Editor's note: This article comes from the WeChat public accountEditor's note: This article comes from the WeChat public account"Silicon Valley Insight" (ID: guigudiyixian)
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After Zuckerberg was "bombed" by members of the US Congress last year about the data abuse exposed by Facebook's cooperation with Cambridge Analytica, today, Facebook was "summoned" again.
This time, the Libra digital currency and data privacy issues were the subject of the hearing.
(David Marcus at the hearing, pictured from TechCrunch)
(David Marcus at the hearing, pictured from TechCrunch)
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The scene of the hearing: full of firepower and tense atmosphere
The atmosphere at the hearing can be described as "tragic". Members of the U.S. Senate Banking Committee publicly expressed "Facebook is dangerous", "No one likes Zuckerberg", "No one here wants to trust you anymore", "Facebook To get into payments is to make an already too strong company stronger" and other rhetoric has been repeated. Key questions lawmakers asked Marcus included:
In view of the fact that Facebook has repeatedly manipulated user privacy data, disregarded news professionalism, and manipulated user emotions to sell advertisements and other "black history", why do you ask us to continue to trust you when you are making financial payments that most need trust? ? Which of the problems that you promised to work hard to solve in the past has actually been solved? If you trust Libra, are you personally willing to put all your assets and salary on it?
Why put Libra's headquarters in Switzerland instead of the United States? How does Libra effectively protect consumer data, and how does it deal with money laundering and terrorist financing, fraud and misappropriation? In particular, Libra is cross-border. If the scammer is from Spain, the consequence of the fraud is in another country. Which country's laws do you have to abide by to protect users? Which legal department should the user call?
Will Facebook allow other digital wallets to be used on the platform? How to deal with competitors?
What is Libra's business model? Who are the committees in charge of?
Trust issues. People don't have to trust Facebook because it's just one of the 28 current members of the Libra Foundation, and maybe one of the 100 or more council members in the future. Facebook has only one vote, Libra is built on an open source system, and Facebook does not want and will not control it.
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(28 members of the existing Libra Foundation)
Not only that, Marcus also expressed his willingness to put his personal assets and salary on Libra to show his trust in the system.
Additionally, other reasons that Marcus gave repeatedly throughout, that Facebook should be trusted to do this are:
"Facebook chose to do this not only because it has the resources and ability to do it, but also because it thinks Libra can be good for the world. Imagine a daughter in another country who wants to send money to her mother, and now has to pay high transfer fees. It will take a long time. And Libra will allow people to use their mobile phones to transfer money quickly, safely and at low cost no matter where they are.”
Marcus also believes that digital currency is already a major trend, and the United States has fallen behind in the field of real-time payment. If the United States no longer actively joins and responds, it will risk falling behind in the competition of blockchain technology, and other countries will If it rises, the United States will continue to lag behind.
The benefits of Libra are not limited to this, Marcus also believes that Libra "can better help more than 90 million business users on Facebook's existing platform reduce payment costs, thereby creating more jobs."
Regulatory and User Data Protection | “The Libra Foundation chose to be based in Switzerland in absolutely no way to escape any liability, in no way to evade US regulations...although it is indeed registered in Switzerland, it is also registered with FinCEN (Financial Crimes Enforcement Network) Registered under the management of ".
As for why register in Switzerland? Marcus's answer is that because of Switzerland's "advantages in the international financial field...the World Trade Organization, the Bank for International Settlements are all in Switzerland."
At the same time, Marcus also emphasized that Libra will not be released before addressing the concerns of the U.S. regulatory authorities, and the U.S. should lead the world in making digital currency rules.
Whether it will be used for illegal activities such as money laundering or drug trading | "Libra is not an anonymous digital currency, and users are not anonymous. To use its digital wallet service, users need to upload real identity authentication documents supported by the government. Libra is working with the US FinCEN (Financial Crimes Enforcement Network) work together to address this.”
The Libra Association does not have access to consumer users. The Libra system itself will have high-standard security coding, and financial education and consensus principles on how to use digital currency will also be embedded in Libra. Calibra, the Libra crypto wallet, does not "knowingly" directly sell or directly monetize users' data, and if it partners with other financial institutions to provide additional financial services, it will ask users to agree to use the data for this purpose.
Business model and whether it is a monopoly | Libra’s income will mainly come from two aspects: first, the platform benefits brought about by the faster and low-cost payment chain of more than 90 million commercial users on the existing Facebook platform; second, cooperation with other financial institutions Proceeds from the provision of additional financial services.
But Marcus also said that in Messenger and Whatsapp, Facebook will only choose to integrate its own Calibra cryptocurrency wallet and refuse to embed competing wallets in it. This exclusivity could give Calibra an edge over banks, PayPal, Coinbase, or any other potential wallet developer, given the huge user base of Facebook's various apps.
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Is Facebook worth being trusted again?
What Silicon Valley Insight felt most deeply after the entire hearing was that members of the U.S. Senate Banking Committee repeatedly talked about "we can no longer trust Facebook".
CoinDesk, an authoritative US blockchain media, issued an article saying that the members of the hearing asked more questions about Facebook itself, but few questions about encryption technology and blockchain technology itself. The author of the article believes that this may reflect the Lawmakers distrust Facebook more than blockchain technology itself.
Sherrod Brown, who repeatedly raised the issue of trust, also admitted in a subsequent interview with reporters that it is difficult for Americans to trust a giant company. "Americans don't trust Wall Street, and they now list these big technology companies as 'companions'.""
Marcus also tweeted after the hearing and re-emphasized: "Until we fully resolve the regulator's issues, we will not launch Libra. We also recognize that for the Calibra wallet, trust is crucial.
Interestingly, regarding the supervision of Libra, Marcus mentioned that since the Libra Foundation is registered in Switzerland, the issue of user data privacy will naturally be subject to the supervision of the Swiss Federal Data Protection and Information Commissioner (FDPIC).
However, Hugo Wyler, a spokesperson for FDPIC, said in an interview with the US media CNBC: "Until today, we have not communicated with the promoters of Libra. We hope that Facebook or other promoters of Libra will provide us with specific information when the time is right." Authentic information. Only in this way can we check the extent of our legal advice and monitoring capabilities".
Silicon Valley Insights consulted some blockchain practitioners in Silicon Valley on the hot spots of Libra hearings.
A friend who operates blockchain nodes mentioned that from a technical point of view, Libra uses the PoS consensus mechanism, which will bring a decentralized network. The realization of decentralization lies in the incentives for different types of nodes to obtain economic rewards for their participation in maintaining the network and confirming transactions. As for how to formulate the rate of return, it is still unknown whether the rules are decided by all members of the foundation by voting or by giants like Facebook.
But looking at it this way, if Libra does not charge high handling fees in the future, it seems that it can only rely on "selling data" to realize the operation of the support system, which will return to the issue that they are most questioned by the society and law enforcement.
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Libra vs. China: A Global Challenge for Digital Currencies?
At this hearing, Marcus put forward that "the United States has fallen behind in real-time payment, and if the United States does not take the initiative to do it, it is likely to fall behind", which is easily reminiscent of the ubiquitous mobile phones in China. mobile payment.
The Libra proposed by Facebook is also similar to WeChat and Alipay in China through the convenient payment of merchants on the service platform and the profit model of cooperating with third-party financial institutions to provide more services. As far as real-time payment is concerned, WeChat is a successful example of "social + payment". However, WeChat is only dominated by domestic users. After all, it is "only payment, not cross-border", while global social networking is Facebook's best advantage.
So, will Libra enter China?
It's possible, but very unlikely. In China, the only thing that can have enough volume to compete with it is WeChat. Although it is not international enough, and the user base is less than half of the total number of Facebook, the application scenarios that can be penetrated by WeChat are very strong. However, all payments on WeChat must rely on banks and directly use legal tender. The banking system undertakes the two major businesses of identity authentication and transfer settlement for WeChat payment.
It seems that no matter how powerful WeChat’s social networking is, it has not yet been able to shake the traditional financial model, but Libra poses a direct threat to banks.
Are you optimistic about Libra? What do you think of this Libra hearing? Welcome to leave a message to discuss!
