Facebook’s Libra Currency Excites but Security Concerns Remain
Since 2017, cryptocurrency has experienced both the crazy highs and the crazy lows with fortunes being made and lost overnight. That volatility is one of the main reasons why cryptocurrency has been relatively slow to gain mass adoption. Another concern that much of the public and regulators have regarding crypto relates to security and privacy rights. Although cryptocurrency is still at the very beginning of its technology life cycle, something big will need to come along to push adoption forward. That “something big” could come in the form of Facebook’s recently announced Libra currency.
Libra Currency Has Potential
Facebook finally announced the details of its soon-to-be cryptocurrency called Libra. The currency will allow consumers to purchase products or transfer money with extremely low fees. Consumers will supposedly be able to pseudonymously buy or sell their Libra for products on the web or at brick and mortar locations such as supermarkets. Transactions will be processed by using third-party wallet apps such as Facebook’s Calibra wallet. The currency is expected to go live during the first half of 2020.
One of the most exciting aspects of this new currency is the global reach of Facebook and its various apps like WhatsApp. Based off Facebook’s May statistics, the social media platform has 2.38 billion monthly active users. WhatsApp also boats an impressive user base.
When cryptocurrency first began, the dream for many was that Bitcoin, or another option, could serve as a universal currency option for many around the world. The global banking industry makes a lot of money from remittances fees and exchange rate markups. Currently, just 1 out of 43 providers moves money abroad on the blockchain. Imagine if all the major providers did that so as to reduce fees for consumers around the world. That would result in tremendous savings that could then be spent on other services/products to stimulate growth.
Facebook Libra has the potential to get the ball rolling. But the question is at what cost?
Security and Privacy Concerns Remain
There is no doubt that cryptocurrency will have a big impact on the future of finance. But, in the meantime, early adopters will have to deal with the many risks that are currently present in the world of crypto. As it relates to Facebook, the primary concerns revolve around hacking and data breaches.
During the last few years, data protection has emerged as a vitally important issue for both the public and regulatory bodies. This is especially true in the USA where quite a few hacks and data breaches have been publicized resulting in the government’s involvement. A few of those incidents include:
- September 2017 Equifax data breach that affected 148 million users. The U.S. House Oversight Committee report announced that the breach was entirely preventable.
- November 2018 Starwood data theft that included the names, phone numbers, email addresses, dates of birth, and passport information of the company’s 500+ million guests.
Facebook has its own share of missteps as well. The most well-known incident involved Russian operatives using targeted ads on the popular social media platform in order to affect the U.S. election results. Then, there was the incident involving Cambridge Analytica. Because of large GOP investments, the firm was able to harvest private information from more than 87 million Facebook users. With this information at the firm’s disposal, their employees were able to develop techniques to work on President Trump’s 2016 Presidential campaign.
One would think that those incidents would be enough of a kick to the butt for Facebook to wake up and fix the issues. But that hasn’t been the case. In September 2018, Facebook announced that an attack on its computer network exposed the personal information of nearly 50 million users. Hackers were apparently able to exploit a feature in Facebook’s code to gain access to user accounts.
According to VPNpro.com, cybersecurity expert Laura K. Inamedinova had this to say about the recent surge of data breaches: “Most data breaches are the result of human error, which inevitably makes vulnerable team members the focal points of the majority of cyber-attacks. It’s high time for business owners to start investing in company-wide cybersecurity training programs.”
With roughly 51% of small businesses not allocating any resources to cybersecurity risk mitigation, it’s no wonder that the Congress has had to step in and get involved.
There has been a lot of excitement and enthusiasm regarding Facebook’s entry into cryptocurrency. Libra will have the potential to make a huge difference in terms of crypto adoption. But that potential will only happen if Facebook steps up its efforts regarding data protection. There is no room for error here and hopefully Facebook will take the next 6-12 months to ensure that its users will be protected.
Featured image courtesy of Shutterstock.