David Marcus, co-founder and board member of Diem (formerly known as Libra), a centralized cryptocurrency project initiated by Facebook, stressed in an interview with Bloomberg on Tuesday that the company simply does not understand Bitcoin and continues to deliver its own altcoin project or of a single NFT stalled.
Marcus confidently told Bloomberg that “we believe the world needs a better payment system”. He hinted that after all these years, Facebook is almost ready to provide the solution.
It’s incredible how a company with access to the lion’s share of the world’s computing power failed to understand that Bitcoin has already solved the problems of final billing, near-instant transactions, monetary privacy, permit-less money, and commission-free transfer.
Bitcoin and the Lightning Network are about to be introduced as legal currency by the country of El Salvador in a large-scale demonstration of all the virtues that Bitcoin has been offering for years. Facebook has no idea.
Marcus even commented, “We are falling behind, really alarmingly.”
When asked what the release of Novi, Facebook’s non-private hot wallet, was all about, Marcus assured Bloomberg that Novi was “ready now”. But why it wasn’t published he said:
“We want to make sure that we win people’s trust over a long period of time.”
This statement should be presented here without comment. Over the years, Facebook has shown a consistent interest in compromising the privacy of more people than any other company in the world. The issuance of NFTs and an internal altcoin proof-of-stake via hot wallets is proof that Facebook is functionally a surveillance company.
So what is Diem?
Diem is a simple rebranding of Libra, a centralized proof-of-stake cryptocurrency project launched by Facebook to slowly, numb, and megalomanically solve the world’s money problems. Facebook has “investigated” the blockchain and promised to take over the bankless bank in the world and solve transfer fees through this project for years, but it has not delivered any actual products.
The plans for Diem and Libra were doomed from the start. Facebook’s planned centralized stable coin won’t rely on mining or proof of work, and therefore won’t be any different from any other ICO scam, that is, if they manage to get it to market. The issuance and control of Facebook tokens will effectively make them a tiny digital form of fiat operating on a prosperity concept where stakeholders like Visa and Mastercard pay to run large “nodes” that serve an unclear purpose.
It’s unclear whether Facebook even thought about why they put such a misguided project on a blockchain. There’s nothing about Diem that requires a distributed timestamp server, let alone a central timestamp server. The company would be better off releasing and managing their future digital fiat from a central database from which they could more efficiently monitor Diem owners and sell data about them.
Blockchains outside of Bitcoin are useless because Bitcoin already exists. So far, no distributed proof-of-work system has subsumed Bitcoin in terms of function, acceptance, or decentralization, and every day it becomes less likely that something can. Bitcoin, the original blockchain technology, was invented in part to repair money by taking the influence of centralized companies off of its issuance. The world doesn’t need Facebook or a centralized, controlled, extremely unprivate, approved version of Facebook money.
On the subject of trust, Marcus commented: “I think over time there will be more trustworthy stable coins.”
When asked why Facebook deserves people’s trust and how it would react to criticism that Facebook is not exactly the gold standard for trustworthy companies, Marcus replied, “I’m not advocating blind trust, I’m advocating an opportunity to earn people’s trust. “
Facebook either doesn’t understand the problems with trust-based money systems or ignores them in favor of profit. No part of the interview mentioned that Bitcoin solved the trust problem over a decade ago.
When asked whether Facebook had even considered Bitcoin’s participation in the Novi wallet, Marcus addressed the fluctuations in the price of Bitcoin in US dollars. This is a completely misguided understanding of Bitcoin. The Bitcoin protocol itself is independent of the US dollar. One bitcoin is the same as one bitcoin. Of course, when you compare a scarce asset like Bitcoin to an infinitely bloating asset like Fiat, you will find volatility.
Failed to start
Diem was originally intended as a stable coin connected to a basket of altcoins via Novi. Now Diem is aiming to be a pure dollar stable coin, Marcus told Bloomberg.
He commented that the Novi Hot Wallet may actually have to be launched without Diem, “as a last resort”. But hopefully the two products can be released together as the Facebook leadership seems to believe that both are needed to change the world.
Marcus stated that, as it stands now, Novi is “definitely not ready” to host digital fiat currency at all.
Marcus’ frustration with the Fiat system is that it takes three days to process ACH payments, he told Bloomberg. What he unfortunately does not understand is that there is no final settlement through Fiat.
In the fiat world, there is always an ubiquitous risk of seizure when money is held by third parties and most of the time people don’t even hold their own assets in custody. You need to ask permission from a bank to access it.
With that in mind, it is extremely unlikely that Facebook will make any meaningful change to the world’s monetary landscape or deliver a centralized monetary product that we have never seen before.
Regarding the company’s future operations, Marcus told Bloomberg that as a board member of Diem, he cannot speak for them because board members do not direct or control the affairs of Diem.
According to Business Insider, Facebook’s crypto chief says the company is considering “building NFT-related features” on Diem.
“We are really well positioned for that,” David Marcus told Bloomberg on Tuesday.
The project is apparently too early in development for Marcus to detail Facebook’s NFT product plans, but assured Bloomberg that the company’s “developers are on the case”.
“We’re definitely thinking about it,” he said. “It really is an area worth exploring and one where we can make a positive impact for both creators and consumers.”
Are NFTs still a trend? For years Facebook has missed opportunities to either buy Bitcoin or launch an ICO but not even sell an NFT? Shouldn’t Facebook be a tech company?
It’s not complicated. The creation and sale of NFT is the responsibility of middle school students. Granted, there is absolutely no logical, valid use case for blockchains outside of Bitcoin, Facebook just doesn’t get it, and not only have they missed the boat, they can’t even get close to the coast of breakthrough money technology.
NFTs are functional digital arrows that show an artist’s signature, coupled with a buyer’s information, on a timestamped JPEG. Sure, many digital creators have used the fad effectively and banked, but in the end, many creators sell whatever they brought in from these pump-and-dump systems for Bitcoin if they want to keep the fortune or it for it Sell fiat when they are completely out of reach.
The problem with NFTs is that you cannot bind digital objects to the real world without human intervention. Bitcoin doesn’t even attempt to assign ownership in the real world that way. Bitcoin is an elegant solution to this oracle problem. Bitcoin has private, separate digital addresses that are secured by cryptography. As a human, you either have access to these addresses and therefore control the unspent bitcoins that they represent, or you don’t.