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Facebook’s Libra co-creator: Social, financial data will remain separate - ComputerWorld

Facebook’s Libra co-creator: Social, financial data will remain separate - ComputerWorld | The CYDigital Blog | Scoop.it
The co-creator of Facebook's Libra says that once the blockchain-based digital currency is launched users' social media information – and financial data tied to the stablecoin – will not be connected in any way.

Christian Catalini, the head economist at Calibra, the Facebook subsidiary in charge of the launch of Libra and its associated online digital wallet, said that from the beginning the plan for the cash-backed cryptocurrency was to profit from advertising and not the sale of private data.
CYDigital/marteq.io's insight:

But can it be connected? If they're deploying blockchain, then yes.

 

Learn why blockchain is the next step for MarTech. Read the white paper: https://www.marteq.io/#7 #martech #marketing #adtech

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Inside Facebook’s Botched Attempt to Start a New Cryptocurrency - WSJ

Inside Facebook’s Botched Attempt to Start a New Cryptocurrency - WSJ | The CYDigital Blog | Scoop.it
With libra, the social-media giant promised to change payments world-wide. Instead, major partners bolted after lawmakers and regulators challenged its plans, an early sign of how Washington is putting Facebook on a tight leash.
CYDigital/marteq.io's insight:

Again, we are not surprised: it was a massive intrusion into the individual's privacy.

 

Curated by CYDigital: Empowering Marketers, One Blockchain at a Time https://cyd.digital #zeropartydata #martech

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Facebook 2020 Launch of Libra Cryptocurrency in Doubt - The Blockchain

Faceook CEO Mark Zuckerberg has hinted that the 2020 launch of Libra is not written in stone in a recent interview with Nikkei Asian Review. When asked directly about the 2020 launch he was ambiguous.  

CYDigital/marteq.io's insight:

It'll be a slow roll. Curated by CYDigital: enabling Marketers to discover extraordinary opportunities from their data https://cyd.digital

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Libra: What’s Underneath? - John Rizzo, Co-Founder & CTO, CYDigital

Over the last week or so we have heard quite a bit about what Facebook’s Libra and Calibra are and how it all works. We have heard about the value it will bring to the unbanked and how it will lower the cost of transactions. We have heard how the formation of Calibra will protect users’ transaction data from being collected. We have heard about all the large companies involved. On the other hand there have been a plethora of articles about how Libra is neither anonymous nor decentralized, two very important qualities of a cryptocurrency. But what is the impact of Libra and Calibra on the world of cryptocurrency?

 

How Does Libra Generate Revenue?

 

There are three pieces to Facebook’s entrée into the world of “cryptocurrency:” the currency Libra, the entity charged with managing the wallets (and more) called Calibra, and the Libra Association, a group of companies that Facebook has gathered together to support Libra.

 

The Libra Association is made up of 29+ companies, each with one vote (what they will be voting on we don’t know). What is pertinent is the level of investment from each company. As noted on the Libra Association site, the minimum investment is 10 million USD. We have also been told that that the Association will generate revenue from the interest on the fiat currency , and on transaction fees which they have said will be a fraction of a cent. Let’s cover the transaction fees first.

 

 

Since Libra is a permissioned blockchain, only Libra Association members can verify transactions. The members with the most processing power will earn the most transaction fees. Don’t fall into the thinking that since the transaction fees are so small that this will be an insignificant number: with millions of transactions happening every day they will generate a significant revenue stream. Initially, the system is built to handle a 1000 transactions per second. I believe that within six months (or less) of launch they will be running at full capacity. If the transaction fee is a half cent, that means $5.00 per second which equates to about 160 million USD a year, just at initial capacity. So if you assume 29 companies invest 10MM USD each, that 290MM USD gives the Association 160MM USD return in one year. Not bad. But that’s a minimum number. The forecasted number of Libra users worldwide is 2.1B, which means that the initial system will be able to handle one transaction per user every 25 days, and it’s safe to say that each user will utilize the system with greater frequency than once every 25 days! Even at a reasonable infrequent once every 5 days returns 600MM USD to the Association.

 

As stated, the Libra members will also generate revenue from the interest on the fiat held in reserve to cover the outstanding Libra. Here is how this works:

  • you buy Libra and that Libra is minted for you;
  • the money you used to buy the Libra is held to cover the cash out of that Libra;
  • when Libra is cashed out (turned back into fiat) the Libra is burned (deleted).

As long as Libra is being passed around from user to user, the fiat used to purchase  Libra is earning interest for the Libra members.  The potential is enormous. If 2.1B users have 5 USD of Libra on hand at all times throughout the year (what I think is a conservative estimate), then based on the Fed’s overnight rate, the Association could earn an additional 250MM USD over one year. You could do worse.

 

Consider This

 

When your money is in the bank, the bank pays interest to you. They also charge transaction fees which are taken on by the merchant but often reflected in the cost of goods. This means the increased cost in goods due to credit card and debit fees is built into most goods from merchants, so even if you pay by plastic, cash, digital, or libra you are still taking on the increased cost. So yes, Libra brings lower transaction fees (which won’t necessarily mean lower cost of goods) for the digital elite but Libra member companies keep all the interest on your money.  It should be noted that the Libra transaction fee will be far lower than services like Venmo which currently is 3% for credit card payment and $0.25 to transfer from Venmo to bank.

 

 

So far, we have covered two earning events, interest and transaction fees. What will be the long-term effects on these? What happens when traditional banks take large losses in these areas as Libra adoption rises? Don’t get me wrong, I am not a fan of big banks, but I am a fan of people having jobs. Banks will need to close more locations, raise transaction fees, and adjust the terms of interest given. Libra could very well end up costing people and countries a lot of money in the long run. Will it cost jobs? Most likely many jobs will be lost. Will it create jobs? Very few.

 

At Whom is Libra Really Targeted?

 

Most of the materials like to tout how Libra will be a boon for the unbanked. But in reality, this is mostly a convenience service for the Uber generation, and maybe a cheap way to move large sums of money for large corporations and wealthy individuals.

 

Who are the unbanked? This term seems to have two different meanings depending on if you are discussing developed or underdeveloped nations. "Unbanked" is a slang term for adults who do not use banks or banking institutions in any capacity. The US based unbanked generally pay for things in cash or by money orders. They also typically do not have any other type of professional money-related services. In the US, they often take advantage of alternative financial services, such as check-cashing and payday lending, when available to them. There is also a significant number of individuals that choose this to hide illegal monies.

 

The numbers of unbanked are significantly higher in underdeveloped nations. The Global Findex shows 3/4 of the world’s poor do not have bank accounts. And the use of mobile micro payments systems is quite high in places like sub-Saharan Africa where the Internet penetration is only about 36%, translating to about 204 million users. There are many villages where one mobile phone is used to serve many people.

 

Libra says that unbanked people will be able to “go to the corner store” and turn cash into Libra. There are problems with this model. In underdeveloped nations the corner store does not exist, and there is no infrastructure in the far reaches of sub-Saharan Africa to support the model. In under developed nations this becomes a last mile (or hundred miles) issue.

 

Even just looking at developed nations there should be questions on how this will work, e.g., what will the point of exchange, the corner store, charge to conduct these transactions? They will need to have some method of turning cash into Libra in a secure way so that both parties are made whole. The trouble is on the side where the cash is submitted, where the Libra recipient would want their Libra right away, so how does Calibra verify that cash was truly received? The opportunity for fraud when these transactions are done outside a financial institution is large.  I suppose they can start putting up kiosks but that would just further centralize Libra.

 

Your Data, Their Gain

 

Let’s talk about the security of your payment data. It has been stated that Calibra was created to assure that the data of your Libra transactions is kept separate from the data that is collected about you from Facebook services. This is because you will be able to use Libra through Facebook Messenger and WhatsApp. There will also be a crypto wallet available from Calibra. I am sure that most transactions will be via the Facebook services as they become more deeply integrated with services where you will spend your Libra, e.g., Uber, Lyft, and Amazon just to name a few. The assurance that your transaction will be secure from data collection (by the way this does not mean anonymous) pertains to the last part of the transaction itself, meaning the data of the transfer of funds only. All the data about shopping or connecting to a service all the way up until the transaction is all collectable including that you chose to use Libra. This data related to your shopping and service consumption across multiple vendors is incredibly valuable. I would say it is the crown jewel of the whole Libra space. The users will get nothing in return for this data: they won’t get rewarded with discounts, Libra, or cash. But the company collecting this data will drive huge market share and revenues from it. I am guessing that even when the California Consumer Privacy Act (the CCPA) goes live in January that this will be an opt-in service in order to use the convenience of Libra. 

 

In the End…

 

The association earns the transaction fees, interest on users’ money, and very valuable data. The majority of the users, the digitally connected, receive convenience. It is an old story that needs to be flipped.

 

 

https://www.internetworldstats.com/stats1.htm

http://www.worldbank.org/en/news/infographic/2012/04/19/who-are-the-unbanked

https://www.investopedia.com/terms/u/unbanked.asp

https://techcrunch.com/2019/06/18/facebook-libra/

https://libra.org/en-US/

https://calibra.com/

CYDigital/marteq.io's insight:

A review/opinion piece regarding Libra, from our CTO and Co-Founder.

 

Curated by CYDigital: enabling Consumers to capture, share and profit from their data. https://cyd.digital #zeropartydata #dataprivacy #datamonetization

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Facebook’s Libra Is a License to Print Money - WSJ

Facebook’s Libra Is a License to Print Money - WSJ | The CYDigital Blog | Scoop.it
Buy Facebook’s Libra and you are literally giving the social media giant a license to print money, in the form of its new cryptocurrency. A bunch of big companies have agreed to pony up $10 million each to take part, and it is easy to see why: On some reasonable-sounding assumptions about its takeup, it could be insanely profitable in real money, too.

CYDigital/marteq.io's insight:

Q: will shareholders receive an allocation of Libra as a dividend? Regardless, what we're watching is the normalization of cryptocurrency.

 

Curated by CYDigital: enabling Consumers to capture, share and profit from their data. https://cyd.digital #zeropartydata #dataprivacy #datamonetization

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Facebook wants to pay you in exchange for your personal data - TechTrendsKE

Facebook wants to pay you in exchange for your personal data - TechTrendsKE | The CYDigital Blog | Scoop.it
To know if you’re invited to the program you’ll definitely see Facebook ads about the program which you can then sign up and wait for the approval. The rewards will be paid on a monthly basis but the amount of the reward hasn’t been revealed yet.

Whether you’ll decide to join or not it’s all about you. But do you think some good pay is worth your private activities on your phone?

The program going by the name “Study” will only be available in India and US markets. Possibly Facebook will rollout the program in other parts too since Study is just one of the many “Market research programs” the company will launch.
CYDigital/marteq.io's insight:

Watch for it.

 

Curated by CYDigital: enabling Consumers to capture, share and profit from their data. https://cyd.digital #zeropartydata #dataprivacy #datamonetization

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Facebook's Project Libra: What It Means for Advertising - Fortune

Facebook's Project Libra: What It Means for Advertising - Fortune | The CYDigital Blog | Scoop.it
For starters, Facebook will be able to use Calibra, its new digital wallet, to compete with the likes of PayPal’s digital payment app Venmo, while also offering cheaper cross-border payments. Facebook’s new currency, called Libra, could also help the company save on transaction costs. But if you had to guess Facebook’s main motive, the best answer is that Project Libra will help the social network do what it does best: collect data and sell advertising.

Specifically, the new currency gives Facebook an opportunity to bolt a payment service on top of Instagram and WhatsApp, and let customers make instant purchases in response to ads they see on those platforms.

Marketing and e-commerce executives tell Fortune this will be a boon for Facebook and its advertisers. According to Will Luttrell, CEO of payments startup Amino, the digital currency will let the company better compete with Amazon’s growing ad business. He predicts that Facebook will have unprecedented insight into when a user makes a purchase in response to an ad—delivering specific “return on investment” metrics that marketers crave.
CYDigital/marteq.io's insight:

This is ALL ABOUT DATA COLLECTION AND CONTROL. Make no mistake: Libra is the key to understand everything the FB user is doing, tying all Calibra activity into one big butt profile for each of us.

 

Curated by CYDigital: enabling Consumers to capture, share and profit from their data. https://cyd.digital #zeropartydata #dataprivacy #datamonetization

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As Facebook’s Libra Provokes A Slew of Questions, An Expert Struggles With the Coin’s ‘Justification’ –

Tim Sloane, who follows digital currencies as vice president for payments innovation at Mercator Advisory Group, Maynard Mass, adds that Facebook’s direction of the project, which includes involvement by Mastercard Inc., PayPal Holdings Inc., Stripe Inc., Visa Inc., and at least eight other companies, could prove to be a liability rather than an asset. While the huge social-networking company brings a base of 2.4 billion users worldwide, it has attracted negative attention in recent months for questionable privacy practices. “They also have an extraordinary level of regulatory scrutiny that makes the regulatory risk much worse,” Sloane notes in an email message.

The Libra consortium’s white paper this week should detail how its currency will work when it launches next year. Libra is expected to be a so-called stablecoin tied to a basket of fiat currencies, which might make it more suitable for online and physical commerce with merchants. Cryptocurrencies like Bitcoin have been criticized for exaggerated swings in value that make them less appealing to merchants.
CYDigital/marteq.io's insight:

The issues are numerous: greater loss of privacy, a globalization of a currency, a consortium of monoliths controlling all the data, etc. But Libra will bring cryptocurrency and the digital wallet to the masses. Q: what will the SEC do to stop this train?

 

Curated by CYDigital: enabling Consumers to capture, share and profit from their data. https://cyd.digital #zeropartydata #dataprivacy #datamonetization

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Facebook's cryptocurrency Libra unveiled - Fox Business

Facebook's cryptocurrency Libra unveiled - Fox Business | The CYDigital Blog | Scoop.it
Facebook Opens a New Window.  is rolling out a new cryptocurrency Opens a New Window. platform that could provide the embattled social media giant with a new revenue stream of historic proportions as it contends with a possible federal antitrust probe and continued scrutiny over its data privacy practices.

Mark Zuckerberg’s company announced on Tuesday the creation of Calibra, a subsidiary that will oversee Facebook's interests in Libra, including a digital wallet for the new cryptocurrency. Rather than exercise direct control over Libra, Facebook will partner with investors such as Visa, PayPal and Uber as members of the Libra Association, an independent entity that will manage the cryptocurrency.

The digital wallet will be available in Messenger, WhatsApp and as a standalone app. It is expected to launch in 2020, according to a company statement.
CYDigital/marteq.io's insight:
  1. Anyone remember when the Hunt brothers tried to corner the silver market ostensibly to create a currency? Didn't end well.
  2. Libra will deliver digital wallets to the masses.

 

Curated by CYDigital: enabling Consumers to capture, share and profit from their data. https://cyd.digital #zeropartydata #dataprivacy #datamonetization

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Facebook must proceed with privacy breach suit linked to Cambridge Analytica, judge rules - Japan Times

Facebook must proceed with privacy breach suit linked to Cambridge Analytica, judge rules - Japan Times | The CYDigital Blog | Scoop.it
Facebook Inc. must defend itself in a District of Columbia lawsuit accusing the social network of failing to safeguard users’ personal data and allowing a U.K. political consulting firm to mine the information for the benefit of Donald Trump’s 2016 presidential campaign.

The decision on Friday by D.C. Superior Court Judge Fern Saddler adds to the pressure on the company to change how it handles subscribers’ personal information. Facebook has said it may cost as much as $5 billion to resolve a Federal Trade Commission probe of its privacy practices. The Menlo Park, California-based company also faces a consumer class action over those practices and investigations in several states.

Facebook had argued the court should stay the matter because of other cases, but it now needs to produce documents for the D.C. judge.
CYDigital/marteq.io's insight:

This didn't receive much press, but significant nevertheless.

 

Curated by CYDigital: enabling Consumers to capture, share and profit from their data. https://cyd.digital #zeropartydata #dataprivacy

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Facebook might have gotten a makeover, but don't be fooled, it's still collecting your data - SmartCompany

Facebook might have gotten a makeover, but don't be fooled, it's still collecting your data - SmartCompany | The CYDigital Blog | Scoop.it
Have you noticed your Facebook feed looks different lately? According to Facebook’s chief executive officer Mark Zuckerberg, it’s “the biggest change to the app and website in the last five years”.

This cosmetic change could represent the first step in Facebook’s ‘privacy pivot’, announced in March 2019. But we’re still waiting to hear exactly what will be happening with our data.

In response to Senator Hawley, Kevin Martin, vice president of US public policy at Facebook said: “There are still many open questions about what metadata we will retain and how it may be used. We’ve committed to consult safety and privacy experts, law enforcement, and governments on the best way forward.”
CYDigital/marteq.io's insight:

Only legislation will force change.

 

Curated by CYDigital: enabling Consumers to capture, share and profit from their data. https://cyd.digital #zeropartydata #dataprivacy

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Facebook plans to launch 'GlobalCoin' cryptocurrency in 2020 | Technology | The Guardian

Facebook plans to launch 'GlobalCoin' cryptocurrency in 2020 | Technology | The Guardian | The CYDigital Blog | Scoop.it
Facebook is planning to launch its own cryptocurrency in early 2020, allowing users to make digital payments in a dozen countries.

The currency, dubbed GlobalCoin, would enable Facebook’s 2.4 billion monthly users to change dollars and other international currencies into its digital coins. The coins could then be used to buy things on the internet and in shops and other outlets, or to transfer money without needing a bank account.

In order to try to stabilise the digital currency the company is looking to peg its value to a basket of established currencies, including the US dollar, the euro and the Japanese yen.
CYDigital/marteq.io's insight:

A global currency run by FB that can track everything you spend and everything you sell. Think about that!

 

Curated by CYDigital: enabling Consumers to capture, share and profit from their data. https://cyd.digital #zeropartydata #dataprivacy

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Facebook still wants your data - Phys.org

Facebook still wants your data - Phys.org | The CYDigital Blog | Scoop.it
The square logo is now a circle. There's a lot of white space, and someone KonMari'd the title bar.

Shopping within Facebook is prioritised through the Marketplace feed, and you can watch shows and online videos in groups through the Watch function.

Facebook Messenger loads faster, the interface is cleaner and a dating service may soon be available in Australia.

What hasn't changed is the core product: the capacity for Facebook to collect platform data and generate behavioural inferences for advertisers.
CYDigital/marteq.io's insight:

FB cannot change: it'll kill their business model.

 

Curated by CYDigital: enabling Consumers to capture, share and profit from their data. https://cyd.digital #zeropartydata #dataprivacy

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Facebook lets select researchers access 'privacy-protected' data - VentureBeat

Facebook lets select researchers access 'privacy-protected' data - VentureBeat | The CYDigital Blog | Scoop.it
Facebook today announced the recipients of a grant that offers access to “privacy-protected” data from a fraction of the network’s billions of monthly active users around the world. The more than 60 researchers from 30 institutions across 11 countries were selected by two partner organizations, Social Science One and the Social Science Research Council (SSRC). Facebook says it won’t play a role in directing their findings in order to ensure the independence of the research.
CYDigital/marteq.io's insight:

Timing, timing, timing.

 

Curated by CYDigital: enabling Consumers to capture, share and profit from their data. https://cyd.digital. Follow this blog: https://www.scoop.it/t/the-cydigital-blog.

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