Since the white paper Facebook's dedicated cryptocurrency, more commonly known as ‘Libra' went live for members of the public to take anywhere from a focused read to a cursory glance over, there was no doubt in anyone's mind that, what would come next would involve the Senate.
It's not as though Facebook has had an arms reach a relationship with Senate's committees, considering the fact that, it was only last year that Mark Zuckerberg found himself face-to-face with one over concerns over public privacy and security in the aftermath of Cambridge Analytica.
With this reputation with people's data recently etched into our minds, David Marcus, the head of Facebook's cryptocurrency subsidiary – Calibra – took to the Senate this week to provide his testimony to the Senate committee for Banking, Housing and Social Affairs.
Are there any outstanding differences with what amounts to round two of hearings between the US Government and Facebook? For one, from the outset: it seems like the committee is seemingly better equipped to ask more informed questions and get to the root of concerns over any cryptocurrency, especially ones related to Facebook.
“Congress needs to give individuals real control over their data…”
Ohio Senator Mike Crapo begins the hearing with a direct expression of the concerns held by the US government and population over the prospects, both of a US that doesn't enforce user autonomy over their data, but of a social media giant that is collecting up vast amounts of sensitive information.
“Europe has already done this by placing limits on companies and providing rights to individuals [online] with respect to their data… We need to establish similar policies for data brokers. Given the significant amount of information already held by the largest social media platforms and the prospect of gaining even more financial information. Congress needs to give people more power over their data.”
So with this statement provided by Crapo to begin. What are some of the big takeaways from this Senate hearing?
The Take-Away Points – Calibra Senate Committee
First of all – Mistrust
“A Toddler whose gotten hold of a book of matches”
is the way that Senator Sherrod Brown defines big tech companies having hold of users sensitive data. Brown would take to Twitter at 3 pm on July 16th to reiterate the mistrust that should be afforded of big tech.
Big tech and big banks aren’t accountable to the public, and they shouldn’t be given more power over public infrastructure like the financial system. #FacebookFakebucks
— Sherrod Brown (@SenSherrodBrown) July 16, 2019
“Facebook has burned down every house and called every arson a ‘learning experience'.”
Senator Brown apparently holds Facebook accountable for a litany of disruptive actions, which has not coincided with rebuilding industries and businesses. There's certainly been more than enough instances in our collective memories when Facebook has proven itself to otherwise be incompetent on the better end, and downright malicious on the other.
“Facebook does all it can to manipulate its billions of users, and this is no exaggeration… Facebook tested if it could manipulate our emotions with a test on half a million users, turns out it can…”
It wouldn't be a senate hearing if there weren't some modicum of grandstanding involved. But goes as far as to earn this mistrust on account of its impact upon social discourse in society and politics.
While the Brown has his reasons to mistrust of Facebook and big tech companies, the underlying theme remains the same – the senate holds a mistrust of Facebook and Libra – and considering the fact that it runs as a for-profit, subjective thinking corporation, is that so surprising?
“The last thing we need is to put more power into the hands of major corporations… This is a recipe for disaster.”
Slow and Steady
David Marcus, getting started with his own written testimonial, cited the kind of experience and optimism that he brings both to Libra and to the Senate committee. It would appear as though Facebook has taken the advice of the likes of the Winklevoss Twins.
The two entrepreneurs behind Gemini had provided some explicit, and closed-door advice to Zuckerberg, that a gradual, and legally ‘on the level' approach was necessary for institutional crypto projects to get off the ground. In the testimony, Marcus provided this same message.
“We will take the time to get this right. We expect the review of Libra to be the most meticulous seen. And we are more than happy to work together with regulatory agencies both here and across the world.”
In addition to this, Marcus maps out the regulatory infrastructure set out within the white paper, further explaining the formation of the independent Libra Association: a collaborative system made up of 27 founding companies, headquartered in Switzerland.
The underlying goal of this Association is to provide an access point for those that remain unserved by the current banking or financial systems, firstly, while also holding regulatory powers of oversight, with each of its members serving as a validator node.
“When fully formed, we hope for Libra to consist of hundreds of these members, with Facebook only getting one vote in the process.”
For those otherwise uncertain of the position that these members take – they operate as validator nodes, similar in fashion to block creators on EOS. While this sounds like a democratic system, it remains to be seen whether:
1 – Libra proves capable of actually regulating ‘above and beyond' frameworks set out by the EU and USA
2 – These founding members/validator nodes can operate in a democratic and fairway
3 – These same nodes can avoid operating in a self-interested way, considering the kind of dividend yields each of them obtains by simply BEING a node.
Seeking to Adapt or ‘Total Bullshit”?
While Marcus took the time, in a prepared statement to underline the desire on Libra's part to collaborate with centralized financial institutions, the opinion of the committee was one of mistrust at this early stage.
While Facebook has had a cryptocurrency in the works for some time, it hasn't ameliorated the underlying issues of trust which now blight Libra.
Viewers, both in the building and on viral news feed are left thinking whether there is a legitimate learning curve that Facebook has passed in establishing Libra. Or if, in the words of the Republican Senator John Kennedy, this is yet another mound of ‘total bullshit' levied up by the multinational company.