Libra Shrugged: How Facebook Tried to Take Over the Money

by David Gerard

From Libra to Diem
Silicon Valley tries to disrupt the world — and the world says “no.”
the biggest social network in history. A stupendous, world-shaping success. But governments were giving Facebook trouble over personal data abuses, election rigging and fake news.
Mark Zuckerberg what if Facebook could pivot to finance? Or, what if Facebook started its own private world currency?
Facebook could have so much power that governments couldn’t stop them. It would be the Silicon Valley dream.


Facebook launched Libra in June 2019. Libra would be an international currency and payment system. It would flow instantly around the world by phone. It could even “bank the unbanked.” Libra could apparently do all this just by using a “blockchain.”

But Libra would also make Facebook too big to control— and to lead the way for Facebook’s Silicon Valley fellows to swing the power of their money as they pleased. Facebook and their friends could work around any single country’s rules. Libra could shake whole economies.

And Facebook would become the “digital identity” provider to the world. If you wanted to use money at all, you’d have to go through Facebook.

Governments looked at Libra — and they saw another 2008 financial crisis in the making. Facebook’s plan would have made the company even more entrenched — at the cost of broken economies worldwide. Starting with toppling the US dollar.

Libra was as incompetent as it was arrogant — and the world stopped it in its tracks. But how did Facebook put forward such a bizarre and ill-considered plan, that left every regulator who saw it reeling in horror?

And what happens when another company tries the same trick? Or when Facebook won’t take “no” for an answer, and releases the cut-down version that they’re already calling “Libra 2.0”?

“Libra Shrugged” is the story of a bad idea.


Also

* Bitcoin and the source of all the bad ideas in Libra.
* Central Bank Digital digital versions of official legal tender, suddenly fashionable again because of Libra.
* Facebook’s early forays into payments, with Facebook Credits and Messenger Payments.


Table of

Taking over the money 7
Chapter 1: A user’s guide to Libra 9
Chapter 2: The genesis of Beller’s blockchain 15
Chapter 3: To launch a Let’s start a crypto 19
Chapter 4: why Libra is like this 25
Chapter 5: The Libra White Papers 33
Chapter 6: Banking the unbanked 43
Chapter 7: The Libra Reserve plan and economic stability 49
Chapter 8: Libra, privacy and your digital identity 61
Chapter 9: The regulators recoil in horror 67
Chapter 10: David Marcus before the US House and Senate 77
Chapter 11: July to September 2019: Libra runs the gauntlet 95
Chapter 12: October 2019: Libra’s bad month 101
Chapter 13: Mark Zuckerberg before the US House 111
Chapter 14: November 2019: The comedown 123
Chapter 15: Central bank digital currencies 129
Libra 2.0: not dead yet 141
2010–2013: The rise and fall of Facebook Credits 149
Acknowledgements 155
About the author 157
Index 161
Notes 167

Genres: Economics, Technology, Nonfiction

182 pages, Kindle Edition

Published November 2, 2020

Reviews

[Kit Power · Rating 5 out of 5]

A superb piece of journalism that may cause you to reflect that we're profoundly lucky that so many of the people who are incredibly powerful and dangerous are also comically inept.

[Grant · Rating 4 out of 5]

The recent, unlamented death of Novi as well as some interviews with David Gerard inspired me to finally take a look at his longform work. I couldn't help but read Libra Shrugged in his acerbic British voice. However, while he is dry throughout the book, for the most part he's able to write in a factual manner and let Facebook provide all the schadenfreude for him. I was familiar with the broad strokes of Libra and Novi/Calibra, but reading the history of its first few years like this, it is absolutely astounding how ignorant, hubristic, and outright halfassed Facebook was about this whole thing. I think this is a solid recap of the first few years of Libra that doesn't overstay its welcome.

[Itay · Rating 3 out of 5]

פחות טוב מהקודם שלו, אבל ספר טוב של דיוויד ג'רארד על המסע המוזר והמטופש של פייסבוק עם ליברה.

[Ernst · Rating 3 out of 5]

A good overview of Facebook's failed attempt to become a global bank but not a bank. There are amusing parts, mostly on how the blockchain enthusiasts at Facebook completely failed to recognise their own incompetence and untrustworthiness. And the "unbanking the banked" line was really good. Overall not as funny or informative as Attack of the 50-Foot Blockchain, which had me literally laugh out loud several times.

[Ietrio · Rating 1 out of 5]

I was hoping for a sincere conspiracy theory. Something new. Instead I get the same 19 century drivel as any other day: the evil Jew vs the government demi-god on a high horse saving the idiot serf from falling into the sin of not adoring Big Brother.

[isbjørn · Rating 3 out of 5]

Veldig grundig, men detaljeringsgraden gjør den repetetiv. Veldig nyttig hvis man ønsker å forstå (og vinne diskusjoner om) akkurat hvor idiotisk det er å forsøke å bruke kryptovaluta for å løse transaksjonsutfordringer eller enklere tilgang på bankvesen til verdens fattige.

[Cormac · Rating 4 out of 5]

Its origins as an opinion piece are fairly obvious, for better and for worse. Although generally well-sourced, it has a good helping of "source: trust me bro" to go alongside. Not always entirely well structured. But an enjoyable read and one I learned from.

[Daniel Gomez · Rating 2 out of 5]

Barely informative. It drops quotes from hearings, but essentially comes to a message summarizable in a couple of pages. On top of that, it was rushed and does not cover the ultimate downfall of the project.

[Dana Robinson · Rating 4 out of 5]

The ham-handedness of Libra is astounding.

[Tim · Rating 4 out of 5]

Great postmortem of Libra. Very cathartic.

[Sean Patrick Holland]

tl;dr: Facebook decided to launch a digital currency that was so stupid, AOC and Trump agreed on something.

[Nidan Basheer · Rating 4 out of 5]

Was trying to be a report and an op-ed at the same time

[Pedro · Rating 3 out of 5]

Short.