BEN MEZRICH: Why we should fear the dawn of Facebank
Why we should fear the dawn of F
Why we should fear the dawn of Facebank: After taking your personal data, now Facebook wants to control your money by issuing its own currency called Libra, writes the author behind The Social Network
Yeah, so if you ever need info about anyone at Harvard just ask. I have over 4,000 emails, pictures, addresses, SMS [text messages]. People just submitted it. I don’t know why. They “trust me”. Dumb f***s.’
So wrote Facebook founder Mark Zuckerberg to a Harvard classmate in 2003, in messages that came to light years later.
At that time, an early version of what became Facebook was merely a university social website, nothing like the unruly megalith it is today.
In Zuckerberg’s vision, users will buy Libras with their home currency and then spend them on goods and services in his online world. It should also be easy — and cost next to nothing — to send Libras to other people via Facebook-owned apps such as Facebook Messenger and WhatsApp
But even then the future boy-king of the tech world was talking about you and me — all 2.4 billion of us who willingly offer our lives, personal information and data into his company’s hands every day.
That anecdote could be dismissed as the idle boast of a pampered undergraduate. Yet, I believe it provides a telling insight into the way Zuckerberg’s mind works and the chilling extent of his ambition.
And this week, that ambition took a stark new turn as Zuckerberg unveiled his latest innovation: a digital currency called Libra.
Let me take things back to basics. What is money? Money can be described as a system of confidence. A paper banknote is worthless in itself: but you and I can both believe it has value because it is backed by the state.
Over time, a system such as this will likely grow ever-larger and more pervasive. There may well come a time when life will be practically impossible without a Libra account
Some people have similar faith that global corporations such as Facebook, Google and Apple have the reach and resilience to successfully back a currency. Certainly, some large companies are more financially stable than certain countries.
But we know what happens to any financial system when confidence drops out of it: runs on banks, economic collapse, chaos . . .
In Zuckerberg’s vision, users will buy Libras with their home currency and then spend them on goods and services in his online world.
It should also be easy — and cost next to nothing — to send Libras to other people via Facebook-owned apps such as Facebook Messenger and WhatsApp.
Sounds useful? Well, perhaps: until you understand the potential for this technology to increase Zuckerberg’s immense power to previously unimagined levels.
Over time, a system such as this will likely grow ever-larger and more pervasive. There may well come a time when life will be practically impossible without a Libra account. At that point, a corporation will have assumed the role and authority of a currency-producing superstate.
I believe concerns that Libra could bring down the global banking system are overstated: that system has evolved over centuries, and even Wall Street and the City of London have accepted that crypto-currencies will be a big part of banking’s future [File photo]
Pictures, profiles, status updates, news stories — their importance pales in comparison with what’s inside the world’s bank accounts.
That’s why critics are already calling Libra ‘the most invasive and dangerous form of surveillance ever designed’.
I believe that the motivation behind Libra is deeply insidious and goes right to the core of what Facebook is all about.
Libra dovetails beautifully with Zuckerberg’s intention to dominate not just our social lives but everything else, too. For Zuckerberg may well hope that Libra will one day jockey for position — and eventually overtake — today’s premier global currencies as accepted means of exchange.
For its part, Facebook says that Libra has the potential to help billions of people around the world who own a mobile phone but have no bank account — there are countless such people in India, China and Indonesia, for example.
(How exactly people without bank accounts will buy Libras is unclear, but one suggestion is that they will pay cash for widely available cards to ‘top up’ their Libra accounts, similar to those that top up mobile phones.) Even among developed countries, moving money, especially across borders, is often difficult, expensive and slow.
Some people have similar faith that global corporations such as Facebook, Google and Apple have the reach and resilience to successfully back a currency. Certainly, some large companies are more financially stable than certain countries [File photo]
All digital or ‘crypto’ currencies have been developed specifically for our online world: I believe that they are, in one form or another, the future.
The best-known crypto-currency, of course, is Bitcoin, which has seen such meteoric price fluctuations that it has drawn comparisons with the famous Dutch ‘Tulip mania’ of the 1600s. Bitcoin has no central bank or regulator: it is managed by computers.
Libra, in contrast, will be organised and overseen by 27 ‘founding members’, including eBay, the taxi companies Uber and Lyft, music giant Spotify, Visa — and, of course, Facebook itself at the helm. What could possibly go wrong?
I have studied Facebook for years. The thesis of my 2009 book The Accidental Billionaires, which was made into the hit film The Social Network, was that Zuckerberg initially created the website for that most prosaic of reasons: to help him and his friends meet girls.
Zuckerberg disagrees, but based on my interviews with people around him at the time, it all started after he went on a bad date, had a few beers and hacked into Harvard’s computer systems, collecting pictures of all the women on campus and creating a website on which users could vote on who was most attractive.
After narrowly avoiding expulsion for this tasteless stunt, Zuckerberg was profiled by Harvard’s student newspaper and caught the attention of identical twins Cameron and Tyler Winklevoss.
These strapping sometime Olympic rowers were the coolest kids on campus — far more so than geeky Mark from suburban New York. Tyler and Cameron were working on their own social website: The Harvard Connection, later renamed Connect U, and hired Zuckerberg to work for them.
Their subsequent fallout has, of course, been well-documented. In a vicious lawsuit (eventually settled for $65 million), the Winklevoss twins alleged that Zuckerberg stole some of their ideas to use for Facebook.
Their case was not exactly hindered when another obscene boast emerged from Zuckerberg’s private messages, in which he had written ‘I’m going to f*** them’, referring to the twins.
Pictures, profiles, status updates, news stories — their importance pales in comparison with what’s inside the world’s bank accounts. That’s why critics are already calling Libra ‘the most invasive and dangerous form of surveillance ever designed’ [File photo]
Fast forward to today. Facebook is one of the biggest companies on earth and Zuckerberg is one of the richest men alive, with a fortune of around $69 billion (£54 billion).
I would argue that Libra epitomises a personal motivation going all the way back to his college days. For the Winklevoss twins have re-emerged in the chaotic world of cryptocurrencies. Two years ago, they were named as the first ‘Bitcoin billionaires’, said to own one per cent of all the Bitcoins in circulation.
Undeterred by the plummeting price of Bitcoin last year (it has since rallied somewhat), they continued to run their ‘crypto exchange’ Gemini, on which users can trade digital currency.
Is it a coincidence that Zuckerberg is launching his own cryptocurrency: Libra to the twins’ Gemini? Or could it be the latest manifestation of the men’s deeply personal psychodrama?
Whatever the truth, Zuckerberg is no longer seen as a revolutionary who would change the world for the better. He epitomises the out-of-touch technology Establishment — overseeing and managing much of the data humanity uploads onto the internet.
Yet he and his company are continually buffeted by scandal. Facebook has been repeatedly accused of mishandling our information, allowing its platform to be abused for political, racist and even violent ends. We know its systems can track us online, even when we are not logged into the site.
It is under criminal investigation in the U.S. for allegedly sharing user data with Amazon and Apple, as well as other companies.
Meanwhile, it has been accused of spreading hatred, not least hosting the live video of the New Zealand mosque massacre in March, in which 51 people died.
Some even allege it has influenced elections. Russia is said to have spent millions on fake Facebook accounts masquerading as real users who supported Donald Trump and opposed his running mate, Hillary Clinton in the 2016 U.S. election.
There seems little doubt that the enemies of the West will be closely examining Libra to see whether it might be used against us.
Zuckerberg himself was accused of cowardice earlier this year by Labour MP Tom Watson after refusing several times to attend select committee hearings in Parliament to discuss concerns.
The situation is now so bad that Facebook allegedly has a workforce of more than 30,000 people with the unenviable job of sifting through and removing sickening content — child pornography, appalling violence, suicide videos, racism and more.
Many have reportedly been diagnosed with post- traumatic stress disorder and one 42-year-old moderator in Florida died of a heart attack at his desk after suffering from ‘stress’.
Meanwhile, Facebook has become such a sprawling giant that many of its founders have spoken out.
Chris Hughes, who worked on the website with Zuckerberg at Harvard, has called for it to be broken up; while Sean Parker said it exploited ‘a vulnerability in human psychology’, adding: ‘God only knows what it’s doing to our children’s brains.’
Best-selling author Ben Mezrich is pictured above. His latest book, Bitcoin Billionaires, A True Story of Genius, Betrayal, and Redemption is out now
Instead of pausing to reflect on these scandals, Zuckerberg is doubling down. With Libra, Facebook will reach its squid-like tentacles even further — right into our wallets.
In 2017, Zuckerberg embarked on an artfully photographed ‘road trip’ of the U.S. which the New York Times said had ‘all the trappings of a political campaign’.
To me, it was like watching an artificial intelligence trying to understand the vassals it one day intended to lead.
Perhaps, at the time, Zuckerberg had humdrum political aspirations but, as he himself has mused: ‘In some ways, Facebook is more like a government than a traditional company.’
I believe concerns that Libra could bring down the global banking system are overstated: that system has evolved over centuries, and even Wall Street and the City of London have accepted that crypto-currencies will be a big part of banking’s future.
However, the big banks are scared — and it’s telling that none of them is part of the founding circle of Libra members.
Likewise, governments will be deeply worried. How can any single state possibly regulate or oversee a currency that has no borders, that can be used instantly, phone-to-phone, and in a company still controlled by one man?
Bitcoin emerged as a response to the economic crisis of 2008: a fork in the history of finance every bit as transformational as the introduction of the decimal system to the West in the 13th century.
Crypto-currency can be seen as a natural development in that history. The ‘blockchain’ — the technology on which it is based — is simply a new way to keep track of debts and credits in a public ledger, maintained by a network of computers.
The question is: would you rather governments oversaw and regulated those debts and credits, as with the dollar and euro? Or would you rather it be handled by a group of unelected, unaccountable and relatively inexperienced tech billionaires, motivated by self-interest and with a decidedly questionable track record in safeguarding our personal data?
Mark Carney, the Governor of the Bank of England, said this week that he would approach Libra ‘with an open mind but not an open door’. But he may find that such is the might of Facebook, he has limited ability to keep any door closed at all.
If Libra succeeds and becomes the de facto online currency, we’ll need to place our faith and financial security in Facebook’s hands.
And maybe that will work out for the best; maybe, as Facebook maintains, Libra will give access to the global economy to people who currently do not have bank accounts, to the billions who have been left out of the era of internet commerce.
Or maybe we will one day think ourselves ‘dumb’ for having ever trusted Mark Zuckerberg.
Best-selling author Ben Mezrich’s latest book, Bitcoin Billionaires, A True Story of Genius, Betrayal, and Redemption is out now. Click here to find out more.