projects like a global cryptocurrency, it is Facebook.

This explains why even in the most positive coverage of Facebook’s new currency, there was an unmistakable sense that—as The Verge wrote about the Facebook Portal, a video screen product that the company released last year—this would have been a much more interesting (and potentially even positive) development if it had come from literally any other company. A global cryptocurrency? I’d like to know more! Controlled by Facebook? Er, no thanks. To make matters more frustrating for the company, it has gone to considerable lengths to make it clear that a) Libra won’t be controlled by Facebook, but by a non-profit consortium of members, and b) that none of the data provided by users will find its way into Facebook’s other operations—unless users explicitly say they want it to.

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Some see the new currency as yet another case of Facebook playing Lucy to the world’s Charlie Brown: holding the privacy football still and promising not to move it, right up until Charlie Brown tries to kick it, at which point it is whisked away. But that’s not the only criticism of the Libra project. As the Financial Times pointed out in a series of in-depth (and sharply critical) articles, what Facebook is proposing isn’t really even a cryptocurrency as we have come to know the term. It certainly isn’t the kind of decentralized, networked currency that Bitcoin aspired to become. If anything, it looks almost as centralized as the traditional banking system, but with the term “blockchain” welded onto it. In many ways, it’s a lot more like a digital version of Western Union than a true cryptocurrency.

Given the kind of negative reaction the company must have known was coming, why would it bother trying to launch something like Libra at all? Founder Mark Zuckerberg’s motivations are difficult (if not impossible) to ascertain, but one theory is that he sees it as a key weapon in a competitive battle with non-US giants like WeChat, the Chinese social network through which users conduct an ever-growing amount of their daily lives, including shopping, banking and other transactions. As Facebook’s growth slows in the US, and many people delete their accounts, the rest of the world becomes an even larger priority for the company. It may be hoping that news of data leaks and election meddling are less top-of-mind in the rest of the world than in the US, but whether that perception is accurate or not remains to be seen.

Here’s more on Facebook’s cryptocurrency ambitions:

  • Nonsensical: The Financial Times‘ series on the Facebook project doesn’t beat around the bush: the preamble to the series says it is intended to “show how nonsensical, pointless, stupid, risky, badly thought-out and blockchainless the whole thing is.” The FT says it appears Facebook is just trying to build a global payments network, and “there doesn’t appear to be any good reason why you would want to do this using blockchain tokens. Could it be the blockchain stuff is mostly PR?”
  • A crystal ball: Over a year ago, Wired magazine noticed Facebook had reorganized one of its units and made David Marcus the head of a project aimed at exploring cryptocurrency. When asked what the company’s plan might be, writer Erin Griffith threw out a number of possibilities and then said: “Maybe we’re not thinking big enough. After all, Facebook has 2.2 billion users. In theory, Facebook could create a new global currency!”
  • Global domination: University of Virginia media studies professor Siva Vaidhyanathan, author of the recent book Antisocial Media: How Facebook Disconnects Us and Undermines Democracy, warns in a piece published by The Guardian that the launch of a cryptocurrency could extend Facebook’s “global domination” and further concentrate corporate power over a number of markets in Facebook’s hands.
  • Dead in the water: Veteran technology writer Steven Levy has an in-depth look at the structure behind Libra and Facebook’s intentions, including some comments from creator David Marcus, who was one of the founders of online payment giant PayPal. “Some of the articles out there have described this as Zuck-bucks and Face-coin,” says Marcus. “If it’s that, it’s dead in the water.

 

Other notable stories:

  • They may be rivals, but The New York Times and The Wall Street Journal seem to be presenting a united front on one topic: the danger inherent in having a president who is willing to accuse the press of treason for doing their jobs. Times publisher A.G. Sulzberger wrote an op-ed piece on the topic that was published by the Journal, saying the use of the word “treason” crossed a line and is “irresponsible and wrong.” CNN says the Times publisher reached out to the Journal‘s op-ed editor and offered them the piece.
  • Jabir Idrissa was once a leading investigative journalist in Tanzania, covering corruption, the environment and human rights for two of the country’s most respected publications, according to a piece in The Guardian. But that was before a story he wrote about a gold mine led to a two-year, government-imposed publication ban. Today, Idrissa is out of work and struggling to provide for his family.
  • Lyz Lenz writes for CJR about Bryan Goldberg, co-founder of Bleacher Report, who has been acquiring bankrupt and failing media companies for some time now, including Mic.com and Gawker.com. Although he has been normalized by flattering profiles, Lenz says Goldberg’s “base instincts haven’t changed. He shouts. He spins. He just does it all on background now.
  • A group of US senators led by Chuck Grassley, the chairman of the Senate Finance Committee, have sent a letter to Attorney-General William Barr arguing that Al Jazeera, the news outlet funded in part by the Qatari government, should be forced to register as a foreign agent under US law. The letter says that the network “frequently features content promoting the apparent policy priorities of its owner,” including support for the group known as the Muslim Brotherhood. In a statement, Al Jazeera said that it gets public funding much like the BBC, but its reporting “is not directed or controlled by the Qatari government nor does it reflect any government viewpoint.”
  • The U.S. government is investigating Google-owned YouTube for allegedly violating children’s privacy, according to a report from The Washington Post, based on four people familiar with the matter. The Federal Trade Commission is said to have launched its investigation after numerous complaints from consumer groups and privacy advocates that the company was collecting personal data from children and using that to target advertising.
  • Five anchorwomen for the NY1 cable network are suing the channel for age and gender-based discrimination, according to The New York Times. Amanda Farinacci, Vivian Lee, Roma Torre, Jeanine Ramirez, and Kristen Shaughnessy all say they were forced off the air by station managers in favor of younger, less-experienced hosts.
  • A report in The Daily Beast says Fox News host Tucker Carlson has been advising Donald Trump on foreign policy, specifically the country’s approach to a potential conflict with Iran. A source familiar with the conversations told The Daily Beast that, in recent weeks, the Fox News host “has privately advised Trump against taking military action against Iran,” in contrast to some of the more hawkish members of the Trump administration.
  • Daniel Dale, the former Toronto Star reporter who gained a wide following for his Trump coverage, published his first article for new employer CNN: a list—and a fact-check—of each of the 15 false claims that Donald Trump made during his 76-minute speech at a rally in Orlando, including comments about Russia, China, the environment, energy, Clinton’s emails, and the wall.
  • For CJR, Max Blau writes about an Atlanta radio-show host who complained about gender discrimination at her workplace, and was subsequently restructured out of a job. Amy Kiley, former host of All Things Considered on WABE, also found that about 30 of the stories she had written for the station had been removed from its website. The station wouldn’t say why, and Kiley’s claim of sex-based employment discrimination is still pending.
  • In describing the genesis of a Washington Post feature on a New York hedge-fund manager and his wife who have donated millions of dollars to the anti-vaccination cause, Amy Brittain of the Post‘s investigative team notes that the feature took shape after commenters on the paper’s stories about the anti-vax movement asked reporters to look into who was funding the protests.

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Mathew Ingram is CJR’s chief digital writer. Previously, he was a senior writer with Fortune magazine. He has written about the intersection between media and technology since the earliest days of the commercial internet. His writing has been published in the Washington Post and the Financial Times as well as by Reuters and Bloomberg.