hey everyone welcome back to Tech Talk I'm Julia Beauchamp I'm here with Lucas
Mearian senior writer at Computerworld earlier this week I asked will
cryptocurrency ever become mainstream we might have a little bit better of an
idea about that now after mark zuckerberg testified in front of
Congress so stick around Thank You Lucas for joining us so will cryptocurrency
ever become mainstream it's the question of the hour and I have the answer yes
cryptocurrency will become mainstream in 18 months I think eventually it will and
cryptocurrency will eventually become mainstream it's too good it's too easy
not to but there are so many things they have to answer about this technology
first how secure it is and whether it can scale those are two of the big ones
so what exactly so my next question is is it gonna happen in 2020 when libras
supposed to roll out there's been so much regulatory pushback yesterday when
or yes yesterday when chase Thursday yesterday when Mark Zuckerberg testified
in front of Congress he said that he wouldn't roll out Libra or the Libra
association wouldn't roll out Libra until US regulators approve it so when
do you even foresee that happening boy there's a lot of chess pieces moving
they're not the least of which is what a lot of people could refer to as the
banking Lobby banks have reason to be threatened by cryptocurrency in general
because it removes the middleman it removes the clearance and settlement
process that's currently performed by central banks and depository and
clearance corporations so this basically creates an open market
a free open market to exchange currency around the world and nobody has to clear
because it's automatic so I think the banks could be behind some of this some
of the lobbying going on in Congress right now at least one analyst is
absolutely positive of that just can't believe otherwise named some of the
banks in fact one of them had created its own
cryptocurrency JPMorgan Chase no she doesn't
evidence of that but there was some statements made that led her to believe
that and they have created their own cryptocurrency but it's for
institutional customers is not for the consumer exactly that's where I want to
sort of really this is that there's a lot of sort of cryptocurrencies floating
around or in development that are like Libre a fiat currency but Libre is a a
fiat currency that was kept back back yes
yeah well yeah what's like the technical Fiat backed cryptocurrency right so a
Bitcoin does it doesn't have well some people would argue against this but I
don't believe it has an intrinsic value it's all based on supply and demand
there's nothing behind it there's no government backed currency behind it or
cash behind it fiat backed currency on the other hand
you have to have money deposited somewhere where it can be accessed to
back up that cryptocurrency that you're using so one-to-one in most cases one
dollar equals one digital coin for example gotcha so there's the difference
between Libre and something like JPM coin is that Libre is for the masses
it's for consumers anyone should be able to use that trading yep yeah and I would
I understand that that's sort of where the concern comes in because if you're
opening up Libre and the digital wallet Calibra to Facebook's massive massive
user base of literally billions of people it could basically become a de
facto currency and some disrupt financial systems around the world
now what Mark Zuckerberg said is that if we don't revamp our financial our
outdated and stagnant financial system we're going to be left behind by
countries who are already looking into national crypto currencies like China
like India and we don't want to be in that position at least one analyst I
spoke to said that that is upon of those empty threats and that china is
not going to be coming up with a cryptocurrency of its own that's going
to replace the dollar as the de facto standard for business around the world
but that's that's the the threat that's being made or at least the warning
that's being made by folks like Mark Zuckerberg who by the way who's most the
time before the house finance committee as one big Mia culpa for all the things
they did wrong with Facebook such as the privacy concerns in Cambridge analytical
and 2016 Russia and election interference so it was interesting that
he spent so much time apologizing for the mistakes of the past and I think a
lot of that is because whoever the presidential candidate or whoever
becomes president next if it's a Democrat is likely to at least explore
the possibility of breaking up Facebook yes some other large monopolies and
exactly why and I remember you mentioned this in your story which will also link
in the description is that Facebook Mark Zuckerberg was kind of saying like
anyone but I don't know anyone but Facebook or the public wants anyone but
Facebook to be doing this and I mean it's great that in theory it seems like
a good idea but because of Facebook's ongoing privacy concerns the Cambridge
analytic escape data breach I mean just in the past year there's been I cannot
count how many data breach it's not like tons and tons but enough that I can't
think of them off the top of my head that have happened so it I not only is
there probably a distrust between Facebook and regulators around the world
al Qaeda just yet financial regulators across the world because every country
might regulate a crypto currency different ly but I also think I wonder
if consumers could be concerned about their privacy because this is something
that is of Facebook's creation even though it's not necessarily governed or
regulated by Facebook right so part of the pitch for having a cryptocurrency
see on Facebook is that it be secure and one of the first questions of
legislators was exactly how and more importantly how do we know that you're
going to be able to comply with know your customer rules or anti money
laundering regulations that keep nefarious characters from going on and
using an anonymous profile in order to transact behind the scenes because you
don't know who owns those cryptocurrencies now Mark Zuckerberg
says no you have to have a Facebook account in order to own these
cryptocurrencies we're gonna make sure you know these people but how difficult
would it really be to create a false Facebook account if we write without
bells banking information or banking information that can't be readily traced
and then use that to purchase these digital coins that are on a blockchain a
distributed peer-to-peer network that isn't traceable because you have
cryptography protecting the privacy of the users so these are the questions
that Congress had from Mark Zuckerberg one of the problems with Libra is not a
lot even in the white paper that was put out there's not a lot of detail about it
and that's what's hampering it right now so I think the combination of what is
this exactly and how are you going to deploy exactly I think Mark Zuckerberg
and his engineers probably know or have a very good idea of how they're gonna
deploy this but they haven't said much about it at this point
so I think that's what Congress is looking for that maybe some pressure
from the banking lobby against this because of the threat cryptocurrency
represents certainly Europe and countries but Europe and especially
France in Germany have made it clear they will not allow Libra within their
borders I mean some of the regulators I shouldn't say all but some regulators
said no because and I want to use the right terminology they said it would
threaten their euros value and unlawfully unlawfully privatize money
those were the two main concerns so you've got two major Europe
European Union members saying we will not allow Libra it hasn't even launched
yet it's just been thrown out as an idea and they're already pushing back China
has banned Bitcoin right right right so I'll have other countries some middle
Mideast India have also pushed efforts to block Bitcoin so there's a lot of
hurdles that Facebook and Libre Libre and the labor association are going to
have to face to roll out as far as regulatory approval goes but even within
the own Libre Association there is a bit of trouble right and okay so here's this
is where the whole banking Lobby argument came in and again this is sort
of insider track stuff where they're saying companies like MasterCard and
Visa and eBay have left the Liebherr Association the governing
body for this cryptocurrency so Facebook would not actually govern the
cryptocurrency once it's out this would be done by this nonprofit organization
that's represented by right now 21 used to be 27 28 29 companies but had we had
seven I think left yeah big names I have this pulled up on my screen if we want
to look at it who has left and what's major this is in another one
of Lucas's articles which I will also link below and what's interesting is
that the majority of the companies who have less you have MasterCard who left
you have PayPal stripe visa financial services companies and anyone who is
unbeliever Association was expected to a take Libra and MasterCard and Visa
correct me if I'm wrong we're also expected to sort of convert that's right
they were going to convert the digital coin to US dollars in the United States
and euros elsewhere whatever sure yeah we type of currency it might be but that
was that was what they were expected to do so those are big names being
pressured allegedly by the biggest card issuers so the biggest
banking corporations out there that actually issued the cars they've got the
purse strings exactly and I was actually listening to a story about this earlier
today and the point that I believe it was on NPR so the the point that NPR
made was that Visa and MasterCard already know how to roll out financial
services systems across the world yeah Facebook I mean maybe they know what
they're supposed to do but they don't have that practice so with two of these
huge huge financial service companies backing out of the Liebherr Association
it doesn't mean that Libre will never happen but it's now gonna just have to
overcome many more hurdles it's been put on I would say a kind of pause I think
the Libre association's members the Libre Association made it clear they
still want to move forward Mark Zuckerberg is being his couching the
rollout of this in his in his apologies for what Facebook has done he's saying
we're not gonna do anything until you guys like this right but he was pitching
this to begin with as a system for the unbanked so people in third-world
countries and it's cryptocurrency absolutely makes a lot of sense for them
because they even have a very poor banking system or they have a monetary
system that's failing like Venezuela people don't want to put their money in
banks because I think a grain of corn is worth more than the money down here
right now so they this gives them an opportunity to put their money somewhere
where it can't be affected by their local economy that makes sense yeah and
also now for trade purposes now think of a coffee grower in Colombia who instead
of putting a sack of coffee on a mule and taking it down the road to this is
the one distributor who can pay him for that and might be paying him a tenth of
what it's actually worth because he doesn't have a vehicle and they're you
know thousands of coffee growers like this instead now he can go on to an open
market and get the market price for that car
he still has to put it on a mule to get it to where it's gonna be shipped but he
can get the money for it via a financial system backed by blockchain and
cryptocurrency yeah it's like I said at the beginning this video it's something
that is good and helpful in theory it's just going to be interesting to see how
it rolls out when eventually as you have promised
we won't quote you on that it rolls up for the mainstream I I think you're
gonna see cryptocurrency you're gonna see blockchain in general morph as it
matures and what you're gonna see is you're gonna see hybrid versions of it
you're gonna see what's called a private or permissioned blockchain that is only
between the companies behind the scenes doing the processing work or in case of
a supply chain communicating behind the scenes to track their their goods and
then you can see a public-facing one that's gonna be on an open public
blockchain that will allow you to scan a QR code and look at the history of that
product that you just purchased who was the farmer who grew it you know who
shipped it where was it how you know how safe was it so along its journey those
sort of things including the ingredients that were added to it if it's a multi
ingredient product for that matter so you're going to see these hybrid block
chains really take over moreso than what we're seeing today which is simply
either permissioned or open public block chains in the case of Bitcoin sure well
thank you so much Lucas - any other thoughts about libre cryptocurrency
Fiat backed cryptocurrency I need to make sure I get that right yeah only
then we want to think of this in long term right now we're still deeply into
the hype phase we're starting to start and come out of it in some industries
but for the most part we're deeply into the hype phase right now like open
software Linux like the internet itself this is gonna take a lot of time to
develop we could be looking five 10 15 years down the line I'm just throwing it
out there it could be that long before we see cryptocurrency mature to the
point where it becomes mainstream great well thank you so much Lucas I
learned a lot had a lot of fun I'm intrigued to see where this goes
absolutely and thank you all so much for watching this episode of tech talk if
you liked this video be sure to give it a thumbs up and subscribe to our channel
again be sure to check out the links in the description below I'll link to two
of Lucas's stories which are massively informative if you want to learn any
more about cryptocurrency Libre etc thanks again and we'll see you next time