PROMETHEAN ANALYSIS OF LIBRA – Lucky Goraya
I will start off by saying that Libra is in no way a cryptocurrency. It is a centralized digital asset and it is backed by Fiat.
This puts it into a small group of “stable” coins that includes Tether and TrueUSD. These “stable” coins generally try to sell the fact that they are pegged to fiat currencies and therefore have inherent value.
THIS IS A COMPLETE LIE.
The reason BTC and other cryptocurrencies (real, decentralized cryptocurrencies) really took a hold (as a matter of opinion) was the growing mistrust of Federal Reserve Systems, Central Banks and the IMF. The truth of the matter is systems like these are manipulated they are susceptible to inflation and volatility. Governments and big banks create and burst bubbles all the time, and inflation is unavoidable in such systems.
Now, with inflation rates as they are and have been for the last decade (they won’t change by much unless something big happens) within 25 years the value of Libra will be halved. This quarter century approximation is based on the “official” numbers, but most likely the value will halve a lot quicker.
The next thing that i think is very important to consider is that Libra will be operating pretty much exactly like traditional banking systems, using a Reserve system that the official documentation claims that they will invest only in debt from strong governments that are unlikely to experience “high inflation,” and a low likelihood of defaulting. The Libra Association intends to ” rely on short-dated securities issued by these governments, that are all traded in liquid markets that regularly accommodate daily trading volume in the tens or even hundreds of billions.” This paired with the fact that they intend to diversify through agreements of multiple governments may present an illusion of stability — essentially by providing a money system people are used to.
HUGE POTENTIAL PROBLEMS I CAN SEE ARISING:
- When people decide that Libra is a shitcoin, and not the next Bitcoin, the Libra Association will not have enough Fiat to buy back all the Libra pushed out as their money will be tied up in securities, even if they are very short term if such a “cash in” or “bank run” occurs, they may have to sell at a loss if they decide to sell at all.
- Facebook already has more information on you than is acceptable, and now your financials too?
- If we can’t trust the IMF or Banksters — how on Earth is anyone trusting Zuckerberg of all people?
I have not even mentioned the worst thing that strikes me as reason number one to stay away from Libra.
IT CAN BE MINTED AND BURNED AT THE WILL OF THE LIBRA ASSOCIATION.
Conventional cryptocurrencies contain information such as exactly how much of a digital asset will exist in their genesis block, their first transaction. This market cap limit places an inherent value — A REAL INHERENT VALUE; on these commodities. Mining or staking take up resources; it is not something for nothing. Minting is a clear enough word; it is the creation of new tokens but burning is a new one to me in the context of digital assets.
THE LIBRA FOUNDATION CAN CREATE AND DESTROY AS MUCH LIBRA AS THEY WANT, WHENEVER THEY WANT.
To clarify; this also means that Libra will be doubly susceptible to inflation. To the inflation of the Fiat currencies it is backed by AND to its own internal inflation.
To add insult to injury Libra can be destroyed; what if Zuckerberg decides that your Libra wallet has a little too much coin?
Published at Wed, 03 Jul 2019 11:20:23 +0000
