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The Trouble Starts If Facebook’s New Currency Succeeds

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  • The Trouble Starts If Facebook’s New Currency Succeeds

    The key insight underlying Libra is that the transfer of money from person to person is similar to the transfer of information. “Moving money around globally,” Facebook declares in the white paper laying out the company’s vision for its new cryptocurrency, “should be as easy and cost-effective as—and even more safe and secure than—sending a text message or sharing a photo.” Money is information: When I send money to you, I’m telling the financial system that wealth holdings assigned to me should now be recorded as assigned to you. Financial networks are information networks, just as social networks are. And yet while the internet has revolutionized social networks, financial networks have not caught up. They remain hard to use and expensive, especially for international transactions—whereas, once you own the hardware and obtain an internet connection, social communications are essentially free. In Facebook’s vision, the financial network will be modeled on the social network, and eventually the two networks will be merged into a single network, through which we will seamlessly convey to one another money as well as cat photos and political diatribes.

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