The Great Hack: Documentary reflects on data abuse and privacy boundaries

Courtesy : Netflix

The new Netflix documentary, The Great Hack, delves into the story behind the Cambridge Analytica Scandal, which involved the misuse of 87 million US Facebook users’ personal data. The revelations took down Cambridge Analytica, a British data intelligence company working on hefty political campaigns all over the world, and forced Facebook’s founder and CEO Mark Zuckerberg to testify in court.

The film follows the experience of US college professor David Carroll, who enters a legal battle to recover his personal data from Cambridge Analytica after the scandal breaks. Led by Alexander Nix, Cambridge Analytica was headquartered in London, and throughout its existence worked on political campaigns in many countries using its data expertise to target voters.

The storyline encompasses one of the greatest challenges of this day and age and calls into question the power of big tech companies, as well as their lack of accountability in harmful data abuse cases. The business model of social media companies like Facebook, where access and services seem to be free at the point of use, is actually a cash cow leveraging on information about its users that can be commercialised to anyone willing to pay the right price.

Cambridge Analytica claimed to have created a profile for virtually every voter in the US, each one containing 5,000 data points. As these data points were collated from information gathered via Facebook user interactions, the main question emerging is: are users aware of how their data is exploited?

While judgements on the conduct of Cambridge Analytica’s CEO Alexander Nix and the ‘propaganda machine’ deployed by his team require further reflections, the documentary plainly shows the wide array of data that technology companies have access to, and the dearth of ethical protocol around how they intend to use it. It confronts us with the uncomfortable realisation that we are constantly being watched, and that our own behaviour can be used to manipulate our decisions.

The Cambridge Analytica scandal marked a turning point in the history of big tech: before the scandal, the big tech companies had an image of being cool, made by young people who enable connectivity and free information to billions. Since the revelations, however, this feeling of awe has started to dissipate, alongside a general realisation that the alleged free services provided by social media and technology companies actually come at a price. If, on the one hand, hyper-connectivity can bring us closer and provide fast and unpaid access to information, a quick flip of the coin shows us the other side, where users feel cheated and violated.

The scandal prompted a wake-up call for users and authorities alike, raising questions over the kind of regulations needed in a time when data has become the most valuable asset on the planet. The real question arising from the scandal was about how much information people are giving away to social media and technology companies without their consent or even knowledge.

Still, despite the important message it endeavours to get across, the documentary neither offers us real solutions towards finding justice, nor suggests any alternative with which to fight the big tech companies that have invaded every aspect of our lives. There is a clear urgency in recognising data rights, establishing boundaries between public and private, and clarifying terms and conditions for users so that, when using social media, they can be fully aware of the information they would be giving away.

If nothing else, the Cambridge Analytica scandal has highlighted the need to set up an inclusive, comprehensive and global regulatory framework to regulate uses of data and establish stricter privacy rules.

“Data protection is a structural problem. We don’t have effective ways to hold companies accountable and to enforce when they commit data crimes because we don’t even have a way to define, let alone prosecute, these data crimes. We can see that the existing tools we have are not succeeding at what they’re supposed to do,” said professor Carroll in an interview for Business Insider on the documentary and the aim of raising awareness about the blurred lines between privacy and use of social media.

The reality is indeed worrying and the clock is ticking. The debate about data rights, privacy and accountability is long overdue.

John Marshall, CEO of World Ethical Data Forum (WEDF), the only platform to embrace the full range of interrelated issues around the use and future of data, commented : “We’re fortunate such excellent work has been done since the outcry over Facebook and Cambridge Analytica to bring the issues around data and privacy to public awareness. The civil liberties implications of the new data technologies are very serious, and rightly or wrongly Cambridge has come to symbolise a tendency we may have caught just in time. But these questions go deep. We need to explore the ethical and practical questions arising from the uses and control of information quite generally too. It’s very easy to overlook the fact that we’re still struggling with the ethical implications of even apparently very basic technology, such as the press, let alone what Zuboff calls ‘behavioural futures markets.’ How we decide these questions will define our epoch.”

By addressing these concerns and encouraging the collaboration of apparently competing worlds, from technology and big business, government and security agencies, policy makers and the media, to human rights lawyers, whistleblowers, and privacy and transparency advocates, the World Ethical Data Forum offers a unique and crucial perspective for the future.

GDPR: The ground-breaking data regulation

The European Union is a pioneer in establishing data regulations. The implementation of the General Data Protection Regulation (GDPR) in May 2018 sparked a global conversation about data ownership, consent and use, as the ruling imposes a number of obligations on individuals and entities collecting personal data from EU residents. The GDPR, even in its early days, has established itself as an exemplary set of regulations and a good place to start a serious conversation about protecting user privacy.

“In the charter of human rights that founded the EU, data protection rights are listed as a fundamental right that’s equivalent to freedom of speech, freedom to marry, all these other basic human rights. That’s why Europe has a 20-year lead on creating the infrastructure for businesses to provide for these rights,” said Carroll, highlighting the lack of protections in the US, for example, where the major technology companies are headquartered.

The first-year of GDPR reports show that many companies have problems handling data in a responsible manner. In a nine-month summary of the effects of GDPR, the European Data Protection Board said that as of March 2019, there were 206,326 complaints raised, of which nearly 100,000 related to data privacy. GDPR supervisory agencies in 11 countries issued fines, totalling €55,955,871 (over $6.3 million). The Netherlands recorded the most data breach reports per capita, followed by Ireland and Denmark. The biggest European economies — UK, Germany and France — rank tenth, eleventh and twenty-first respectively. Greece, Italy and Romania have reported the fewest breaches per capita.

Despite the regulation being new, compliance has been a problem, which can lead to breaches and damage to users. One year after its implementation, a survey by the International Association of Privacy Professionals (IAPP) shows that more than half of all companies are still not GDPR compliant, while 20 percent said they did not believe full compliance was even possible.

If you are interested in the next WEDF event taking place in London next July 2020, please get in touch with us at: Cassiopeia@worldethicaldata.org

The Great Hack: Documentary reflects on data abuse and privacy boundaries

Courtesy : Netflix

The new Netflix documentary, The Great Hack, delves into the story behind the Cambridge Analytica Scandal, which involved the misuse of 87 million US Facebook users’ personal data. The revelations took down Cambridge Analytica, a British data intelligence company working on hefty political campaigns all over the world, and forced Facebook’s founder and CEO Mark Zuckerberg to testify in court.

The film follows the experience of US college professor David Carroll, who enters a legal battle to recover his personal data from Cambridge Analytica after the scandal breaks. Led by Alexander Nix, Cambridge Analytica was headquartered in London, and throughout its existence worked on political campaigns in many countries using its data expertise to target voters.

The storyline encompasses one of the greatest challenges of this day and age and calls into question the power of big tech companies, as well as their lack of accountability in harmful data abuse cases. The business model of social media companies like Facebook, where access and services seem to be free at the point of use, is actually a cash cow leveraging on information about its users that can be commercialised to anyone willing to pay the right price.

Cambridge Analytica claimed to have created a profile for virtually every voter in the US, each one containing 5,000 data points. As these data points were collated from information gathered via Facebook user interactions, the main question emerging is: are users aware of how their data is exploited?

While judgements on the conduct of Cambridge Analytica’s CEO Alexander Nix and the ‘propaganda machine’ deployed by his team require further reflections, the documentary plainly shows the wide array of data that technology companies have access to, and the dearth of ethical protocol around how they intend to use it. It confronts us with the uncomfortable realisation that we are constantly being watched, and that our own behaviour can be used to manipulate our decisions.

The Cambridge Analytica scandal marked a turning point in the history of big tech: before the scandal, the big tech companies had an image of being cool, made by young people who enable connectivity and free information to billions. Since the revelations, however, this feeling of awe has started to dissipate, alongside a general realisation that the alleged free services provided by social media and technology companies actually come at a price. If, on the one hand, hyper-connectivity can bring us closer and provide fast and unpaid access to information, a quick flip of the coin shows us the other side, where users feel cheated and violated.

The scandal prompted a wake-up call for users and authorities alike, raising questions over the kind of regulations needed in a time when data has become the most valuable asset on the planet. The real question arising from the scandal was about how much information people are giving away to social media and technology companies without their consent or even knowledge.

Still, despite the important message it endeavours to get across, the documentary neither offers us real solutions towards finding justice, nor suggests any alternative with which to fight the big tech companies that have invaded every aspect of our lives. There is a clear urgency in recognising data rights, establishing boundaries between public and private, and clarifying terms and conditions for users so that, when using social media, they can be fully aware of the information they would be giving away.

If nothing else, the Cambridge Analytica scandal has highlighted the need to set up an inclusive, comprehensive and global regulatory framework to regulate uses of data and establish stricter privacy rules.

“Data protection is a structural problem. We don’t have effective ways to hold companies accountable and to enforce when they commit data crimes because we don’t even have a way to define, let alone prosecute, these data crimes. We can see that the existing tools we have are not succeeding at what they’re supposed to do,” said professor Carroll in an interview for Business Insider on the documentary and the aim of raising awareness about the blurred lines between privacy and use of social media.

The reality is indeed worrying and the clock is ticking. The debate about data rights, privacy and accountability is long overdue.

John Marshall, CEO of World Ethical Data Forum (WEDF), the only platform to embrace the full range of interrelated issues around the use and future of data, commented : “We’re fortunate such excellent work has been done since the outcry over Facebook and Cambridge Analytica to bring the issues around data and privacy to public awareness. The civil liberties implications of the new data technologies are very serious, and rightly or wrongly Cambridge has come to symbolise a tendency we may have caught just in time. But these questions go deep. We need to explore the ethical and practical questions arising from the uses and control of information quite generally too. It’s very easy to overlook the fact that we’re still struggling with the ethical implications of even apparently very basic technology, such as the press, let alone what Zuboff calls ‘behavioural futures markets.’ How we decide these questions will define our epoch.”

By addressing these concerns and encouraging the collaboration of apparently competing worlds, from technology and big business, government and security agencies, policy makers and the media, to human rights lawyers, whistleblowers, and privacy and transparency advocates, the World Ethical Data Forum offers a unique and crucial perspective for the future.

GDPR: The ground-breaking data regulation

The European Union is a pioneer in establishing data regulations. The implementation of the General Data Protection Regulation (GDPR) in May 2018 sparked a global conversation about data ownership, consent and use, as the ruling imposes a number of obligations on individuals and entities collecting personal data from EU residents. The GDPR, even in its early days, has established itself as an exemplary set of regulations and a good place to start a serious conversation about protecting user privacy.

“In the charter of human rights that founded the EU, data protection rights are listed as a fundamental right that’s equivalent to freedom of speech, freedom to marry, all these other basic human rights. That’s why Europe has a 20-year lead on creating the infrastructure for businesses to provide for these rights,” said Carroll, highlighting the lack of protections in the US, for example, where the major technology companies are headquartered.

The first-year of GDPR reports show that many companies have problems handling data in a responsible manner. In a nine-month summary of the effects of GDPR, the European Data Protection Board said that as of March 2019, there were 206,326 complaints raised, of which nearly 100,000 related to data privacy. GDPR supervisory agencies in 11 countries issued fines, totalling €55,955,871 (over $6.3 million). The Netherlands recorded the most data breach reports per capita, followed by Ireland and Denmark. The biggest European economies — UK, Germany and France — rank tenth, eleventh and twenty-first respectively. Greece, Italy and Romania have reported the fewest breaches per capita.

Despite the regulation being new, compliance has been a problem, which can lead to breaches and damage to users. One year after its implementation, a survey by the International Association of Privacy Professionals (IAPP) shows that more than half of all companies are still not GDPR compliant, while 20 percent said they did not believe full compliance was even possible.

If you are interested in the next WEDF event taking place in London next July 2020, please get in touch with us at: Cassiopeia@worldethicaldata.org

Facebook’s Libra: a coin-toss towards digital economy evolution and crypto’s mainstream status

Facebook’s announcement of its plans to introduce Libra, a global cryptocurrency focused on achieving the financial inclusion for unbanked people, spurred substantial backlash over data privacy and security issues from governments and their regulators. Libra has faced cynicism in relation to the social media giant’s controversial past regarding its failed attempts to protect users’ privacy.

While the governments’ main focus is on the regulatory issues, the industry experts believe Libra plays a more significant role for the crypto community in general and the development of the digital economy. Nonetheless, Facebook’s blockchain project seems to affect on every aspect of the modern digital economy and appears to have all-encompassing influence.

Mass adoption of cryptocurrencies and digital payments

This pessimistic approach of governments and regulators towards innovative technologies is however, nothing new. From an innovation aspect, Libra as a blockchain-based digital currency presents the next step in the evolution of money: an inflection point in the form of financial solution created not by governments and central banks, but the private companies which will ultimately disrupt the deeply ingrained monopoly set up by the mainstream money systems.

During the latest episode of Financial Fox, hosted by PR guru Stefania Barbaglio, Jared Tate, founder of DigiByte, explained that Libra symbolises significant validation for the novel blockchain technology, and starts to forge a new path for the future of finance and the crypto technology. Due to its pre-existing association with a well-known name such as Facebook and its 2.5 billion users, Libra stands a chance of becoming successful, and is essentially expected to be an advocate for cryptocurrencies, encouraging a lot more people to step into the crypto space.

As such, even if deemed unsuccessful, Libra symbolises an important first step towards the mass adoption of cryptocurrencies. It will allow for a large segment of the public to get familiar with the crypto space and educate them on fundamental concepts and the key idea of controlling their own funds, as claimed by the Charles Hoskinson, founder of Cardano, during his conversation with Stefania Barbaglio for the Financial Fox Crypto Show.

Issues on data privacy and the control of technology market

Due to its potential for mass-adoption, Libra raises serious questions on the aspect of regulation and as such has been greeted by backlash from the regulators and members of traditional financial institutions, mainly over serious concerns as to whether the digital currency threatens the stability of the US dollar and other government-backed currencies, or could infringe on consumers’ privacy.

Essentially, there is no limit on the type and the amount of data Libra will gather, and absolutely no guarantee on privacy. Facebook’s business model is based on how much it knows about you. As Libra itself is based on the permissioned blockchain, it means Facebook has full censorship power backed up by money that people, especially the unbanked, are going to need, said Jean Phillipe Beaudet, Director and CTO of ZeU Crypto network for the Financial Fox.

Such concerns among experts regarding the Libra stable coin are predominantly rooted in the market dominance of its parent company, Facebook, and the latter’s controversial past regarding data handling. With that in mind, introducing Libra, a payment system powered by Facebook, raises serious political power and consumer privacy concerns.

Jean Philippe Beaudet, director of ZeU, argued that although cryptocurrencies are always seen as a decentralisation tool that will help people gain more freedom, they can also become the most effective control tool ever made, as this is smart money needed by everyone. “We are now at the point where we have to balance these requirements of being a bit regulated and not enabling the governments to control their populations. That is potentially going to be a great challenge and Libra is not helping on that front. I believe it’s just creating a scarier monopoly”, added Jean Philippe Beaudet for the Financial Fox.

Adoption of Libra in different countries

Libra’s main objective — to bank the unbanked in developing countries — seems to be running into obstacles already.

Jared Tate, Bill Barhydt, Jean-Philippe Beaudet, Ajeet Khurana and the host, Stefania Barbaglio

It appears that Libra’s mission could be undermined as some of the developing economies such as India, Libra’s largest potential market, seems to have adopted a hostile approach towards cryptocurrencies. Earlier in 2019, India introduced a bill on Banning Cryptocurrencies and Regulation of Official Digital Currency, proposing a 10-year-long prison term for people who “mine, generate, hold, sell, transfer, dispose, issue or deal in cryptocurrencies”, ultimately preventing Libra and any other innovative crypto-technology project from entering the Indian market.

Ajeet Kurana, Indian entrepreneur and former CEO of Zebpay India shares his hopes in the interview with Director of Financial Fox Stefania Barbaglio, in regards to Libra’s efforts in India: “If in such an environment, Facebook’s Libra succeeds in leading the way against the Indian government or in fact any such government hesitant towards cryptocurrencies, showing that the unbanked are truly the marginalised community in question, that would open the doors to all the other cryptocurrencies and digital assets to enter the Indian market.”

The future of Libra in China, the other leading emerging economy, does not seem much brighter. The media outlets Facebook and WhatsApp are already banned in China, the most restrictive country when it comes to ICO’s, prompting social media consumers to use WeChat, a similar app that allows the options of payment transfers and purchasing goods without ever leaving the app.

Jared Tate, founder of DigiByte, believes that “If history is any sort of track record, the Chinese government will opt to do something very similar to Libra, creating their own digital currency”. The central bank of China is reportedly working on its own digital currency to stop Facebook from taking over the market.

Cryptocurrency and Blockchain Ecosystem to expect other players, inspired by Facebook

Charles Hoskinson in an interview for the Financial Fox

Charles Hoskinson, CEO of Input-Output Hong Kong, shared in his interview for the Financial Fox his prediction of the Crypto and Blockchain market: “The existence of Facebook in the market will be an invitation to the others to come in as well. It is kind of the next wave and a great competitive pressure to existing players such as Cardanos, Ethereums and Bitcoins to evolve more quickly. Ultimately it’s Darwinian technology and we have to be obsessed with usability, consumer experience and usefulness in order to survive. Facebook has certain advantages which other smaller players don’t.”

However, those advantages don’t seem to be stopping other big companies either. We are possibly expecting to see other big platform providers such as Amazon, Google, and Microsoft entering the Blockchain and Crypto space. Samsung has already announced experiments on developing an Ethereum-based Blockchain , while Nestle announced its new Blockchain initiative to support its supply chain.

Decentralised technology

The decentralised nature of blockchain technology means that it doesn’t rely on a central point of control. A lack of a single authority makes the system fairer and considerably more secure. The way in which data is recorded onto a blockchain epitomises its most revolutionary quality: decentralisation.

Instead of relying on a central authority to securely transact with other users, blockchain utilises innovative consensus protocols across a network of nodes to validate transactions and record data in a manner that is incorruptible. However, that can’t really be said in the case of Libra, which is supposedly backed up by the pool of securities.

In that respect, Jared Tate, founder of Digibyte, believes that the truly decentralised projects out there really cannot be compared with these fiat currency-backed projects. Jared told Financial Fox that in the case of Libra, there needs to be a differentiation from the regulators’ perspective on how an everyday, transactional stable coin is operated versus a truly decentralised digital asset like Bitcoin or Digibyte. We can’t really compare the two as they don’t function in the same way, considering that the Libra project is pegged to the US dollar, which is subject to inflation.

So far, Facebook doesn’t have a very good record of decentralising things and giving power to the users. It is, like most Silicon Valley companies, the middleman of necessity and in occupying that position, has the enormous control over your privacy, your information and your autonomy. “They like being dictators in that respect”, said Charles Hoskinson, CEO of Input-Output Hong Kong in an interview for the Financial Fox.

That perhaps subjects Facebook’s decentralised technology to even more scrutiny, as calling it decentralised while in essence it is not, makes it even more controversial.

So where does that leave Libra? Ultimately, it is at the forefront of this paradigm shift towards a more developed digital economy of the future. But until further developments are completed and authorities start to warm to the idea of digital money, Libra’s near future depends on its collaboration with the financial sector, social impact organisations, regulators and experts across various industries. This is the way to ensure that a sustainable, secure and trusted framework underpins Libra’s system, allowing it to deliver a leap forward for economic empowerment on a global scale by ultimately encouraging the development of digital economy, as has been promised by Facebook.

To watch the debate about Libra and follow other related stories subscribe to our Youtube Channel and follow @financialfox for the upcoming updates.

Libra’s boundary pushing causes worldwide backlash

A month after the announcement of Libra’s proposed launch, Facebook’s cryptocurrency has faced considerable backlash from authorities, raising uncertainty around its future plans. The blockchain project has been greeted frostily by most regulators and financial institutions all over the world, as they collectively indicate that an unregulated digital currency available to billions of social media users globally would bring about significant financial disruption.

The negative response has prompted skepticism around the feasibility of bringing Libra to the market in 2020 — if ever. According to CNBC, the tech industry is expressing doubts over whether the cryptocurrency will become available next year, in light of the issues raised by US lawmakers.

The lack of public trust in the social media company is also a factor that could hinder further developments: “Facebook won’t get far with Libra if consumers are worried about their financial data being compromised or misused, and regulators don’t trust Facebook to keep that data secure,” Dimitri Sirota, CEO of BigID, a New York data privacy firm said to CNBC.

The US Federal Reserve Chairman Jerome Powell said the US central bank has “serious concerns” about Libra, the Wall Street Journal reported. Both the Federal Reserve System and the separate Financial Stability Oversight Council are meeting to discuss Libra alongside global policy makers.

Facebook faces pushback from regulators over Libra launch

The backlash, however, does not seem to have stopped Facebook from moving forward with their plans. In a letter addressed to the US Senate Banking Committee last Monday, Facebook blockchain lead and Libra project leader David Marcus attempted to ease concerns, stating that the social media company is open to collaboration with authorities and other regulatory bodies to make the Libra project work within the right framework:

“I want to give you my personal assurance that we are committed to taking the time to do this right. We understand that big ideas take time, that policymakers and others are raising important questions, and that we can’t do this alone. We want, and need, governments, central banks, regulators, non-profits, and other stakeholders at the table and value all of the feedback we have received,” Facebook’s blockchain lead stated.

David Marcus is scheduled to testify before the Banking Committee next week.

India and China not open to Libra, but China considers the benefits of crypto

If Facebook is facing problems with the US Senate, the international stance on Libra is no friendlier. In the biggest Asian markets, India and China, Facebook’s cryptocurrency seems to be an increasingly remote possibility.

Due to tight regulations, Facebook is currently locked out of the Indian market, one of the largest in the world. Since April 2018, all entities regulated by the Reserve Bank of India have been banned from dealing in cryptocurrencies and virtual coins, and the government is working on a draft to increase penalties for those who trade and use cryptocurrencies.

“Design of the Facebook currency has not been fully explained,” India’s Economic Affairs Secretary Subhash Garg said in an interview in New Delhi on Saturday. “But whatever it is, it would be a private cryptocurrency and that’s not something we have been comfortable with.”

Chinese authorities are reluctant to let Libra enter the market, but show interest in cryptocurrencies

Meanwhile in China, a senior official from the Central Bank stated that Libra must be “put under the oversight of monetary authorities” as reported by Bloomberg earlier this week.

Because as a cryptocurrency, Libra would be able to be transacted freely across borders, Chinese authorities are concerned that it “won’t be sustainable without the support and supervision of central banks,” Mu Changchun, deputy director of the People’s Bank of China’s payments department, told Bloomberg.

Mu has also expressed further concerns about the lack of clear commitment to counter money-laundering mechanisms, as well as clarification as to how Libra will protect its users’ privacy.

Nevertheless, Chinese authorities have not ruled out the use of digital currencies in their territory as they recognise the advantages of the technology in terms of improved efficiency.

Libra’s announcement has prompted the PBOC (People’s Bank of China) to look into plans to introduce a government-backed digital currency, aiming to secure China’s position in the global cryptocurrency race, as reported by the China Daily.

“A digital currency issued by the central bank can improve the efficiency of monetary policy, and help to optimise the payment system,” said Wang Xin, director of the PBOC Research Bureau.

Don't miss Cassiopeia live debate about Libra with crypto experts. SUNDAY 7PM UK TIME. Subscribe to our Youtube Channel and follow @stefixy @financialfox for participating link.

The two sides of Facebook’s crypto coin Libra

The launch of the cryptocurrency Libra announced by Facebook earlier this week has prompted many discussions about the future of finance, particularly the role of cryptocurrencies. The project has grabbed the attention of regulators all over the world, most of them calling for the project to be delayed or even scrapped.

In the crypto space, some experts have expressed their disapproval over a big tech company entering the area, while also acknowledging that the launch of Libra could be a tipping point in the history of blockchain.

On the latest FinancialFox, crypto PR guru Stefania Barbaglio interviewed On Yavin, CEO and founder of Cointelligence about his views on Libra. He is an angel investor and serial entrepreneur with more than 20 years of experience in the tech industry. A leading authority on cryptocurrency, he is also a data-driven strategist.

His company, Cointelligence, conducts data research and analysis for the crypto economy. Cointelligence was created to bridge the information gap in the crypto economy, and also offers professional due diligence and blockchain advisory services.

“The new Facebook coin is a fake cryptocurrency. They are calling it cryptocurrency because it is a buzzword. It may be a digital currency, but it is not a cryptocurrency. It is a crap coin,” says On Yavin.

On believes that Libra is not a real cryptocurrency because of three main factors:

- A Facebook digital currency will by definition be largely centralised.

- Facebook has a huge trust problem after its poor track record in securing its users’ personal data.

- Facebook is partnering with big companies such as Uber, Paypal, Vodafone and Visa to create Libra. In essence, this means that big corporations will continue to control the system and exploit users. “That is the opposite of what a cryptocurrency should be,” says On.

Libra might eventually have a financial value, he says, but the whole system sounds illegitimate and it does not represent a real cryptocurrency.

Libra could make crypto mainstream

Whilst Libra itself might sound like a poorly developed cryptocurrency, its impact on the cryptocurrency market is likely to be positive and could be the move needed to bring cryptocurrencies into the mainstream.

Regardless of the future of Libra, its launch has exposed huge numbers of people to cryptocurrencies and the world of blockchain. Because Facebook has now officially stepped in, crypto may start to be viewed as more serious and credible.

Up to this point, conversations about cryptocurrencies have been nearly exclusive to technologists. Now with the launch of Libra, Facebook is practically making cryptocurrency available to its two and a half billion users at once.

“I think that the positive side is that Libra will get so many people introduced to the new generation of digital payments and some of them will want to learn more about real cryptos like Bitcoin and Ethereum,” says On.

With the threat of disruption posed by a company the size and influence of Facebook launching a digital currency, regulators and central banks have started to look seriously at the crypto world, which could prompt much needed regulations of the market.

The launch of Libra means that the cryptocurrency market is bound to become more interesting for outside investors. Nevertheless, it is important for those entering the crypto space to be careful and carry out thorough research before putting down large amounts of money. We are still at the ‘young’ stage of the crypto market, so there are plenty of scams going around, which can easily lure eager investors into fraudulent projects.

On’s company Cointelligence helps to identify the most authentic projects and exchanges in crypto. Cointelligence found over 80–85% of crypto exchanges to be faking trading volume to get their rankings up on listing websites to increase revenue. “There’s very little transparency on crypto exchanges. This is misleading to investors,” says On. He warns users of different types of malicious actors around:

- Scammers: people who launch fake projects with the intention of stealing investors’ money

- ‘Mini scammers’: people who found crypto ventures quite genuinely, although the project is not feasible in reality and does not bring returns

- ‘Scamming neighbours’: the partners of a fake project, such as the publishers that advertise it and YouTubers and influencers who promote it

More developments are sure to unfold soon and whatever happens, the crypto market could be on its way to a great transformation. All eyes on Libra.

Watch the full interview here:

Facebook’s Libra sparks privacy and security concerns

On Tuesday, Facebook unveiled plans of launching its own digital currency, Libra, in the first half of 2020. Facebook’s stablecoin will let users shop and send money overseas with almost zero transaction fees.

Facebook has united forces with some of the major names in payment and e-services including Mastercard, PayPal, Uber, Visa, Spotify, eBay, and Vodafone, to form the 28-members Libra Association, based in Geneva. Facebook hopes to have. It is reported they expect to have 100 members by Libra’s launch, showing the ambition underlying its plans. The Libra currency will be stored on the e-wallet Calibra, which is being developed by Facebook. According to the company, the Calibra wallet will be available in Messenger, WhatsApp and as a standalone app.

In less than 24 hours, the project already raised great concerns as Libra is poised to become a global currency that could potentially challenge major fiat currencies such as the US dollar, as well as take down traditional financial institutions.

Having a centralised tech company like Facebook orchestrating the launch and system of a cryptocurrency goes against one of the core principles of digital currencies advocates: decentralisation. With 2.7 billion users, Facebook has constantly been a target for hackers and malicious actors, because of the value of its users’ data — it can become even worse holding large amounts of money.

Whilst a more detailed plan of how Libra is going to work, it is clear that it will have a significant impact over the current financial system, perhaps even become a major player, given the large influence of Facebook.

Questions over privacy of financial information have emerged to put into question Facebook’s credibility of managing a digital currency. Recalling the Cambridge Analytica scandal, which saw the hijack of 87 million users data, just a year ago, Facebook does not have a positive track record of securing users’ data and privacy — so quite understandably, there have been doubts about Zuckerberg’s firm dealing with people’s money. Facebook has constantly been a target for hackers and malicious actors.

“It’s difficult for me to see anyone who cares about privacy actually adopting this new offering, particularly given Facebook’s laughable record on respecting their users’ privacy choices,” cybersecurity expert Brian Krebs said to CNBC.

The lack of legal protection for users is another of the main worries about the Libra project. The sector of digital currencies is at the moment largely unregulated, justifying the concerns of having the tech giant Facebook entering the competition. So far, in the cryptocurrency realm, investors across the world have lost hundreds of millions of dollars through price volatility, crypto-exchange hacks and illegitimate projects. In 2018 alone, $1.7 billion in cryptocurrency was stolen through hacking.

The market has also faced money-laundering and terrorist-financing allegations. In light of these allegations, Facebook said that the Calibra system plans to conduct compliance checks on customers who want to sign up, using verification and anti-fraud processes that are common among banks.

According to Kevin Weil, who runs product for the Libra initiative, the project gives a chance for regulators around the world to bring their attention to cryptocurrencies and start creating mechanisms of regulating the system: “It gives us a basis to go and have productive conversations with regulators around the world,” he told Reuters. “We’re eager to do that.”

Cryptocurrency experts took to social media to express their concerns over what Facebook’s entry to the crypto space could mean.

“If you’re concerned with Facebook knowing too much or having too much access to your private data, Libra will give Facebook even more direct access to your financial information,” said Phil Chen, a cryptocurrency expert who pioneered HTC’s first blockchain smartphone to the Independent.

“It’s not just access to the information of your transactions, it’s direct access to your wealth and capital. If the top-line question about Facebook and antitrust is about whether to break it up and spin off the likes of WhatsApp and Instagram — well Libra is the most invasive and dangerous form of surveillance they have designed thus far. This will easily become the most dangerous antitrust case in history.”

The Libra project has proved to be worrying for lawmakers who were quick to reprimand the cryptocurrency. The project is suffering backlash from regulators and lawmakers in the US and Europe with urges for the project to be delayed or even paused.

“Given the company’s troubled past, I am requesting that Facebook agree to a moratorium on any movement forward on developing a crypto-currency until Congress and regulators have the opportunity to examine these issues and take action,” said US Democratic congresswoman Maxine Waters.

The French Finance Minister, Bruno Le Marie, has said that this new cryptocurrency cannot operate as a sovereign currency. The minister also stated that the Libra currency should be a matter of discussion on the upcoming G7 meeting with central bankers in July.

On the next FinancialFox, crypto expert Stefania Barbaglio will interview On Yavin, CEO and Founder of Coin Intelligence. Coin Intelligence conducts data research and data analysis for the crypto economy. On will be sharing insights about the latest developments of Facebook’s Libra and its impact on the crypto market.

Don’t miss our next episode live tomorrow!