August 14, 2019 • 59 mins
Love it or hate it, Facebook is one of the world's most popular social media platforms. Over a relatively short span of time, the company has exploded into numerous areas of human interaction (and created no small amount of controversy along the way). In May of 2009, Facebook experimented with a virtual currency concept called Facebook Credits. It didn't last long, but there may be a new scheme on the horizon. Join the guys as they explore the fact, fiction and conspiracy surrounding the Facebook Libra, the proposed virtual currency that -- according to critics -- could allow this social media platform to function like a central bank.
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Episode Transcript
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Speaker 1 (00:00):
From UFOs to psychic powers and government conspiracies. History is
riddled with unexplained events. You can turn back now or
learn the stuff they don't want you to know. A
production of I Heart Radios How Stuff Works. Hello, welcome
(00:25):
back to the show. My name is Matt, my name
is Noel. They called me Ben. We are joined as
always with our super producer Paul Mission Controlled Decond. Most importantly,
you are you. You are here, and that makes this
stuff they don't want you to know. Shout out to
some of the big names listening. Joining our fellow listeners today,
(00:45):
Mark Zuckerberg, thanks for dropping by. Jeff Bezos, Hope things
go well for you with Amazon Prime Day. I guess
that's happening as we record this. Now. There's a strike
going on today with Amazon employees. They're very well should be.
Have you seen terrible things that happened to those employees.
But a lot of folks are calling for joining the
(01:06):
strike in the form of not going to Amazon or
any of its properties today for the next few days.
That's what I've done. But let's let's also point out
that the meme about storming Area fifty one, which now
has picked up with some celebrity recommendations. I think Nathan Phillion,
(01:26):
Jeff Goldbloom, Keanu Reeves and so on. We're posting about
it science fiction stars that has that has gained more
traction than any idea of, say, storming detention centers where
US children are dying or boycotting Amazon, because Amazon is
the new version of the Walmart conundrum. It's just so
(01:47):
gosh darn convenient for so many people. I've also used
Amazon regularly, full disclosure to get stuff for work, as
have I not to derail things too much. I've been
very shocked to see in New York one of like
this liberal bastion um with a lot of young folks
that work in like very kind of like woke kind
of industries or whatever. Everyone gets their groceries from Amazon.
(02:08):
It's crazy, Like you go to an apartment complex and
the doors are just stacked high with Amazon boxes. I
think people are able to be selectively uh kind of
you know, awake two problems if it doesn't like directly
inconvenience them. I think that's most people. Yeah, that's exactly
what I was gonna say. Yeah, I think we see
what's in front of us, and you know what we're
(02:28):
aware of because of the people that are around us.
And that's generally it unless you're fully plugged into your
social network. I would call it performatively performatively moral. So,
for instance, what happened to the child soldiers that everyone
was uh so concerned about in two thousand twelve. They're
still out there, many of them are no longer children,
(02:51):
but new children have been accepted into the ranks. Yeah,
it really is just what is trending right now? And
do you remember the last couple of things. I had
something just as an example that I wanted to chime
in with earlier, and I've completely forgotten it now because
now I'm thinking about this, it'll come back to I
guarantee you. Unfortunately, there's there are no shortages of different examples.
(03:15):
And of course, I mean, if we want to be
optimistic about it, every little bit counts. Your actions do matter,
regardless of what some people will try to make you
think when they don't want you to take action. But
speaking of actions, how are how are the weekends for everyone?
Paul Mischion Control good weekend, thumbs up, thumbs up, Gotta
(03:35):
we've got a nice streak. When michig Control nowadays, it's
been pretty much thumbs up because he's living his best life.
What'd you know it? How about? You know? It was good?
I went and visit my mom in my hometown of Augusta,
g A. Uh. My kid was in a church choir camp.
So I went to a church service for my first
time in many, many many years. And there were some
(03:56):
things about it that I had forgotten about, like when
they passed the election plate and yeah, sure is at
the end you put the money in, you do put
the money out, you put it in. That's right, that's
definitely right. Then you've got me there. Um. But the
ushers at the end take the plates and hold them
aloft at the altar. Whoa, and is that a thing?
Are you aware of this? Yeah? I don't know. It's
(04:18):
it's a Methodist church, so maybe it's just a Methodist thing.
But yeah, they all convene down on the floor, three
of them, and they hold the plates up like as
an offering too, you know, the the deity. That's nice.
I was doing something similar. I was getting together my
my e coin wallet. I realized that I hadn't been
doing any kind of like I don't know what you'd
(04:38):
call maintenance on it, like figuring out exactly where all
my stuff is and my portfolios and all of that.
But um, over the weekend, just I'm ready to use
e cooin again. So they have what do you have?
It's just it's your standard wallet. Really, you know where
the income goes directly into that account. And I mean
you're talking about like lightcoin, bitcoin like you're talking about
(04:59):
different like coin. Yeah, you know, yeah, it's it's it's
e coin. It's just the one that uh ecorp is,
you know, introduced a while ago. I don't know, I
don't it's my favorite one. I wish you suck. I
wish you luck in your endeavors. Uh And this this
is a show that we personally love. I I've thought
about this before, and I would hazard the same case
(05:21):
goes for you, Matt. If you came into a financial windfall,
you'd probably still want to do this show. Huh oh yeah,
I would. Just I mean I would just put put
more money away in my coin. I quietly buy up
our company. I mean I have fantasized about that. Me too.
I've fantasized about quietly buying up the company. Going to
(05:41):
work every day without telling anyone, anyone the case until
there was an all hands meeting, and then just saying
talking out of my neck, as we say in the South,
making some crazy proclamation, and then when someone tells me
to calm down, say, you know, reveal that I own
I own the company, or some kind of I'm imagining
(06:02):
some kind of play where you just correct the CEO
or something, just just like a small correction, be like,
just do it openly and publicly, and to actually homepst
off because that's ridiculous, I would say from me now. Uh,
and maybe just shark tank it, you know, maybe just
fift that's all you need. We want to hear how
(06:26):
things have been going in your neck of the global woods.
So please don't feel like you have to wait until
the end to contact us. You can pause the podcast
right now. You can leave us a review that always
helps us get a little bit closer to the good
graces of our corporate overlords, a little bit further away
from being fired. Uh. And so until until we secretly
(06:49):
buy our company, we love some reviews from you when
your fellow listeners, how about you been, How was your weekend?
I had a lot of stuff happened. I was I
was actually in town for this weekend. I will not
be in town for the next weekend. There's a lot
of travel. But who worked I've I've been working on
some various projects. Um yeah, that'll that'll overall be checked
(07:14):
special checks. I love that transparency. I've been open booking
a meadow on a sunny day. Guys, But how are
your kids? My kids? The ones I know, the one
I know about this is good. She she did a
really good job in her choir performance. I don't want
to be a bummer. I saw something pretty crazy this weekend.
I saw a hit and run accident. I saw a
(07:35):
gentleman crossing the street in my hometown get hit by
a giant Ford F one truck and it was very upsetting.
And uh, I will say this, I always say this
about my hometown. There's so many cops just lurking around
trying to kind of nail people for the US and stuff.
This was one case where it was really I was
really glad they were around because they immediately chased the
(07:57):
guy down. They caught him, and the ambulance was there
and like a minute and a half cop was there
to talk to the guy and talk to witnesses, and uh,
you know, it was a good example of efficient policing
and first respondership. And I witnessed at first hand. Did
you report as a witness? I did not because there
was somebody that was directly with the guy. There were
(08:18):
several other people that were there. We was kind of
were passing by. We just moved on. But you know,
this strange thing is twenty years ago that may have
been perhaps a headline in the local newspaper, but may
have been forgotten pretty easily except for the people directly involved.
That's all changed nowadays. And I would argue for the
(08:39):
past decade at least, probably more probably closer to the
past fifteen twenty years. Social media has become the primary
currency and amusing netword, uh a little bit, a little
bit in a cavalier manner. Social media has become the
primary currency of communication for many, many people. And when
(09:00):
we say social media, we think of several things. One
of the most popular is Facebook. You might love it,
you might hate it, but there's no denying Facebook is
a huge, gargangel and tremendous business, and it seems set
to stay. It's just it's in us now, in our species.
If you would like to learn more about what Facebook
actually is, where it came from, and what it can do.
(09:22):
Check out our earlier deep dives on the subject in
previous episodes. You can also check out tech Stuff by
Jonathan Strickland that has a great look at the nuts
and bolts of Facebook as it stood. Of course, every
Facebook episode needs to continually be updated because they are tricksy,
they are clever little varmints, and they will they work
(09:45):
to uh circumvent legislation, and two they would say address concerns,
So we'll always have to do an update. We'll probably
have to do an update on today's topic in a
few months. So let's just get a real quick recap
on Facebook and and all all this weird e currency
stuff before diving into the newest, strangest Facebook ambition and
(10:09):
why some people might tell you it is a conspiracy.
So Facebook, here here the facts. Yeah, that's right. Facebook,
primarily at its source is national multinational conglomerate. Now I'm
just kidding. It's a social media platform, and it's also
Instagram and a bunch of other things, all kinds of communication. Primarily,
(10:33):
let's talk about Facebook, the social media platform which you
know has seen a slow down in the number of users.
But when we say slow down, we just mean it
isn't at that extremely rapid rate that it was for
you know, years and years. They currently have two point
four billion billion monthly active users. And ben if it
(10:56):
were a country, it would be where does it lie
in our est there? Oh, it would be by far
the largest country in the world by population, almost double
the population of China, which is a little more than
one point three billion people. So this is two point
four billion, and it got to that number. It became
(11:16):
the largest thing in terms of population very very quickly
because it started originally restricted to college students in two
thousand and four. From two thousand four two thousand nineteen,
that's a that's a heck of a growth, even with
that slow down that we mentioned earlier. We have to
remember that the more people, the more access people in
(11:37):
emerging economies have to the internet, uh, the more Facebook
users are created. Yes, and it's a very important point
there that Facebook is global. It's not just a that's
what I was joking about, the multinational conglomerate thing, just
the concept that it exists in every country that has
access to the Internet, and people everywhere are using it. Now,
(12:01):
here's the big question. Let's say you've got a giant
social media platform like that. How do you leverage something
like that that's free for people to come on and
use however much they want? Yeah, how do you leverage
that into making money as a giant corporation with overhead
and employees and all the things you gotta pay for. Yeah,
that's the thing. That's We've said it before on this show.
(12:22):
Many other shows have said this. It's even at risk
of becoming a cliche because it is true. If you
do not pay for a service, you are the product.
That is absolutely true. Uh, and unfortunate. But that's how
Facebook makes a ton of cash. They sell the data
they aggregate about you, your friends or perhaps your ex
friends and your enemies and so on, and they package
(12:45):
this to advertisers. They package this to research firms, Cambridge
Analytica being one, and then they they sell this. You
do not get a cut of this. Then your data.
You can find different pundits estimating how much your data
as an individual as worth. Uh, it's not very much,
but it's still more than zero, and you get zero.
(13:07):
That's not the only way Facebook makes money, though, they
also have Facebook payments, so it's similar to like Venmo,
those kind of peer to peer things. And Ben kind
of mentioned this in that first go around with the
selling you the users data essentially and leveraging it for advertisers,
because that really is one of the primary ways that
(13:28):
Facebook made money for a long time, which was just
having ads essentially appear as posts within your feeds. Then
one of the biggest reasons advertisers will use that is
just like Ben said, because of the tremendous amount of
information they have on you and they can target stuff
to you so directly. And was this before they had
to identify them as sponsored posts or something like that,
(13:50):
or I think originally, Yeah, I think that's correct. So
if we did it, if we looked at how this
breaks down in six streams, we would say self serve
advertge rising. Let's say you have a great show, um, like,
let's say Paul makes an independent docuseries called the Age
of Applebee's and wants to promote it on Facebook. Then
(14:11):
you can give Facebook money and they will in their
ad manager they will attempt to show more people who
would be interested in the Age of Applebee's post about
the Age of Applebee's. By the way, Paul really enjoyed that.
He gave me a great smile. It's true. It's true.
You have to have you have to have a mission.
You gotta stand for something right. And then target advertisements,
(14:34):
which you mentioned, Matt that be the second Facebook Messenger
ads would be the third, video ads would be the fourth,
Facebook Mobile would be the fifth. Uh. Facebook's mobile app
in generated more than of their ad revenue, which surprising, right.
And the the idea of data generation is tricky because
(14:59):
they're not as far as we know, Facebook is not
purposely purchasing and selling specifically like Matthew Frederick's data or
Noel Brown's data. They're create their aggregating it in a
way that they would argue as anonymous. Yeah, it's all
nationalities or income brackets or all these you know, genders
(15:23):
wherever they need to do separating about so that you
can buy this swath of humanity. And as we record this,
if you if you're listening, you're saying, all right, guys,
to talk about this all the time. What does Facebook
actually have on me? What do they know about me?
You might be surprised, but you can still find out
if you go to the Facebook setting page, find the
(15:43):
tab for general or something like that. Eventually, the they'll
change the click through that you need on on a
pretty frequent basis. But eventually you will find an option
that allows you to download a copy of your Facebook
data and it will be everything. It will be more
than you thought. Yeah, so you can also nominally control
(16:07):
some of the ads that Facebook puts in your face.
But that's I mean, that's the nature of the game.
They're pretty clear about that. So, yeah, we know what
Facebook is. We know what Facebook is. But oddly enough,
and this this might be controversial, opinion, might be a
hot take. Some people don't trust Facebook? Wait what I know? Right?
(16:30):
They seems so friendly though, and they give you all
this free content, And why wouldn't you trust someone who's
giving you all this stuff? These games? Farm Bail, Farm Bail.
If you can't, um, sop up that sarcasm that's dripping
out of your headphones right now, I feel bad. I mean,
get some bread, maybe UH can make use of it. Um,
So Ben, why don't people trust Facebook? I'll play your
(16:54):
reindeer games, Matt Let's and Paul, you ll have to
edit me here, but this is the best way to
say it there too categories. Let's divide into accidental cups
and purposeful overs so it sounds good. The the accidental
stuff would be the stuff that happens to any big
company that is keeping so much stuff. Data leaks, right,
(17:14):
identification of people in a way that may stymy their
professional growth or literally endanger their lives. There's a story
of a therapist who learned that their their patients, we're
starting to show up in each other's people you May
Know list, you know, the thing that tries to sort
(17:35):
of nudge you into stalking folks. And then there was
another case where members of law enforcement would see people
they put in prison popping up on their people you
May Know list, and if they're on your list, you're
probably on their list. The abyss stairs back. Yeah. And
then the purposeful stuff would be complaints of using or
allegations of using aggregated data to target people who would
(17:58):
be vulnerable to misinformation and propaganda so on. And in
the age of deep fakes, that becomes more and more important. Right.
And then there are all kinds of scams that exist
online that sometimes use Facebook as a way to get
you to click on a link. That's one way, But
that's not necessarily Facebook of doing it, but it's Facebook
(18:22):
allowing it to happen. There you go, And then with
this goes into a conversation Nolan I had had briefly
off air before, which is, how do you decide and
we want to hear your take on this, two folks,
how do you decide who to accept or who to
ignore when it comes to friend request? M M. I typically,
(18:42):
I think we talked about this. This is exactly what
we talked about. Ben. If I have a few mutual
friends with that person, then I I'm more likely to
accept it if it's clearly someone that's just a fan
of the show had more rather than follow me on
Instagram than than on Facebook, because Facebook, to me, is
more like for people that I actually no no and
interact with, and that that's just to me seems like
(19:03):
the Facebook rules. So I'm less likely to accept a
Facebook friend request from somebody I don't know. But on
Instagram you don't have to accept, they just follow you.
So it's a little bit different game, you know. Yeah,
you can only shut off everybody and make it private,
or you can just keep it public and block individuals.
You can block individuals yeah, yeah, I know exactly what
you guys are talking about. No, I'm yeah, I mean
(19:24):
I get it. Your fingers on the pulse, I can see. Yep,
that's what it sounds like. Ye. So, so what you're
saying an as you accept no outside friend requests or
you don't even have a Facebook page, I might you
neither confirm nor deny either, just kidding. I'm friends with
you guys, that's true. Taking the same tax that the
(19:46):
government in Israel it takes with nuclear weapons, right, yeah, yeah,
I yeah, I am to social media as Ben is
to everyday um, talking about what's occurring in his life.
Does that make sense? Transparent? You is shoe? It entirely
(20:08):
the kind of person who's like a m A, don't
say anything. Yes, Uh, let's let's ask each other about cryptocurrency.
We're promising we're going somewhere with this cryptocurrency. We did
an episode with Jonathan Strickland on this right, two parter.
It's two parter, that's right. Uh, And it's easy. It's
easy to do a two parter on cryptocurrency because there
are so many different and at times difficult angles to
(20:32):
take here. But what what is a cryptocurrency? It's a
cool name crypto, but why why do we call it that? Well,
if you want to go deep dive beyond the topics
that we discussed with Jonathan on so that I want
you to know, you can check out text stuff, which
has several fantastic episodes on the subject. But essentially, if
for our purposes here, cryptocurrency is a digital or virtual
(20:54):
currency that uses cryptography for security. And that's as simple
as that. A cryp toocurrency is very difficult to counterfeit
because of the fact that it is uh encrypted in
this way. And many of these cryptocurrencies are decentralized systems
based on something called blockchain technology. It's a little tough
(21:15):
to go into deeply in a quick, you know, bite
or two, but you really should check out that Strictlan
episode or the tech stuff series to get a deeper
understanding of what blockchain is. But essentially, it is a
distributed ledger. Um. Yeah, the ledger just like a written down,
you know and sell spreadsheet or just any kind of
list of figures that is enforced by a disparate network
of computers. Meaning that a defining feature of a cryptocurrency
(21:39):
and arguably one of its biggest most powerful features is
its organic nature. That it's not issued by any central authority,
and that fact renders it theoretically immune to government interference
or manipulation. But at the same time, as we know,
it's still very volatile despite any government interaction. Right, just
(21:59):
a simple by some of this stuff. This whole idea
of the ledger is very powerful for cryptocurrency because imagine
that if you've got a dollar in your wallet right now,
or wherever you keep your your money, your fiat currency,
you pull it out, and somehow by touching that dollar,
just by interacting with it, you could see every single
(22:21):
time this this piece of money has been spent since
it was minted, since it was printed out and cut
up right, right, That's how bitcoin works. We're using technology
to create what once would have been relegated to the
realm of psychic powers. One of my favorite psychic powers,
by the way, psychometry, the idea that one can learn
(22:43):
the history of an emotionally charged object through physically touching it.
This power is perhaps most famous in the excellent movie
Vibes starring Jeff Goldbloom and Cyndi Lauper, which I do
have on DVD. If anyone's interesting. I've not heard of
the masterpiece Vibes has okay, So in Vibes, Jeff Goldbloom
(23:04):
and Cyndi Lauper's characters have psychic powers and they work
at this research facility. They eventually go on on a
wild misadventure to a mysterious object in Peru. I believe
Jeff Goldbloom does catch Vibes and like he is in
every movie except for arguably The Fly, He's just Jeff Goldbloom.
(23:25):
Its smoldering with his with his powers, and so he
can touch things and he can know what happened to them. Vibes.
Can you may do a good Jeff Goldbloom impersonation? It's
really hard to nail. It's easy to get to like
an eight out of ten, but those extra two points
are very different, true, because it's like fifty, it's like
six stutter and then like the rest of the percent
(23:48):
is pure charisma cadence. So I don't want to sideline
us practicing my eight out of ten. It's not worth it.
I'll get it up to at least eight point five
and come back. But like like our Jeff gold Bloom impressions,
bitcoin and cryptocurrency as a concept, has a number of
(24:09):
pros and cons. One, as you mentioned Noll, it's decentralized.
This means theoretically, one injury to the system or malfunction
will not bring down the system and in its entirety.
There's also no government manipulation of currency in theory legally
because no government controls it. Right, So when we say
(24:30):
currency manipulation, it's something you hear a lot with maybe despots,
or people are in unstable times in the country and
they say, well, now everything is, We're just gonna chop
a zero off of everyone's bank accounts right to to
get right internationally here or this is no longer the
(24:51):
new currency, only this, but it also leads to cons
the same. Lack of government over site means there's outside
the self regulation in the way the system is built,
which is very clever. And by the way, no one
still no one knows who invented cryptocurrency. Uh, there's no oversight,
and this could lead to volatility because cryptocurrency, by and large,
(25:13):
like FII currency, has no basis intangible assets. It's none,
it's done if it if it changed value tomorrow, if
if every bitcoin, for example, the most famous cryptocurrency shot
up in value by ten dollars were shot down in
value to less than a penny per bitcoin. It would
(25:37):
it would not be because a tangible asset changed. There's
no gold in some sort of secret cryptocurrency Fort Knox,
you know what I mean. And yet it's it's funny
because it's been likened to the way gold miners essentially
would function. When you're talking about the people that are
actually doing the bitcoin mining and all of this, because
(26:01):
as the price rises, more people are I think it's
viable enough or they're going to make enough money doing
the mining, right, because it's worth enough. And then when
it falls, not many people will be mining them because
it's too costly to actually perform the function. You're not
going to make your money back. So it is this
and there's this interesting analogy there with a tangible asset,
(26:23):
even though it's literally, like you said, been attached to
nothing right. Right, And now we have to also mention
that cryptocurrency is very useful for crime. It's no one's opinion,
that's just the fact. The things that make it good
for some legal things also make it good for some
illegal things. Now let's smash them together. In today's episode
(26:45):
of What could go wrong. It's correct, folks. We didn't
just decide to switch the plot halfway through the beginning
of the show. Facebook, you see, wants to start its
own currency. Some people, mostly people who work for face Book,
where its corporate allies, think this is a fantastic idea.
Other people fear it's something more sinister, something dangerous, even
(27:10):
a conspiracy. And it's about to get crazy. Right after
this word from our sponsor. Here's where it gets crazy.
Enter libra libra, not the zoodiac sign. No libra libra.
(27:32):
It's like zebra within with lee libra or book in
some languages. Yeah, it reminds me of my favorite dead currency, Lira.
Remember when Lira was a thing in Italy, right, it
was a fun one. Now it's all boring euros. Well,
there you go. What is libra? Oh yeah, hey, Matt,
what's libra? It's uh, this is Facebook's cryptocurrency, or at
(27:56):
least it's their attempt to get into this, uh, this
game of cryptocurrenting. It's a it's a blockchain approach very
similar to what you know we discussed there with how
bitcoin functions or other cryptocurrencies. Uh. And again it's uh,
it's an idea. But here's the deal. It's not like
it's just you know, somebody pitching stuff around a boardroom anymore.
(28:21):
It's actually happening. It is. Facebook has partnered with twenty
eight different companies to create uh this, this proposed cryptocurrency network.
They call themselves the Libra Association, which sounds like a
real a real James Bond Roger Moore era name for
(28:41):
uh uh consortium of villains, you know, like Specter, the
Libra Association, and of course they have the scales emblazoned
on all their stuff. These companies conclude companies you may
have heard of, big big names, MasterCard Once In on
the Game because credit Card has been worried for a
while that they might lose those sweet sweet transaction fees,
(29:03):
PayPal Once In on the Game, Uber Lift, and more
like Vota, Phone Visa. It's there are no small players.
These companies, financial companies, e commerce and venture capitalists, telecoms
and so on are each gonna invest around ten million
dollars that into this association that will be in charge
(29:24):
of the Libra. The association wants to grow to a
hundred members with an equal vote over time, and Facebook
expects to quote maintain a leadership role through twenty nineteen.
But what what what is this? It's a secretive project.
It revolves around that digital coin, the Libra, and the
ideas that users on Facebook or any of the other
(29:47):
platforms like an uber app, for instance, could send Libra
to each other in place of dollars and use it
to make purchases on Facebook's platform and across the internet.
That's right, And um, I'm saying that the appeal here
is because of that decentralized approach and in this system.
In this system, they use something called nodes. Right, So
(30:08):
Facebook wouldn't directly control the coin, hence the decentralization, nor
would the individual members of this consortium, which is known
as the Libra Association. Some of the members could serve
as these things called nodes. UM a system that verifies
transactions and maintains records of them. That sounds familiar, creating
a brand new payment network. According to the people that
(30:30):
are familiar with the setup. Um, it's not a particularly
new idea. That goes back to seen when an exact
at Facebook named David Marcus had this kind of aha moment, right, yeah,
he said, what if we could also control the currency, surprise, surprising,
came from PayPal right right right before he worked on
(30:50):
this project. David Marcus was the head of Facebook Messenger,
which has been tremendously successful from their definition, and before
his Facebook days, he worked at PayPal, and he says
the idea came out of his early days over at
the Big PP, the idea of a financial network that
existed outside of the world of central banks, and central
(31:10):
banks are, by the way, in charge of pretty much everything. Well,
that's my question though, right, you can't generate this currency
from nothing. You have to exchange actual accepted currency into
the system and then you get it, you know, an
e currency or whatever. So what's the benefit here of
having a currency versus just having a platform like a
PayPal or a Venmo or something like that. There are
(31:33):
some for Facebook, right, So over the past two years,
again this plan is not super old. Over the past
two years, details of it gradually emerged. They bought Facebook,
that is, bought a company that was working to make
blockchain processes a lot faster. And the primary thought here
was that Facebook would do remittance payments that's where you
(31:56):
send money across borders overseas, and they would would on WhatsApp,
and they would pilot it in India because in the
subcond in the country of India, a lot of people
in the diaspora live abroad and they send money either
to their families like living in the UK or something,
or they send money back to families or businesses living
(32:17):
in India. So they thought this was a tremendous market.
You know, the timeline matches up interestingly with you remember
those stories coming out of India where certain currencies were outlawed,
the smaller or the bigger currencies. Yes, due to corruption. Yeah,
I don't know whatever happened to that. The explanation of
the etymology is that libra is an homage to the
(32:39):
French livra or that's French for pound. We should also
mention here that David Marcus is a native French speaker.
So why do it this way? Why partner with twenty
something other companies instead of just being Facebook money? Why
can't they just be facebooks? I mean, admittedly I'm typecasting
here because I in love with that kind of idea.
(33:01):
Go bend bucks the real alternative currency. How's it doing,
By the way, it's great. Actually, it's on the up
and up. So the simplest reason for Facebook to assemble
these avengers is that they are very, very interested in
not looking like Facebook to you too, why to anybody
using this. So the decentralized approach helps them function via proxies.
(33:25):
You may never have a Facebook page that you have created,
although Facebook almost certainly as a shadow profile. View by
now you might say, well, I've never messed with Facebook.
I do have to use Uber, and Uber takes Libra
or they offered me a deal, a discount in Libra
instead of dollars, So all I have to do is
(33:47):
sign up for a Libra account. So that sounds great,
and it's basically just my Uber payment system, and that's
all I'll use it for forevermore. But then secondly, there's
a practical approach you might not try is Facebook, but
you may trust Uber, right, and you do have to
trust one of the other partners involved in this for
(34:07):
this to work. Also, because they're restricting that network, they
can speed up interactions within the network and keep it secure.
They're big tech questions. Is this actually a blockchain? How
does it function in comparison to you know, Bitcoin or
ethereum or sending money on PayPal? Uh, it's faster, and
(34:28):
it's easier because it's a high cost transaction on Bitcoin,
You've got all this processing power you require to keep
it running and secure and just really quick too. Before
we get into fully into the block chain things, let's
not forget that that whole decentralization thing. You bring in
the twenty eight members and eventually one hundred members. Even
(34:48):
though Facebook has, as we said now in two point
four billion monthly active users, all of these other companies
bring in their own chunks of portions of billions of users.
And perhaps the people who use Uber who are a
little you know, more savvy about one thing, or the
people who have a certain credit card, or the people
(35:09):
who are using a Vota phone or whatever, maybe they
aren't Facebook users, and so it's literally pooling everybody. Right,
There's another there's another issue that differentiates them. Reliability, volatility.
To start with, the libra will be pegged one to
one with the US dollar, So one libra one U
(35:32):
S dollar. You'll open, uh, you open a happy Birthday
card from your aunt as moral dean or whatever, and
she gives you a gift card for twenty libra to
spend on Facebook marketplace, like, oh thanks, because that's basically
twenty dollars. So does it become an issue where it's
like only certain vendors will take this, so you can't
(35:54):
use it anywhere. So the idea is to centralize, like
do you use this as a in a in a
way where it forces people to shop, to narrow their
shopping choices as well. Right, Yeah, that's that's part of
That's definitely something that they would have to be discussing
in the back rooms and internal meetings. It's not there yet,
but we have to remember sesame credit used to be
(36:16):
opt in and would never be mandatory, and now it is.
So this is another slow boil situation. Eventually, Libra will
be tagged from what they call a basket of currencies,
which is how international economists talk about this pretty often.
Facebook is still figuring out how this is gonna work,
(36:37):
but their goal is to keep it keep the Libra
from being unreliable, and that's why it is fully backed
by a reserve of quote real assets named Libra reserved.
Of course, when you say real assets in the world
of economics, we're not necessarily talking like one horse for
every two libra or something like that. It's also very
(37:01):
very cheap price for a horse. We're talking about things
like um, things like bonds or some something that generates
this rate of return and debts and debts. So that
is the basic elevator pitch that they're using for Libra.
But how will they actually use this thing in the field?
(37:21):
What do they want? Why are people excited at Facebook
about it? Why are people worried pretty much everywhere else
about it? We'll tell you after a word from our sponsors.
All right, we're back. Let's get into this. Here we go.
So the Libra Association is the only party, the only
(37:45):
people involved in the whole process that we'll be able
to create and destroy Libra. The terms there are to
mint or to burn. Isn't that nice? Uh? And the
coins are only minted when authorized resellers have purchased the
coins from the association with those currencies that we've talked about,
the basket currencies, those FIAD assets, and uh, they they
(38:07):
actually back the coins fully. So this coin is backed
directly by this portion of the basket. Right, Okay, But
here's here's the issue. They're still trying to figure out
exactly how they use this stability, and they have a
troubling aim so we mentioned Originally this would be for
(38:28):
payments across international borders, right, instantaneous payments across international border,
and they would probably be cheaper than the fees levied
by wire transfers. However, they also want this to be
used in countries where the money supply and currency value
is volatile or unreliable, essentially functioning as a viable alternative
(38:50):
a parallel currency. Yes, so this means like Zimbabwe, for instance,
has been waging economic warfare on its own people has
been the subject of that economic warfare abroad, and the
currency as hyper inflated. But what if instead of going
through the government or going through um, another government's money,
(39:12):
you could just pull up your app. Isn't that like
almost like tantamount to like a financial coup? Yes? Right, yeah,
I mean so it's like but they could disguise it
as philanthropy, right and say, oh, no, we're doing a
good job helping stabilize these countries, but they're obviously not
doing it out of the goodness of their hearts, right right, right?
(39:34):
What happens if people in these local economies dump all
of their money into libra because it retains the same
value the next from one day to the next and
then no one uses the actual state currency. Wouldn't that
cause more economic chaos in that community while also profiting
Facebook and zizz Uck Mark Zuckerberg. It's jis Ck zizz
(39:59):
Ck that's like is that like his like demon name.
I love that he's like Malok and Ziska the Germans,
but Zizouck. So this, this idea, this danger is real
and the critics, the critics have differing varieties or degrees
of extremism here. You know, some critics are saying this
(40:23):
is a mistake that could happen, and other critics are
saying you, you people are doing this on purpose. You
know what's going to happen, and you just want your
bottom line, you want more power. It's true, as you said, Matt,
that the Association, members of the liber Association, the only
people are only entities rather that can create and destroy coins,
(40:43):
and the coins are only minted when people have purchased
the when authorized resellers have purchased the coin from the
association with assets that backed the coins fully, and the
coins are only destroyed or burned when those resellers sell
the coin to the Association in exchange for those underlying
(41:05):
assets so high Libra Association, here is a horse, give
me coins, and they'll create coins and they'll say, all right,
we'll hold the horse. And then in theory then someone
comes back and they say, okay, here are my coins,
give me that horse, and I'll be like, all right, boom,
and we'll destroy the coins because the asset for the
coin no longer exists. That's the idea, A little bit
(41:28):
like a shell game, you know what I mean, A
lot of stuff could get could get shuffled out. So
that's that's that's the concept. And here's an example. As
a normal user. Let's say you had let's say you're
Noel Brown. You have a hundred dollars worth of Libra
and you got it because you spent a hundred dollars
(41:50):
in cash. Now you can use this Libra on any
of these platforms that play these reindeer games, or you
can send it to a friend. You can say, you know,
I've on the Patreon for Mission Controls age of Applebee's documentary,
and I wanna I want to drop fifty Libra toward
this cause, because let's get it in festivals. Let's take
us on tour. People need to know about the bottomless
(42:14):
chicken fingers or whatever. So that's the idea. The big
question is how do these folks make money off of it?
Because they are not, as you said, doing this out
of the goodness of their hearts. The Libra Association, which
is legally speaking a Swiss nonprofit, put your one hundred
dollars into a bunch of low risk short term investments
(42:35):
treasury bills, etcetera, etcetera. So, for example, in July of
two thousand nineteen, a one month treasury bill was yielding
two point one to five on a year on a
yearly basis. So that means that since they bought those
treasury bills with your money, they will earn two dollars
(42:57):
and change on your one dollar per just but you're
not necessarily entitled to those profits. You get none of that.
And think about it this way. All of those member
corporations are putting in ten million dollars of their own
money as seed money for this thing, right, so that
the Libor Association begins with two eight million dollars in
(43:18):
that account, and then as they add in more members,
they're adding ten million dollars more. And then as people
are putting their money their actual fiat currency and exchanging
it into libre dollars. That pool gets bigger and bigger
and bigger that they're purchasing these things with, and that
interest becomes massive. So the appeal on the users on
(43:38):
the consumer side is the stability of the currency, whereas
like with like Bitcoin, for example, you know it it
tanked and then it went way high and it's really
all over the place. This would not be that same
kind of speculative gamble that people do with like other
e coin. Right, that's the idea. Yes, that's what they're
selling to the public, right, but what they're selling internally
(43:59):
is a massive amount of profit, a huge pile of
as you've said before, pony bones. To to size it up,
let's let's look at an example. So the Federal Reserve
tracks the u S money supply in a couple of ways. One,
let's just call that M one Money one. Money one
(44:19):
is what we would define the sum total of cash, coins, money,
and checking accounts right now, that's about three point seven
trillion dollars. M two would be everything in money one.
Money two is everything in money one plus savings accounts,
money market funds, co d s, other kinds of bank deposits.
(44:41):
That number is more than fourteen trillion. So let's assume
a few years go by, and this is a great
example I believe in wired or Investipedia. Let's assume that
after a couple of years have gone by, Libra has
achieved about ten percent of what we would call money one,
(45:02):
So about ten percent of the money and money one
has been somehow adopted or associate with the cryptocurrency Libra.
And let's also assume by this time Libra has sold
a billion dollars worth of the investment token. Oh, which
didn't mentioned. Libra is actually two currencies. Yeah, you've got
the one that everybody like that we're basically talking about
(45:24):
right now, the Libra, the one that you will eventually
be able to use. Unless you are, let's say, a
member of Facebook or you work with them or one
of the associations. You get these things called investment tokens.
And these investment tokens are much more expensive. You know,
your company twenty nine, you're you're not buying Libra, you're
(45:46):
buying at Libra investment tokens. And so let's let's assume
that they sold a billion worth of those tokens and
it cost a billion to run the network and manage
their investments. And let's say that the Treasury bill holds
the same little over two percent return over a year
after all those expenses. With that, with ten percent of
(46:06):
the US population using this libra would be generating just
an interest about seven billion dollars a year. That yearly
return on investment, just just to put that in perspective,
is six hundred eight point five one percent. So that's
ten the M one number, ten percent of the M
(46:29):
one number, right, which was three point seven trillion dollars.
That's that's I mean, that's a lot of money, but
it's only ten percent of the known dollars that are
going around almost a seven d percent return. Now that's
if all those conditions we just outlined go through. Sure, why,
(46:49):
how how can we allow this? That sounds just like
members of the Federal Reserve Congress, because there are some controversies,
like their hijacking the monetary system for their own personal games.
It's like the one it's one of the few things
that it seems people on the far right and the
(47:10):
far left agree is dangerous. Maybe it's because no one
in Congress has a sweet enough deal yet with it.
Maybe when they're getting some investment tokens, they'll be okay
with it. Oh, that is happening right now. So now,
just today as we were recording this, uh, members of
(47:31):
Facebook were testifying to Congress. They were speaking to Congress
about this, and their questions were things like, Okay, you
guys are essentially proposing to be a bank and call
it cryptocurrency if you want, but what you're describing is
not cryptocurrency. You're describing a bank. We have banks, and
they have rules that they are theoretically supposed to follow.
(47:53):
So you have to do regulations, right, Like, how are
we going to work this out? But this is this
one of those things where it's like a disruptive thing
in the same way that Uber doesn't have to go
into the same regulations as the taxi cab industry, etcetera.
Until the laws catch up. But you know, for a while,
it's like a feeding frenzy free for all. Right, So
if they like pass this, yeah, maybe eventually the laws
(48:14):
will catch up and they can, like you know, uncle
Sam can get his due. But right off, the rip
probably not gonna happen. It's gonna make a lot of
a few people and a lot of money. This is
also not a US based company. We have to remember's
basically an offshore account. If it's Swiss with nonprofit everything
about the stinks. I don't like it. Well, I mean
(48:34):
it's pretty smart. Imagine if you could get just imagine
if you could start a bank that's not a bank,
get in the market, take over of all the currency,
all before the regulations catch up to you, and then
by the time they do, you're too big to fail.
So it's just like, yeah, they got a play ball
with you because you now own the system. It's that old,
(48:57):
it's ill quote when you hear about very wealthy people
getting away with financial crimes or robbing banks. Essentially, I
heard a quote that I thought we would all enjoy,
which is, uh, if you owe the bank a thousand dollars,
that's your problem. If you owe the bank a hundred
million dollars, that's the bank's problem. What about fd I
(49:20):
C protection my my depositive wells Fargo is guaranteed up
to dollars, That's what we're saying. Yeah, but I'm saying, like,
does that apply here at all? No? Right, well it
would it would have to. Again, this proposed it Uh,
if it obeyed regulations. Yeah, one of those regulations would
be being fd I C and short. But that's just
(49:40):
one of the problems. Another problem is privacy. Given Facebook's
frankly hilarious track record with privacy, you can understand why people,
regardless of whatever their personal leanings are, might not trust
it to have a finger in their personal finances or
commercial finances. What happens when liber gets hacked? Oh seriously,
(50:00):
because it doesn't even matter if you've clicked the little
button that says share all of my Libra purchases on
my timeline, because that will be a thing. It doesn't
matter because people may find out, Like Ben said, if
if Facebook gets hacked, if that private information is then
sold to a third party at some time on determined
time down the road, like your entire purchase history could
(50:24):
and would very much be available right right. Uh, Facebook
has become or the Libra Association excuse me? Is Jeff
Goldblooman vibes they can touch a Libra and they can
see everywhere it has been and that that could help
to be fair, that could help combat some of the
crimes that this will inevitably be used for. Is this
(50:45):
also just another step towards moving us into a cashless economy. Yes,
very much. So my question is this too, Like, it's
a it's a balance, right, because on the one hand,
getting rid of cash certainly cripples like some of the
cartels and like illegal drug trade. Right, you can't buy
cocaine at a bar with libro yet, Mike. But but
that's my question. They're like, how how does this balance out?
(51:07):
Like obviously one of the issues here too is there's
a it's a haven for money laundering potentially, there's a
lot of problems there. But also removing cash, you could argue,
would cripple some of the very nefarious nastiness that comes in,
you know, with with drug smuggling and the ability to like,
you know, pay for that stuff with cash. That's true,
(51:27):
but we also have to consider our species thought the
same thing about bitcoin, and then bitcoin was used for
illicit arms deals with terrorist organizations because of that and
that difficulty tracing it. And let's just talk about you
can venmo somebody at a bar snacks, So why would
(51:50):
you not be able to libra something. You're totally right,
You're totally right, I mean, yeah, you can, just couldn't know.
I think what Matt's pointed, you can't call it anything. Yeah,
you just do a little cute emoji from you know,
like like thumbs up, you know, and in very much
like a social media perhaps the only things that Libro
(52:10):
would know is that this transaction occurred between these two
wallets or Libra accounts. Essentially, it's not going to know
what it was for because like a social media account,
it knows what you tell it. But what happens when
that person goes to jail for selling drugs and then
you're in their transaction record? Does that mean you get
in trouble for buying drugs? It's like the old Dangerous
(52:33):
It's it's like the old dangerous Kevin Bacon game or
the n s a leap frog surveillance, you know what
I mean. It's it's a question that hasn't been answered
yet and it could have found effects on global and
local economic stability. This is an ongoing story, that's the thing.
The details of this are going to change. President Donald
(52:54):
Trump or current president Donald Trump. FED Reserve Chairman Jerome
Powell and others have already been very concerned about this idea. Uh,
they're talking about money launching, They're talking about manipulative trading, right. Uh.
Some Democratic members of Congress called on Facebook to stop
working on Libra until Washington is satisfied that this is
not some sort of dystopian corporate ocracy replacing the state, right,
(53:19):
and to push pause, you know, just long enough for
them to buy all of those congressmen right, because there
is not an insider trading law that really applies to Congress.
So yeah, recently, as we said today, Marcus testified to
Congress to address concerns about this, and he said the
Libre Group will work with the Federal Reserve and other
(53:40):
central banks to make sure Libra doesn't compete with sovereign
currencies or interfere with monetary policy. How other what's the
point then otherwise? How But that's what I'm saying, Like literally,
I think he said they're not going to do is
the thing that makes it profitable is the fact that
it is doing that. Right. I don't understand the You
(54:00):
could just color as skeptical on this one, because it
does feel conspiratorial for him to be in Congress being like, look, guys,
we made the Giant Sea Killer death ray as a
safety measure because the oceans are being very polluted. We're
(54:20):
not going to use it on you, though, I promise
to insinuate that we would use the giant sea killer
death ray too in any way harm the ocean is
frankly offensive. This line of questioning. We're just we're just
building this giant death ray thing for our own benefits
(54:41):
because it generates us death ray interest. So check this out.
This is the other thing Mr Marcus said. And I
don't want to jump on this too hard, but I'm
gonna add a tiny little bit to this. Yeah. Um,
he's mentioning that Libra isn't necessarily an investment. He said, quote,
people will not buy it to hold like they would
a stock or a bond or another cryptocurrency. Will be
(55:03):
doing that, sorry, that will be doing so. If this
is important because if it isn't an investment, uh, the
security an Exchange Commissioner SEC would be less likely to
regulate it currently. As we recorded today, Facebook told Washington
(55:24):
the Libra cryptocurrency would be regulated by Switzerland's financial overseers,
and then it added that the digital money there would
never compete with national currencies, never undermined central banks, and
now we have to open it to you folks. What
do you think should a privately owned consortium like this
possess what could be the same powers as a government.
(55:47):
Are the critics being alarmist? Or are this are these
scary times? Are we? I mean, it hasn't happened yet.
That's true, it hasn't happened yet. But how strange will
it be for us to come back and record an
episode next year? And uh and and you know have
(56:07):
just walked in paying for lunch with Liebro. Yeah, I
know it's impossible. I'd love to talk to Switzerland and
their watchdog about whatever happened with HSBC, Like, what what
went wrong there? I thought you guys were the watch dogs,
remember that whole trug smuggling thing cartels? No, no, okay,
y'all are good. Cool, It's all good, guys. It really
(56:29):
does make notoriously non confrontational. Oh it's true. Yeah, you
know what part of it. Peter Falk is also in vibes.
I just want to add that Peter Falk that help.
I love some Peter Falk vibes, dude. So I'm really
really happy, honestly, Like, I can't tell you how happy
I am with all of this occurring right now over
(56:51):
the next few years. Like how excited I am that
I took the day and got my e coin wallet
in order, because I mean, gosh, it could have been chaos,
like so quickly. You're on the up and up, my friends.
So so tell us, tell us is this is this good?
Is this bad? Uh? Is this little column a little column? B?
(57:12):
If so? Why you can tell us this on the
phone directly. We have a phone number. You can call us.
We are one eight three three st d W y
t K. Leave a message and uh, you know, talk
to us about how corporations are becoming much much more
powerful than governments. To us your best Peter falk And
(57:34):
or Jeff Goldblum impersonation. How mash them up into one
cool hybrid impersonation. I'd love to hear that. See if
you get any vibes from hearing Ben when he does
the outgoing message. You can also find us on Facebook
and Twitter and Instagram. We're all over those places. Uh
we we'd like to recommend before before the Libra's Institute
(57:56):
did that you check out one of our favorite places
on the internet. Here is where it gets crazy, you guys.
I just thought of something. When liber comes through, we
can leverage our here's where it gets crazy page and
our stuff. They don't want you to know official show page,
to institute a version of Libra that we will call
ben Bucks. You know, it's its own thing, and we
(58:18):
we could call it. We should. We should call it
something more reflective of the show. Maybe, Okay, um, I
just I. I respect you guys immensely, but ben Bucks
is sort of my I don't want to split the pie.
Was Okay, we'll call it the Conspiracy Sure, that's perfect.
(58:39):
You can also find us in our individual lives and
doing various misadventures. You can catch me on Instagram. I'm
at ben Bulling. You can catch me as well. I
am at how Now Noel Brown, and I'm working very
hard to start a new account called Conspiracy Vibes. Really yeah,
I'm really hoping it hasn't been taken. Oh man, that's wonderful.
(59:00):
You cannot find me on Instagram. Actually, if you dig
hard enough you probably can. But it's a private account,
so I don't know. I'll have to look at your
picture and make sure you look trustworthy and have a
dog or a cat or something. Walk a walk, a walk.
I'm just kidding, all right. If you don't want to
do any of that stuff, you can still write to us,
give us suggestions for the show, anything you want to
(59:21):
talk to us about in the good old fashioned way.
We are conspiracy at iHeart radio dot com. Stuff they
(59:46):
Don't want you to Know is a production of iHeart
Radio's How Stuff Works. For more podcasts from my heart Radio,
visit the iHeart radio app, Apple Podcasts, or wherever you
listen to your favorite shows.
From UFOs to psychic powers and government conspiracies. History is
riddled with unexplained events. You can turn back now or
learn the stuff they don't want you to know. A
production of I Heart Radios How Stuff Works. Hello, welcome
(00:25):
back to the show. My name is Matt, my name
is Noel. They called me Ben. We are joined as
always with our super producer Paul Mission Controlled Decond. Most importantly,
you are you. You are here, and that makes this
stuff they don't want you to know. Shout out to
some of the big names listening. Joining our fellow listeners today,
(00:45):
Mark Zuckerberg, thanks for dropping by. Jeff Bezos, Hope things
go well for you with Amazon Prime Day. I guess
that's happening as we record this. Now. There's a strike
going on today with Amazon employees. They're very well should be.
Have you seen terrible things that happened to those employees.
But a lot of folks are calling for joining the
(01:06):
strike in the form of not going to Amazon or
any of its properties today for the next few days.
That's what I've done. But let's let's also point out
that the meme about storming Area fifty one, which now
has picked up with some celebrity recommendations. I think Nathan Phillion,
(01:26):
Jeff Goldbloom, Keanu Reeves and so on. We're posting about
it science fiction stars that has that has gained more
traction than any idea of, say, storming detention centers where
US children are dying or boycotting Amazon, because Amazon is
the new version of the Walmart conundrum. It's just so
(01:47):
gosh darn convenient for so many people. I've also used
Amazon regularly, full disclosure to get stuff for work, as
have I not to derail things too much. I've been
very shocked to see in New York one of like
this liberal bastion um with a lot of young folks
that work in like very kind of like woke kind
of industries or whatever. Everyone gets their groceries from Amazon.
(02:08):
It's crazy, Like you go to an apartment complex and
the doors are just stacked high with Amazon boxes. I
think people are able to be selectively uh kind of
you know, awake two problems if it doesn't like directly
inconvenience them. I think that's most people. Yeah, that's exactly
what I was gonna say. Yeah, I think we see
what's in front of us, and you know what we're
(02:28):
aware of because of the people that are around us.
And that's generally it unless you're fully plugged into your
social network. I would call it performatively performatively moral. So,
for instance, what happened to the child soldiers that everyone
was uh so concerned about in two thousand twelve. They're
still out there, many of them are no longer children,
(02:51):
but new children have been accepted into the ranks. Yeah,
it really is just what is trending right now? And
do you remember the last couple of things. I had
something just as an example that I wanted to chime
in with earlier, and I've completely forgotten it now because
now I'm thinking about this, it'll come back to I
guarantee you. Unfortunately, there's there are no shortages of different examples.
(03:15):
And of course, I mean, if we want to be
optimistic about it, every little bit counts. Your actions do matter,
regardless of what some people will try to make you
think when they don't want you to take action. But
speaking of actions, how are how are the weekends for everyone?
Paul Mischion Control good weekend, thumbs up, thumbs up, Gotta
(03:35):
we've got a nice streak. When michig Control nowadays, it's
been pretty much thumbs up because he's living his best life.
What'd you know it? How about? You know? It was good?
I went and visit my mom in my hometown of Augusta,
g A. Uh. My kid was in a church choir camp.
So I went to a church service for my first
time in many, many many years. And there were some
(03:56):
things about it that I had forgotten about, like when
they passed the election plate and yeah, sure is at
the end you put the money in, you do put
the money out, you put it in. That's right, that's
definitely right. Then you've got me there. Um. But the
ushers at the end take the plates and hold them
aloft at the altar. Whoa, and is that a thing?
Are you aware of this? Yeah? I don't know. It's
(04:18):
it's a Methodist church, so maybe it's just a Methodist thing.
But yeah, they all convene down on the floor, three
of them, and they hold the plates up like as
an offering too, you know, the the deity. That's nice.
I was doing something similar. I was getting together my
my e coin wallet. I realized that I hadn't been
doing any kind of like I don't know what you'd
(04:38):
call maintenance on it, like figuring out exactly where all
my stuff is and my portfolios and all of that.
But um, over the weekend, just I'm ready to use
e cooin again. So they have what do you have?
It's just it's your standard wallet. Really, you know where
the income goes directly into that account. And I mean
you're talking about like lightcoin, bitcoin like you're talking about
(04:59):
different like coin. Yeah, you know, yeah, it's it's it's
e coin. It's just the one that uh ecorp is,
you know, introduced a while ago. I don't know, I
don't it's my favorite one. I wish you suck. I
wish you luck in your endeavors. Uh And this this
is a show that we personally love. I I've thought
about this before, and I would hazard the same case
(05:21):
goes for you, Matt. If you came into a financial windfall,
you'd probably still want to do this show. Huh oh yeah,
I would. Just I mean I would just put put
more money away in my coin. I quietly buy up
our company. I mean I have fantasized about that. Me too.
I've fantasized about quietly buying up the company. Going to
(05:41):
work every day without telling anyone, anyone the case until
there was an all hands meeting, and then just saying
talking out of my neck, as we say in the South,
making some crazy proclamation, and then when someone tells me
to calm down, say, you know, reveal that I own
I own the company, or some kind of I'm imagining
(06:02):
some kind of play where you just correct the CEO
or something, just just like a small correction, be like,
just do it openly and publicly, and to actually homepst
off because that's ridiculous, I would say from me now. Uh,
and maybe just shark tank it, you know, maybe just
fift that's all you need. We want to hear how
(06:26):
things have been going in your neck of the global woods.
So please don't feel like you have to wait until
the end to contact us. You can pause the podcast
right now. You can leave us a review that always
helps us get a little bit closer to the good
graces of our corporate overlords, a little bit further away
from being fired. Uh. And so until until we secretly
(06:49):
buy our company, we love some reviews from you when
your fellow listeners, how about you been, How was your weekend?
I had a lot of stuff happened. I was I
was actually in town for this weekend. I will not
be in town for the next weekend. There's a lot
of travel. But who worked I've I've been working on
some various projects. Um yeah, that'll that'll overall be checked
(07:14):
special checks. I love that transparency. I've been open booking
a meadow on a sunny day. Guys, But how are
your kids? My kids? The ones I know, the one
I know about this is good. She she did a
really good job in her choir performance. I don't want
to be a bummer. I saw something pretty crazy this weekend.
I saw a hit and run accident. I saw a
(07:35):
gentleman crossing the street in my hometown get hit by
a giant Ford F one truck and it was very upsetting.
And uh, I will say this, I always say this
about my hometown. There's so many cops just lurking around
trying to kind of nail people for the US and stuff.
This was one case where it was really I was
really glad they were around because they immediately chased the
(07:57):
guy down. They caught him, and the ambulance was there
and like a minute and a half cop was there
to talk to the guy and talk to witnesses, and uh,
you know, it was a good example of efficient policing
and first respondership. And I witnessed at first hand. Did
you report as a witness? I did not because there
was somebody that was directly with the guy. There were
(08:18):
several other people that were there. We was kind of
were passing by. We just moved on. But you know,
this strange thing is twenty years ago that may have
been perhaps a headline in the local newspaper, but may
have been forgotten pretty easily except for the people directly involved.
That's all changed nowadays. And I would argue for the
(08:39):
past decade at least, probably more probably closer to the
past fifteen twenty years. Social media has become the primary
currency and amusing netword, uh a little bit, a little
bit in a cavalier manner. Social media has become the
primary currency of communication for many, many people. And when
(09:00):
we say social media, we think of several things. One
of the most popular is Facebook. You might love it,
you might hate it, but there's no denying Facebook is
a huge, gargangel and tremendous business, and it seems set
to stay. It's just it's in us now, in our species.
If you would like to learn more about what Facebook
actually is, where it came from, and what it can do.
(09:22):
Check out our earlier deep dives on the subject in
previous episodes. You can also check out tech Stuff by
Jonathan Strickland that has a great look at the nuts
and bolts of Facebook as it stood. Of course, every
Facebook episode needs to continually be updated because they are tricksy,
they are clever little varmints, and they will they work
(09:45):
to uh circumvent legislation, and two they would say address concerns,
So we'll always have to do an update. We'll probably
have to do an update on today's topic in a
few months. So let's just get a real quick recap
on Facebook and and all all this weird e currency
stuff before diving into the newest, strangest Facebook ambition and
(10:09):
why some people might tell you it is a conspiracy.
So Facebook, here here the facts. Yeah, that's right. Facebook,
primarily at its source is national multinational conglomerate. Now I'm
just kidding. It's a social media platform, and it's also
Instagram and a bunch of other things, all kinds of communication. Primarily,
(10:33):
let's talk about Facebook, the social media platform which you
know has seen a slow down in the number of users.
But when we say slow down, we just mean it
isn't at that extremely rapid rate that it was for
you know, years and years. They currently have two point
four billion billion monthly active users. And ben if it
(10:56):
were a country, it would be where does it lie
in our est there? Oh, it would be by far
the largest country in the world by population, almost double
the population of China, which is a little more than
one point three billion people. So this is two point
four billion, and it got to that number. It became
(11:16):
the largest thing in terms of population very very quickly
because it started originally restricted to college students in two
thousand and four. From two thousand four two thousand nineteen,
that's a that's a heck of a growth, even with
that slow down that we mentioned earlier. We have to
remember that the more people, the more access people in
(11:37):
emerging economies have to the internet, uh, the more Facebook
users are created. Yes, and it's a very important point
there that Facebook is global. It's not just a that's
what I was joking about, the multinational conglomerate thing, just
the concept that it exists in every country that has
access to the Internet, and people everywhere are using it. Now,
(12:01):
here's the big question. Let's say you've got a giant
social media platform like that. How do you leverage something
like that that's free for people to come on and
use however much they want? Yeah, how do you leverage
that into making money as a giant corporation with overhead
and employees and all the things you gotta pay for. Yeah,
that's the thing. That's We've said it before on this show.
(12:22):
Many other shows have said this. It's even at risk
of becoming a cliche because it is true. If you
do not pay for a service, you are the product.
That is absolutely true. Uh, and unfortunate. But that's how
Facebook makes a ton of cash. They sell the data
they aggregate about you, your friends or perhaps your ex
friends and your enemies and so on, and they package
(12:45):
this to advertisers. They package this to research firms, Cambridge
Analytica being one, and then they they sell this. You
do not get a cut of this. Then your data.
You can find different pundits estimating how much your data
as an individual as worth. Uh, it's not very much,
but it's still more than zero, and you get zero.
(13:07):
That's not the only way Facebook makes money, though, they
also have Facebook payments, so it's similar to like Venmo,
those kind of peer to peer things. And Ben kind
of mentioned this in that first go around with the
selling you the users data essentially and leveraging it for advertisers,
because that really is one of the primary ways that
(13:28):
Facebook made money for a long time, which was just
having ads essentially appear as posts within your feeds. Then
one of the biggest reasons advertisers will use that is
just like Ben said, because of the tremendous amount of
information they have on you and they can target stuff
to you so directly. And was this before they had
to identify them as sponsored posts or something like that,
(13:50):
or I think originally, Yeah, I think that's correct. So
if we did it, if we looked at how this
breaks down in six streams, we would say self serve
advertge rising. Let's say you have a great show, um, like,
let's say Paul makes an independent docuseries called the Age
of Applebee's and wants to promote it on Facebook. Then
(14:11):
you can give Facebook money and they will in their
ad manager they will attempt to show more people who
would be interested in the Age of Applebee's post about
the Age of Applebee's. By the way, Paul really enjoyed that.
He gave me a great smile. It's true. It's true.
You have to have you have to have a mission.
You gotta stand for something right. And then target advertisements,
(14:34):
which you mentioned, Matt that be the second Facebook Messenger
ads would be the third, video ads would be the fourth,
Facebook Mobile would be the fifth. Uh. Facebook's mobile app
in generated more than of their ad revenue, which surprising, right.
And the the idea of data generation is tricky because
(14:59):
they're not as far as we know, Facebook is not
purposely purchasing and selling specifically like Matthew Frederick's data or
Noel Brown's data. They're create their aggregating it in a
way that they would argue as anonymous. Yeah, it's all
nationalities or income brackets or all these you know, genders
(15:23):
wherever they need to do separating about so that you
can buy this swath of humanity. And as we record this,
if you if you're listening, you're saying, all right, guys,
to talk about this all the time. What does Facebook
actually have on me? What do they know about me?
You might be surprised, but you can still find out
if you go to the Facebook setting page, find the
(15:43):
tab for general or something like that. Eventually, the they'll
change the click through that you need on on a
pretty frequent basis. But eventually you will find an option
that allows you to download a copy of your Facebook
data and it will be everything. It will be more
than you thought. Yeah, so you can also nominally control
(16:07):
some of the ads that Facebook puts in your face.
But that's I mean, that's the nature of the game.
They're pretty clear about that. So, yeah, we know what
Facebook is. We know what Facebook is. But oddly enough,
and this this might be controversial, opinion, might be a
hot take. Some people don't trust Facebook? Wait what I know? Right?
(16:30):
They seems so friendly though, and they give you all
this free content, And why wouldn't you trust someone who's
giving you all this stuff? These games? Farm Bail, Farm Bail.
If you can't, um, sop up that sarcasm that's dripping
out of your headphones right now, I feel bad. I mean,
get some bread, maybe UH can make use of it. Um,
So Ben, why don't people trust Facebook? I'll play your
(16:54):
reindeer games, Matt Let's and Paul, you ll have to
edit me here, but this is the best way to
say it there too categories. Let's divide into accidental cups
and purposeful overs so it sounds good. The the accidental
stuff would be the stuff that happens to any big
company that is keeping so much stuff. Data leaks, right,
(17:14):
identification of people in a way that may stymy their
professional growth or literally endanger their lives. There's a story
of a therapist who learned that their their patients, we're
starting to show up in each other's people you May
Know list, you know, the thing that tries to sort
(17:35):
of nudge you into stalking folks. And then there was
another case where members of law enforcement would see people
they put in prison popping up on their people you
May Know list, and if they're on your list, you're
probably on their list. The abyss stairs back. Yeah. And
then the purposeful stuff would be complaints of using or
allegations of using aggregated data to target people who would
(17:58):
be vulnerable to misinformation and propaganda so on. And in
the age of deep fakes, that becomes more and more important. Right.
And then there are all kinds of scams that exist
online that sometimes use Facebook as a way to get
you to click on a link. That's one way, But
that's not necessarily Facebook of doing it, but it's Facebook
(18:22):
allowing it to happen. There you go, And then with
this goes into a conversation Nolan I had had briefly
off air before, which is, how do you decide and
we want to hear your take on this, two folks,
how do you decide who to accept or who to
ignore when it comes to friend request? M M. I typically,
(18:42):
I think we talked about this. This is exactly what
we talked about. Ben. If I have a few mutual
friends with that person, then I I'm more likely to
accept it if it's clearly someone that's just a fan
of the show had more rather than follow me on
Instagram than than on Facebook, because Facebook, to me, is
more like for people that I actually no no and
interact with, and that that's just to me seems like
(19:03):
the Facebook rules. So I'm less likely to accept a
Facebook friend request from somebody I don't know. But on
Instagram you don't have to accept, they just follow you.
So it's a little bit different game, you know. Yeah,
you can only shut off everybody and make it private,
or you can just keep it public and block individuals.
You can block individuals yeah, yeah, I know exactly what
you guys are talking about. No, I'm yeah, I mean
(19:24):
I get it. Your fingers on the pulse, I can see. Yep,
that's what it sounds like. Ye. So, so what you're
saying an as you accept no outside friend requests or
you don't even have a Facebook page, I might you
neither confirm nor deny either, just kidding. I'm friends with
you guys, that's true. Taking the same tax that the
(19:46):
government in Israel it takes with nuclear weapons, right, yeah, yeah,
I yeah, I am to social media as Ben is
to everyday um, talking about what's occurring in his life.
Does that make sense? Transparent? You is shoe? It entirely
(20:08):
the kind of person who's like a m A, don't
say anything. Yes, Uh, let's let's ask each other about cryptocurrency.
We're promising we're going somewhere with this cryptocurrency. We did
an episode with Jonathan Strickland on this right, two parter.
It's two parter, that's right. Uh, And it's easy. It's
easy to do a two parter on cryptocurrency because there
are so many different and at times difficult angles to
(20:32):
take here. But what what is a cryptocurrency? It's a
cool name crypto, but why why do we call it that? Well,
if you want to go deep dive beyond the topics
that we discussed with Jonathan on so that I want
you to know, you can check out text stuff, which
has several fantastic episodes on the subject. But essentially, if
for our purposes here, cryptocurrency is a digital or virtual
(20:54):
currency that uses cryptography for security. And that's as simple
as that. A cryp toocurrency is very difficult to counterfeit
because of the fact that it is uh encrypted in
this way. And many of these cryptocurrencies are decentralized systems
based on something called blockchain technology. It's a little tough
(21:15):
to go into deeply in a quick, you know, bite
or two, but you really should check out that Strictlan
episode or the tech stuff series to get a deeper
understanding of what blockchain is. But essentially, it is a
distributed ledger. Um. Yeah, the ledger just like a written down,
you know and sell spreadsheet or just any kind of
list of figures that is enforced by a disparate network
of computers. Meaning that a defining feature of a cryptocurrency
(21:39):
and arguably one of its biggest most powerful features is
its organic nature. That it's not issued by any central authority,
and that fact renders it theoretically immune to government interference
or manipulation. But at the same time, as we know,
it's still very volatile despite any government interaction. Right, just
(21:59):
a simple by some of this stuff. This whole idea
of the ledger is very powerful for cryptocurrency because imagine
that if you've got a dollar in your wallet right now,
or wherever you keep your your money, your fiat currency,
you pull it out, and somehow by touching that dollar,
just by interacting with it, you could see every single
(22:21):
time this this piece of money has been spent since
it was minted, since it was printed out and cut
up right, right, That's how bitcoin works. We're using technology
to create what once would have been relegated to the
realm of psychic powers. One of my favorite psychic powers,
by the way, psychometry, the idea that one can learn
(22:43):
the history of an emotionally charged object through physically touching it.
This power is perhaps most famous in the excellent movie
Vibes starring Jeff Goldbloom and Cyndi Lauper, which I do
have on DVD. If anyone's interesting. I've not heard of
the masterpiece Vibes has okay, So in Vibes, Jeff Goldbloom
(23:04):
and Cyndi Lauper's characters have psychic powers and they work
at this research facility. They eventually go on on a
wild misadventure to a mysterious object in Peru. I believe
Jeff Goldbloom does catch Vibes and like he is in
every movie except for arguably The Fly, He's just Jeff Goldbloom.
(23:25):
Its smoldering with his with his powers, and so he
can touch things and he can know what happened to them. Vibes.
Can you may do a good Jeff Goldbloom impersonation? It's
really hard to nail. It's easy to get to like
an eight out of ten, but those extra two points
are very different, true, because it's like fifty, it's like
six stutter and then like the rest of the percent
(23:48):
is pure charisma cadence. So I don't want to sideline
us practicing my eight out of ten. It's not worth it.
I'll get it up to at least eight point five
and come back. But like like our Jeff gold Bloom impressions,
bitcoin and cryptocurrency as a concept, has a number of
(24:09):
pros and cons. One, as you mentioned Noll, it's decentralized.
This means theoretically, one injury to the system or malfunction
will not bring down the system and in its entirety.
There's also no government manipulation of currency in theory legally
because no government controls it. Right, So when we say
(24:30):
currency manipulation, it's something you hear a lot with maybe despots,
or people are in unstable times in the country and
they say, well, now everything is, We're just gonna chop
a zero off of everyone's bank accounts right to to
get right internationally here or this is no longer the
(24:51):
new currency, only this, but it also leads to cons
the same. Lack of government over site means there's outside
the self regulation in the way the system is built,
which is very clever. And by the way, no one
still no one knows who invented cryptocurrency. Uh, there's no oversight,
and this could lead to volatility because cryptocurrency, by and large,
(25:13):
like FII currency, has no basis intangible assets. It's none,
it's done if it if it changed value tomorrow, if
if every bitcoin, for example, the most famous cryptocurrency shot
up in value by ten dollars were shot down in
value to less than a penny per bitcoin. It would
(25:37):
it would not be because a tangible asset changed. There's
no gold in some sort of secret cryptocurrency Fort Knox,
you know what I mean. And yet it's it's funny
because it's been likened to the way gold miners essentially
would function. When you're talking about the people that are
actually doing the bitcoin mining and all of this, because
(26:01):
as the price rises, more people are I think it's
viable enough or they're going to make enough money doing
the mining, right, because it's worth enough. And then when
it falls, not many people will be mining them because
it's too costly to actually perform the function. You're not
going to make your money back. So it is this
and there's this interesting analogy there with a tangible asset,
(26:23):
even though it's literally, like you said, been attached to
nothing right. Right, And now we have to also mention
that cryptocurrency is very useful for crime. It's no one's opinion,
that's just the fact. The things that make it good
for some legal things also make it good for some
illegal things. Now let's smash them together. In today's episode
(26:45):
of What could go wrong. It's correct, folks. We didn't
just decide to switch the plot halfway through the beginning
of the show. Facebook, you see, wants to start its
own currency. Some people, mostly people who work for face Book,
where its corporate allies, think this is a fantastic idea.
Other people fear it's something more sinister, something dangerous, even
(27:10):
a conspiracy. And it's about to get crazy. Right after
this word from our sponsor. Here's where it gets crazy.
Enter libra libra, not the zoodiac sign. No libra libra.
(27:32):
It's like zebra within with lee libra or book in
some languages. Yeah, it reminds me of my favorite dead currency, Lira.
Remember when Lira was a thing in Italy, right, it
was a fun one. Now it's all boring euros. Well,
there you go. What is libra? Oh yeah, hey, Matt,
what's libra? It's uh, this is Facebook's cryptocurrency, or at
(27:56):
least it's their attempt to get into this, uh, this
game of cryptocurrenting. It's a it's a blockchain approach very
similar to what you know we discussed there with how
bitcoin functions or other cryptocurrencies. Uh. And again it's uh,
it's an idea. But here's the deal. It's not like
it's just you know, somebody pitching stuff around a boardroom anymore.
(28:21):
It's actually happening. It is. Facebook has partnered with twenty
eight different companies to create uh this, this proposed cryptocurrency network.
They call themselves the Libra Association, which sounds like a
real a real James Bond Roger Moore era name for
(28:41):
uh uh consortium of villains, you know, like Specter, the
Libra Association, and of course they have the scales emblazoned
on all their stuff. These companies conclude companies you may
have heard of, big big names, MasterCard Once In on
the Game because credit Card has been worried for a
while that they might lose those sweet sweet transaction fees,
(29:03):
PayPal Once In on the Game, Uber Lift, and more
like Vota, Phone Visa. It's there are no small players.
These companies, financial companies, e commerce and venture capitalists, telecoms
and so on are each gonna invest around ten million
dollars that into this association that will be in charge
(29:24):
of the Libra. The association wants to grow to a
hundred members with an equal vote over time, and Facebook
expects to quote maintain a leadership role through twenty nineteen.
But what what what is this? It's a secretive project.
It revolves around that digital coin, the Libra, and the
ideas that users on Facebook or any of the other
(29:47):
platforms like an uber app, for instance, could send Libra
to each other in place of dollars and use it
to make purchases on Facebook's platform and across the internet.
That's right, And um, I'm saying that the appeal here
is because of that decentralized approach and in this system.
In this system, they use something called nodes. Right, So
(30:08):
Facebook wouldn't directly control the coin, hence the decentralization, nor
would the individual members of this consortium, which is known
as the Libra Association. Some of the members could serve
as these things called nodes. UM a system that verifies
transactions and maintains records of them. That sounds familiar, creating
a brand new payment network. According to the people that
(30:30):
are familiar with the setup. Um, it's not a particularly
new idea. That goes back to seen when an exact
at Facebook named David Marcus had this kind of aha moment, right, yeah,
he said, what if we could also control the currency, surprise, surprising,
came from PayPal right right right before he worked on
(30:50):
this project. David Marcus was the head of Facebook Messenger,
which has been tremendously successful from their definition, and before
his Facebook days, he worked at PayPal, and he says
the idea came out of his early days over at
the Big PP, the idea of a financial network that
existed outside of the world of central banks, and central
(31:10):
banks are, by the way, in charge of pretty much everything. Well,
that's my question though, right, you can't generate this currency
from nothing. You have to exchange actual accepted currency into
the system and then you get it, you know, an
e currency or whatever. So what's the benefit here of
having a currency versus just having a platform like a
PayPal or a Venmo or something like that. There are
(31:33):
some for Facebook, right, So over the past two years,
again this plan is not super old. Over the past
two years, details of it gradually emerged. They bought Facebook,
that is, bought a company that was working to make
blockchain processes a lot faster. And the primary thought here
was that Facebook would do remittance payments that's where you
(31:56):
send money across borders overseas, and they would would on WhatsApp,
and they would pilot it in India because in the
subcond in the country of India, a lot of people
in the diaspora live abroad and they send money either
to their families like living in the UK or something,
or they send money back to families or businesses living
(32:17):
in India. So they thought this was a tremendous market.
You know, the timeline matches up interestingly with you remember
those stories coming out of India where certain currencies were outlawed,
the smaller or the bigger currencies. Yes, due to corruption. Yeah,
I don't know whatever happened to that. The explanation of
the etymology is that libra is an homage to the
(32:39):
French livra or that's French for pound. We should also
mention here that David Marcus is a native French speaker.
So why do it this way? Why partner with twenty
something other companies instead of just being Facebook money? Why
can't they just be facebooks? I mean, admittedly I'm typecasting
here because I in love with that kind of idea.
(33:01):
Go bend bucks the real alternative currency. How's it doing,
By the way, it's great. Actually, it's on the up
and up. So the simplest reason for Facebook to assemble
these avengers is that they are very, very interested in
not looking like Facebook to you too, why to anybody
using this. So the decentralized approach helps them function via proxies.
(33:25):
You may never have a Facebook page that you have created,
although Facebook almost certainly as a shadow profile. View by
now you might say, well, I've never messed with Facebook.
I do have to use Uber, and Uber takes Libra
or they offered me a deal, a discount in Libra
instead of dollars, So all I have to do is
(33:47):
sign up for a Libra account. So that sounds great,
and it's basically just my Uber payment system, and that's
all I'll use it for forevermore. But then secondly, there's
a practical approach you might not try is Facebook, but
you may trust Uber, right, and you do have to
trust one of the other partners involved in this for
(34:07):
this to work. Also, because they're restricting that network, they
can speed up interactions within the network and keep it secure.
They're big tech questions. Is this actually a blockchain? How
does it function in comparison to you know, Bitcoin or
ethereum or sending money on PayPal? Uh, it's faster, and
(34:28):
it's easier because it's a high cost transaction on Bitcoin,
You've got all this processing power you require to keep
it running and secure and just really quick too. Before
we get into fully into the block chain things, let's
not forget that that whole decentralization thing. You bring in
the twenty eight members and eventually one hundred members. Even
(34:48):
though Facebook has, as we said now in two point
four billion monthly active users, all of these other companies
bring in their own chunks of portions of billions of users.
And perhaps the people who use Uber who are a
little you know, more savvy about one thing, or the
people who have a certain credit card, or the people
(35:09):
who are using a Vota phone or whatever, maybe they
aren't Facebook users, and so it's literally pooling everybody. Right,
There's another there's another issue that differentiates them. Reliability, volatility.
To start with, the libra will be pegged one to
one with the US dollar, So one libra one U
(35:32):
S dollar. You'll open, uh, you open a happy Birthday
card from your aunt as moral dean or whatever, and
she gives you a gift card for twenty libra to
spend on Facebook marketplace, like, oh thanks, because that's basically
twenty dollars. So does it become an issue where it's
like only certain vendors will take this, so you can't
(35:54):
use it anywhere. So the idea is to centralize, like
do you use this as a in a in a
way where it forces people to shop, to narrow their
shopping choices as well. Right, Yeah, that's that's part of
That's definitely something that they would have to be discussing
in the back rooms and internal meetings. It's not there yet,
but we have to remember sesame credit used to be
(36:16):
opt in and would never be mandatory, and now it is.
So this is another slow boil situation. Eventually, Libra will
be tagged from what they call a basket of currencies,
which is how international economists talk about this pretty often.
Facebook is still figuring out how this is gonna work,
(36:37):
but their goal is to keep it keep the Libra
from being unreliable, and that's why it is fully backed
by a reserve of quote real assets named Libra reserved.
Of course, when you say real assets in the world
of economics, we're not necessarily talking like one horse for
every two libra or something like that. It's also very
(37:01):
very cheap price for a horse. We're talking about things
like um, things like bonds or some something that generates
this rate of return and debts and debts. So that
is the basic elevator pitch that they're using for Libra.
But how will they actually use this thing in the field?
(37:21):
What do they want? Why are people excited at Facebook
about it? Why are people worried pretty much everywhere else
about it? We'll tell you after a word from our sponsors.
All right, we're back. Let's get into this. Here we go.
So the Libra Association is the only party, the only
(37:45):
people involved in the whole process that we'll be able
to create and destroy Libra. The terms there are to
mint or to burn. Isn't that nice? Uh? And the
coins are only minted when authorized resellers have purchased the
coins from the association with those currencies that we've talked about,
the basket currencies, those FIAD assets, and uh, they they
(38:07):
actually back the coins fully. So this coin is backed
directly by this portion of the basket. Right, Okay, But
here's here's the issue. They're still trying to figure out
exactly how they use this stability, and they have a
troubling aim so we mentioned Originally this would be for
(38:28):
payments across international borders, right, instantaneous payments across international border,
and they would probably be cheaper than the fees levied
by wire transfers. However, they also want this to be
used in countries where the money supply and currency value
is volatile or unreliable, essentially functioning as a viable alternative
(38:50):
a parallel currency. Yes, so this means like Zimbabwe, for instance,
has been waging economic warfare on its own people has
been the subject of that economic warfare abroad, and the
currency as hyper inflated. But what if instead of going
through the government or going through um, another government's money,
(39:12):
you could just pull up your app. Isn't that like
almost like tantamount to like a financial coup? Yes? Right, yeah,
I mean so it's like but they could disguise it
as philanthropy, right and say, oh, no, we're doing a
good job helping stabilize these countries, but they're obviously not
doing it out of the goodness of their hearts, right right, right?
(39:34):
What happens if people in these local economies dump all
of their money into libra because it retains the same
value the next from one day to the next and
then no one uses the actual state currency. Wouldn't that
cause more economic chaos in that community while also profiting
Facebook and zizz Uck Mark Zuckerberg. It's jis Ck zizz
(39:59):
Ck that's like is that like his like demon name.
I love that he's like Malok and Ziska the Germans,
but Zizouck. So this, this idea, this danger is real
and the critics, the critics have differing varieties or degrees
of extremism here. You know, some critics are saying this
(40:23):
is a mistake that could happen, and other critics are
saying you, you people are doing this on purpose. You
know what's going to happen, and you just want your
bottom line, you want more power. It's true, as you said, Matt,
that the Association, members of the liber Association, the only
people are only entities rather that can create and destroy coins,
(40:43):
and the coins are only minted when people have purchased
the when authorized resellers have purchased the coin from the
association with assets that backed the coins fully, and the
coins are only destroyed or burned when those resellers sell
the coin to the Association in exchange for those underlying
(41:05):
assets so high Libra Association, here is a horse, give
me coins, and they'll create coins and they'll say, all right,
we'll hold the horse. And then in theory then someone
comes back and they say, okay, here are my coins,
give me that horse, and I'll be like, all right, boom,
and we'll destroy the coins because the asset for the
coin no longer exists. That's the idea, A little bit
(41:28):
like a shell game, you know what I mean, A
lot of stuff could get could get shuffled out. So
that's that's that's the concept. And here's an example. As
a normal user. Let's say you had let's say you're
Noel Brown. You have a hundred dollars worth of Libra
and you got it because you spent a hundred dollars
(41:50):
in cash. Now you can use this Libra on any
of these platforms that play these reindeer games, or you
can send it to a friend. You can say, you know,
I've on the Patreon for Mission Controls age of Applebee's documentary,
and I wanna I want to drop fifty Libra toward
this cause, because let's get it in festivals. Let's take
us on tour. People need to know about the bottomless
(42:14):
chicken fingers or whatever. So that's the idea. The big
question is how do these folks make money off of it?
Because they are not, as you said, doing this out
of the goodness of their hearts. The Libra Association, which
is legally speaking a Swiss nonprofit, put your one hundred
dollars into a bunch of low risk short term investments
(42:35):
treasury bills, etcetera, etcetera. So, for example, in July of
two thousand nineteen, a one month treasury bill was yielding
two point one to five on a year on a
yearly basis. So that means that since they bought those
treasury bills with your money, they will earn two dollars
(42:57):
and change on your one dollar per just but you're
not necessarily entitled to those profits. You get none of that.
And think about it this way. All of those member
corporations are putting in ten million dollars of their own
money as seed money for this thing, right, so that
the Libor Association begins with two eight million dollars in
(43:18):
that account, and then as they add in more members,
they're adding ten million dollars more. And then as people
are putting their money their actual fiat currency and exchanging
it into libre dollars. That pool gets bigger and bigger
and bigger that they're purchasing these things with, and that
interest becomes massive. So the appeal on the users on
(43:38):
the consumer side is the stability of the currency, whereas
like with like Bitcoin, for example, you know it it
tanked and then it went way high and it's really
all over the place. This would not be that same
kind of speculative gamble that people do with like other
e coin. Right, that's the idea. Yes, that's what they're
selling to the public, right, but what they're selling internally
(43:59):
is a massive amount of profit, a huge pile of
as you've said before, pony bones. To to size it up,
let's let's look at an example. So the Federal Reserve
tracks the u S money supply in a couple of ways. One,
let's just call that M one Money one. Money one
(44:19):
is what we would define the sum total of cash, coins, money,
and checking accounts right now, that's about three point seven
trillion dollars. M two would be everything in money one.
Money two is everything in money one plus savings accounts,
money market funds, co d s, other kinds of bank deposits.
(44:41):
That number is more than fourteen trillion. So let's assume
a few years go by, and this is a great
example I believe in wired or Investipedia. Let's assume that
after a couple of years have gone by, Libra has
achieved about ten percent of what we would call money one,
(45:02):
So about ten percent of the money and money one
has been somehow adopted or associate with the cryptocurrency Libra.
And let's also assume by this time Libra has sold
a billion dollars worth of the investment token. Oh, which
didn't mentioned. Libra is actually two currencies. Yeah, you've got
the one that everybody like that we're basically talking about
(45:24):
right now, the Libra, the one that you will eventually
be able to use. Unless you are, let's say, a
member of Facebook or you work with them or one
of the associations. You get these things called investment tokens.
And these investment tokens are much more expensive. You know,
your company twenty nine, you're you're not buying Libra, you're
(45:46):
buying at Libra investment tokens. And so let's let's assume
that they sold a billion worth of those tokens and
it cost a billion to run the network and manage
their investments. And let's say that the Treasury bill holds
the same little over two percent return over a year
after all those expenses. With that, with ten percent of
(46:06):
the US population using this libra would be generating just
an interest about seven billion dollars a year. That yearly
return on investment, just just to put that in perspective,
is six hundred eight point five one percent. So that's
ten the M one number, ten percent of the M
(46:29):
one number, right, which was three point seven trillion dollars.
That's that's I mean, that's a lot of money, but
it's only ten percent of the known dollars that are
going around almost a seven d percent return. Now that's
if all those conditions we just outlined go through. Sure, why,
(46:49):
how how can we allow this? That sounds just like
members of the Federal Reserve Congress, because there are some controversies,
like their hijacking the monetary system for their own personal games.
It's like the one it's one of the few things
that it seems people on the far right and the
(47:10):
far left agree is dangerous. Maybe it's because no one
in Congress has a sweet enough deal yet with it.
Maybe when they're getting some investment tokens, they'll be okay
with it. Oh, that is happening right now. So now,
just today as we were recording this, uh, members of
(47:31):
Facebook were testifying to Congress. They were speaking to Congress
about this, and their questions were things like, Okay, you
guys are essentially proposing to be a bank and call
it cryptocurrency if you want, but what you're describing is
not cryptocurrency. You're describing a bank. We have banks, and
they have rules that they are theoretically supposed to follow.
(47:53):
So you have to do regulations, right, Like, how are
we going to work this out? But this is this
one of those things where it's like a disruptive thing
in the same way that Uber doesn't have to go
into the same regulations as the taxi cab industry, etcetera.
Until the laws catch up. But you know, for a while,
it's like a feeding frenzy free for all. Right, So
if they like pass this, yeah, maybe eventually the laws
(48:14):
will catch up and they can, like you know, uncle
Sam can get his due. But right off, the rip
probably not gonna happen. It's gonna make a lot of
a few people and a lot of money. This is
also not a US based company. We have to remember's
basically an offshore account. If it's Swiss with nonprofit everything
about the stinks. I don't like it. Well, I mean
(48:34):
it's pretty smart. Imagine if you could get just imagine
if you could start a bank that's not a bank,
get in the market, take over of all the currency,
all before the regulations catch up to you, and then
by the time they do, you're too big to fail.
So it's just like, yeah, they got a play ball
with you because you now own the system. It's that old,
(48:57):
it's ill quote when you hear about very wealthy people
getting away with financial crimes or robbing banks. Essentially, I
heard a quote that I thought we would all enjoy,
which is, uh, if you owe the bank a thousand dollars,
that's your problem. If you owe the bank a hundred
million dollars, that's the bank's problem. What about fd I
(49:20):
C protection my my depositive wells Fargo is guaranteed up
to dollars, That's what we're saying. Yeah, but I'm saying, like,
does that apply here at all? No? Right, well it
would it would have to. Again, this proposed it Uh,
if it obeyed regulations. Yeah, one of those regulations would
be being fd I C and short. But that's just
(49:40):
one of the problems. Another problem is privacy. Given Facebook's
frankly hilarious track record with privacy, you can understand why people,
regardless of whatever their personal leanings are, might not trust
it to have a finger in their personal finances or
commercial finances. What happens when liber gets hacked? Oh seriously,
(50:00):
because it doesn't even matter if you've clicked the little
button that says share all of my Libra purchases on
my timeline, because that will be a thing. It doesn't
matter because people may find out, Like Ben said, if
if Facebook gets hacked, if that private information is then
sold to a third party at some time on determined
time down the road, like your entire purchase history could
(50:24):
and would very much be available right right. Uh, Facebook
has become or the Libra Association excuse me? Is Jeff
Goldblooman vibes they can touch a Libra and they can
see everywhere it has been and that that could help
to be fair, that could help combat some of the
crimes that this will inevitably be used for. Is this
(50:45):
also just another step towards moving us into a cashless economy. Yes,
very much. So my question is this too, Like, it's
a it's a balance, right, because on the one hand,
getting rid of cash certainly cripples like some of the
cartels and like illegal drug trade. Right, you can't buy
cocaine at a bar with libro yet, Mike. But but
that's my question. They're like, how how does this balance out?
(51:07):
Like obviously one of the issues here too is there's
a it's a haven for money laundering potentially, there's a
lot of problems there. But also removing cash, you could argue,
would cripple some of the very nefarious nastiness that comes in,
you know, with with drug smuggling and the ability to like,
you know, pay for that stuff with cash. That's true,
(51:27):
but we also have to consider our species thought the
same thing about bitcoin, and then bitcoin was used for
illicit arms deals with terrorist organizations because of that and
that difficulty tracing it. And let's just talk about you
can venmo somebody at a bar snacks, So why would
(51:50):
you not be able to libra something. You're totally right,
You're totally right, I mean, yeah, you can, just couldn't know.
I think what Matt's pointed, you can't call it anything. Yeah,
you just do a little cute emoji from you know,
like like thumbs up, you know, and in very much
like a social media perhaps the only things that Libro
(52:10):
would know is that this transaction occurred between these two
wallets or Libra accounts. Essentially, it's not going to know
what it was for because like a social media account,
it knows what you tell it. But what happens when
that person goes to jail for selling drugs and then
you're in their transaction record? Does that mean you get
in trouble for buying drugs? It's like the old Dangerous
(52:33):
It's it's like the old dangerous Kevin Bacon game or
the n s a leap frog surveillance, you know what
I mean. It's it's a question that hasn't been answered
yet and it could have found effects on global and
local economic stability. This is an ongoing story, that's the thing.
The details of this are going to change. President Donald
(52:54):
Trump or current president Donald Trump. FED Reserve Chairman Jerome
Powell and others have already been very concerned about this idea. Uh,
they're talking about money launching, They're talking about manipulative trading, right. Uh.
Some Democratic members of Congress called on Facebook to stop
working on Libra until Washington is satisfied that this is
not some sort of dystopian corporate ocracy replacing the state, right,
(53:19):
and to push pause, you know, just long enough for
them to buy all of those congressmen right, because there
is not an insider trading law that really applies to Congress.
So yeah, recently, as we said today, Marcus testified to
Congress to address concerns about this, and he said the
Libre Group will work with the Federal Reserve and other
(53:40):
central banks to make sure Libra doesn't compete with sovereign
currencies or interfere with monetary policy. How other what's the
point then otherwise? How But that's what I'm saying, Like literally,
I think he said they're not going to do is
the thing that makes it profitable is the fact that
it is doing that. Right. I don't understand the You
(54:00):
could just color as skeptical on this one, because it
does feel conspiratorial for him to be in Congress being like, look, guys,
we made the Giant Sea Killer death ray as a
safety measure because the oceans are being very polluted. We're
(54:20):
not going to use it on you, though, I promise
to insinuate that we would use the giant sea killer
death ray too in any way harm the ocean is
frankly offensive. This line of questioning. We're just we're just
building this giant death ray thing for our own benefits
(54:41):
because it generates us death ray interest. So check this out.
This is the other thing Mr Marcus said. And I
don't want to jump on this too hard, but I'm
gonna add a tiny little bit to this. Yeah. Um,
he's mentioning that Libra isn't necessarily an investment. He said, quote,
people will not buy it to hold like they would
a stock or a bond or another cryptocurrency. Will be
(55:03):
doing that, sorry, that will be doing so. If this
is important because if it isn't an investment, uh, the
security an Exchange Commissioner SEC would be less likely to
regulate it currently. As we recorded today, Facebook told Washington
(55:24):
the Libra cryptocurrency would be regulated by Switzerland's financial overseers,
and then it added that the digital money there would
never compete with national currencies, never undermined central banks, and
now we have to open it to you folks. What
do you think should a privately owned consortium like this
possess what could be the same powers as a government.
(55:47):
Are the critics being alarmist? Or are this are these
scary times? Are we? I mean, it hasn't happened yet.
That's true, it hasn't happened yet. But how strange will
it be for us to come back and record an
episode next year? And uh and and you know have
(56:07):
just walked in paying for lunch with Liebro. Yeah, I
know it's impossible. I'd love to talk to Switzerland and
their watchdog about whatever happened with HSBC, Like, what what
went wrong there? I thought you guys were the watch dogs,
remember that whole trug smuggling thing cartels? No, no, okay,
y'all are good. Cool, It's all good, guys. It really
(56:29):
does make notoriously non confrontational. Oh it's true. Yeah, you
know what part of it. Peter Falk is also in vibes.
I just want to add that Peter Falk that help.
I love some Peter Falk vibes, dude. So I'm really
really happy, honestly, Like, I can't tell you how happy
I am with all of this occurring right now over
(56:51):
the next few years. Like how excited I am that
I took the day and got my e coin wallet
in order, because I mean, gosh, it could have been chaos,
like so quickly. You're on the up and up, my friends.
So so tell us, tell us is this is this good?
Is this bad? Uh? Is this little column a little column? B?
(57:12):
If so? Why you can tell us this on the
phone directly. We have a phone number. You can call us.
We are one eight three three st d W y
t K. Leave a message and uh, you know, talk
to us about how corporations are becoming much much more
powerful than governments. To us your best Peter falk And
(57:34):
or Jeff Goldblum impersonation. How mash them up into one
cool hybrid impersonation. I'd love to hear that. See if
you get any vibes from hearing Ben when he does
the outgoing message. You can also find us on Facebook
and Twitter and Instagram. We're all over those places. Uh
we we'd like to recommend before before the Libra's Institute
(57:56):
did that you check out one of our favorite places
on the internet. Here is where it gets crazy, you guys.
I just thought of something. When liber comes through, we
can leverage our here's where it gets crazy page and
our stuff. They don't want you to know official show page,
to institute a version of Libra that we will call
ben Bucks. You know, it's its own thing, and we
(58:18):
we could call it. We should. We should call it
something more reflective of the show. Maybe, Okay, um, I
just I. I respect you guys immensely, but ben Bucks
is sort of my I don't want to split the pie.
Was Okay, we'll call it the Conspiracy Sure, that's perfect.
(58:39):
You can also find us in our individual lives and
doing various misadventures. You can catch me on Instagram. I'm
at ben Bulling. You can catch me as well. I
am at how Now Noel Brown, and I'm working very
hard to start a new account called Conspiracy Vibes. Really yeah,
I'm really hoping it hasn't been taken. Oh man, that's wonderful.
(59:00):
You cannot find me on Instagram. Actually, if you dig
hard enough you probably can. But it's a private account,
so I don't know. I'll have to look at your
picture and make sure you look trustworthy and have a
dog or a cat or something. Walk a walk, a walk.
I'm just kidding, all right. If you don't want to
do any of that stuff, you can still write to us,
give us suggestions for the show, anything you want to
(59:21):
talk to us about in the good old fashioned way.
We are conspiracy at iHeart radio dot com. Stuff they
(59:46):
Don't want you to Know is a production of iHeart
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