FT: Zuckerberg, Winklevoss Twins Discuss New Cryptocurrency
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Thread: FT: Zuckerberg, Winklevoss Twins Discuss New Cryptocurrency

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    Default FT: Zuckerberg, Winklevoss Twins Discuss New Cryptocurrency

    Lionel Laurent, Bloomberg Opinion
    24 May 2019


    Sometimes even bitter billionaire rivals need each other. Mark Zuckerberg and the Winklevoss twins fell out over the founding of Facebook Inc. but they appear to have buried the hatchet over the blockchain.

    According to the Financial Times, Gemini, the crypto exchange founded by the “Winklevii,” has held talks with Facebook over the social network’s plans to roll out its own crypto-currency, which would probably be used to make payments and purchases across Zuckerberg’s empire. The talks suggest something “bigger and more open” than previously imagined by the company, according to the FT: A liquid, tradeable currency that’s used far and wide.

    How far, and how wide? Well, in terms of ambition, it’s not far off something Dr. Evil from the Austin Powers movies might come up with. According to the BBC, Facebook’s crypto-based system – humbly labeled “GlobalCoin” – will be rolled out next year across about a dozen countries. That’s more than the euro zone started with.

    Unlike Bitcoin, Facebook’s aim is not to bring down the established financial system, but to co-opt it. The social network is said to be seeking the blessing of governments, central banks and regulators. It also wants to partner with brokers and money-transfer firms, and to strike deals with online merchants.

    Zuckerberg will obviously do his best to make his new project sound as trustworthy and above-board as possible when it’s finally launched. GlobalCoin is said to be a so-called “stablecoin,” which are usually pegged to a major currency like the U.S. dollar to minimize volatility. So, in theory, one of Facebook’s tokens would never be more valuable than the dollar that backs it – unlike the boom-and-bust prices of Bitcoin. Presumably, Facebook would also keep things plain-vanilla at first in terms of the digital currency’s uses, offering simple retail deals or money transfers to minimize the risk of loss for its more than 2 billion users.

    Regulators and politicians are no dummies, though. This is the kind of move that would turn Facebook from an incredibly powerful centralized network tracking its users’ behavior for the benefit of advertisers into one that also knows where and how they spend their money. Transaction data is a powerful tool, one that’s key to a lot of fintech companies’ bubbly valuations. In the hands of a business with Facebook’s reach, the unintended consequences could be huge. U.S. Senators are right to be asking tough questions already about the implications for privacy, potential data breaches, and credit scoring. If Facebook starts gauging its users’ creditworthiness, it will need tough regulation.

    Ironically, there seems to be nothing of Bitcoin’s decentralized libertarian principles in this currency for billions that would ultimately be controlled by one company – and one man. Facebook’s co-founder Chris Hughes this month accused Zuckerberg of having “near-unilateral” power over the social network through his ownership of 60% of the voting rights, suggesting the company board is accountable to him rather than the reverse. Calls to break up Facebook, or at least take another look at the monopoly power of the firm, will only get louder if GlobalCoin becomes reality.

    Judging by early reports, then, this project looks like a dream for an over-mighty corporation, and a nightmare for the crypto true believers. We’ve had companies issue their own currency in the past – think of the East India Company under the British Empire – but nothing quite like this. Whether the U.S. government views it as a rival to or extension of the U.S. dollar’s global dominance will be crucial. The relationship status between Big Tech and politics is about to get even more complicated.


    Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.




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    A "secret" to happiness and security is to "control your environment" as much as possible. The ultra wealthy create their own environment. Whether it is compatible or clashes with outside realities is another question.

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    I've always been against the fact that every money transaction is traced, and the blind (phone zombified) new generation is all for it. Let's see how they feel when real "tangible" money is completely gone and you can't even buy a pack of gum without the government knowing it. That is the kind of control they want. Imagine if for any reason they decide to stop everything, you wouldn't have a friggin penny and you wouldn't be able to get anything till they feel you can have your money again.... well your virtual money never was yours to start with since they control it. No more stack or cushion in the safe for rainy days, no more under the table great deal repairs on your house from a friend you know, every tiny transaction will pay taxes, no more "cash" reduced prices.

    Virtual money is great that way and that's why the gov. and the super rich loves it.
    Real money reminds me a little of president Trump, everybody is bitching about the bad things but you will know you had something great when it's gone
    Last edited by Kobs; 05-26-2019 at 05:11 AM.
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    Quote Originally Posted by Kobs View Post
    ...you will know you had something great when it's gone
    Very true.

    So, is it money? Is it an investment? Is it a coupon?

    Is Amazon going to be worried about it? Will Amazon start a bank to compete?

    --Wag--
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    And like all banks they will be audited and regulated. What will happen if the US forces big banks to fall back to the states? Who would insure a global bank? To many questions .

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    Quote Originally Posted by Zhills View Post
    And like all banks they will be audited and regulated. What will happen if the US forces big banks to fall back to the states? Who would insure a global bank? To many questions .
    Reminds m of another thing, star trek, everybody works, nobody really gets paid, you have the illusion that you can buy stuff but in reality there is no money involved, just numbers here and there transferring from one hand (phone) to the other. no one has to insure what no one has because there will be just a few peoples who will have control of the illusion and all the gold. We're talking about a society without currency, just transfers, so there's no limit to the amount floating around. As long as everybody works and each person is transferred a number, everyone is happy in the illusion and life goes on. That will be the global bank
    Last edited by Kobs; 05-26-2019 at 08:08 AM.
    ​I WILL DO WHAT I HAVE TO AND DEAL WITH THE CONSEQUENCES OF MY ACTIONS LATER

    They say time flies when you're having fun, so now that i'm old, how come i'm not having fun and time flies faster than when I had fun as a kid ?

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    So good old Zuck, now that he controls what you see in Facebook, also want to control how you use your money. You know, I worry about the take over by a Communist system, but this may be worse...........................
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    What's to stop Zuckenburger from magically adding a billion or two of crypto-coins into his account? ..... while everyone else has to trade cold hard cash for their crypto-coins. Crypto-currency is a back-door license to print money. Whoever controls the system can print as much or as little has they want. If you buy into it, you're essentially buying into a ponzie scheme.
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