Goldbug Schiff: Facebook’s Crypto Will be Bad for Bitcoin (BTC)
Facebook is Bad for Bitcoin?
June 18th is nearing, and that means that Facebook’s crypto asset, expected to be nothing like Bitcoin, is on the verge of becoming full public knowledge. For those who missed the memo, the next week is expected to see the Silicon Valley darling release a white paper regarding its first real foray into the blockchain ecosystem.
As a result of this rapidly approaching date, industry commentators have come out of the woodwork to express their thoughts on the subject matter.
In a recent tweet, Peter Schiff, a prominent gold investor and libertarian-leaning economist, ventured that Facebook’s latest project, dubbed “Globalcoin” and/or “Libra”, will be “bad news” for Bitcoin. Schiff, who has debated crypto pundits like Erik Voorhees and Barry Silbert previously, adds that Facebook will be targeting the unbanked in “nations with high inflation (Venezuela, for instance)”, thus threatening the biggest medium of potential BTC adoption.
The prominent cryptocurrency critic, who sides with the belief that BTC has no intrinsic value as is not better than hard gold, adds that Libra will likely be much stabler, cheaper, and more easy-to-use than Bitcoin. Indeed, there are reports and individuals stating that the Facebook play will involve very low fees, fast transfer times, and a level of stability not seen with Bitcoin, in that this new cryptocurrency will be pegged to a basket of traditional currencies and maybe other ‘stable’ assets.
Where Schiff is Wrong
The thing is, and this is rather opinionated, Schiff may be wrong in postulating that Globalcoin will be preferred in all scenarios over Bitcoin. In fact, some argue that the new cryptocurrency isn’t a direct competitor to BTC. For those unaware, this upcoming crypto asset will be backed by centralized corporations, like Visa, Mastercard, and Facebook itself, that are purportedly paying $10 million to run a node. With the cryptocurrency expected to be a stablecoin, the assumption that many have made is that these node operators will be making a return on their investment through data, which they can obtain because they have access to the private ledger.
Bitcoin, on the other hand, can be entirely private if implemented correctly and used in the proper manner. As Arthur Hayes of BitMEX once explained:
“Sooner than you think, cash will not be an option for privacy, or for anything else. And private citizens will come to appreciate the inherent value of Bitcoin, as their ability to discreetly hold and transfer value evaporates once cash goes the way of the dodo.”
Also, Bitcoin, in the eyes of many, acts as a store of value that is equal to, if not better than gold. Thus, BTC may see adoption as a store of value, but not as a medium of exchange. This would also not allow Globalcoin to ‘encroach’ on its market share in the digital asset market. In fact, some argue that Globalcoin will only normalize cryptocurrency, making it more likely for users to adopt Bitcoin and its ilk (or not).