Facebook’s Cryptocurrency Sparks Privacy Concerns with International Watchdogs

Mark Zuckerberg’s organization is heading towards another round of privacy drama. 

Facebook is an online giant with a market cap of over $550 billion. 

Their ability to stay ‘on trend’ and absorb competition makes their recent segue into cryptocurrency less than surprising. Calibra is a newly formed subsidiary that is poised to act as an online wallet for the Libra currency. 

The project is projected to launch in 2020 and has support from some high-hitting backers, including PayPal, MasterCard, Uber, and Spotify. Considering the powerhouse behind the development, there were high hopes for the release. However, several international privacy commissioners have already aired concerns about the Facebook-led plan.  

Facebook’s History of Privacy Breaches

Facebook’s history of privacy has always been shaky. However, over the last year or so, the outrage has come to a head. The Cambridge Analytica scandal unveiled that Facebook was allowing third-parties to access user data and use it for their own purposes. Unfortunately, this information was hijacked and used to target and influence voters in the 2018 U.S. election. 

This scandal placed greater focus on Facebook privacy in general. Many users were shocked to discover the extent of personal information that the platform stores indefinitely. Mark Zuckerberg was called in front of the Senate Judiciary and Commerce committee in 2018 to answer questions about the privacy concerns. 

Zuckerberg set out a strategy for further regulation in the future, including the proposed introduction of a Facebook ‘Supreme Court.’ 

Privacy Commissioner Statements 

Less than a year later, Facebook is once again under the privacy spotlight. As their cryptocurrency is set to launch in 2020, several privacy commissioners have already raised concerns. Government employees from Australia, Britain, Canada, the E.U., and the U.S. issued an open letter highlighting the prospective issues.

“As representatives of the global community of data protection and privacy enforcement authorities, collectively responsible for promoting the privacy of many millions of people around the world, we are joining together to express our shared concerns about the privacy risks posed by the Libra digital currency and infrastructure.”

Their main fear surrounded how Facebook had failed to address protocols for handling data within the blockchain. They expressed the worries did not solely cover financial information, but all personal data associated with the project. 

The Problem with Calibra

Libra, like many cryptocurrencies, has been touted as an open network. However, the Calibra wallet is already drawing this into question. Facebook will incorporate its new subsidiary with its existing messaging apps – Facebook Messenger and WhatsApp – to increase convenience for users. This automated app synergy suggests that Facebook will retain a significant hold on the currency and, therefore, create a monopoly on something labeled as open source. 

Privacy concerns arise when one single body is solely responsible for a valuable cache of data. The Facebook monopoly on Calibra means they’ll have direct control over the currency. Due to their past offenses when it comes to security, it’s unsurprising that commissioners are worried. 

The main concern revolves around the fact that no privacy protocol is documented. While it’s possible that Facebook can provide proficient strategies, more evidence needs to exist to confirm this as the case. 

Privacy, Security & Cryptocurrency

As cryptocurrency increases in popularity, questions of privacy and security are immediately raised. Is it safe to move and store large amounts of currency online?

This query is interesting because of the nature of crypto-technology. Blockchain is known for its safety as it spreads its data across numerous network points, making it harder for a hacker to intercept.  

However, does this mean we should overlook cryptocurrency security completely? Of course not. 

Front-end Insecurities

The biggest threat to blockchain has less to do with the technology itself, and more to do with cryptocurrency management. Trades, wallets, mining, etc. are all achieved using third-party software or websites. Malware, phishing, DDoS, and other standard online dangers threaten these management systems, and it’s the responsibility of the third-party developers to guarantee their safety.

Abuse of the System

The other security issues come mainly from the misuse of the blockchain itself. Actions such as selfish mining, where blocks are hidden, 51% attacks, consensus delay, and theft of wallets are possible. While this poses less danger to user privacy, it does threaten the integrity of the system and the future of the currency.  

Monopoly VS. Transparency 

A more significant question has arisen recently about large corporations and their responsibility with data handling. The General Data Protection Regulation (GDPR) caused waves when it was introduced to Europe in 2018. Similar parliamentary acts also exist all around the world. 

They state that companies must be explicit about data use, including a comprehensive privacy policy. Users have a right to know have their data is processed, so they can make informed decisions on whether or not to trust the organization. 

While Facebook won’t own the cryptocurrency itself, it does have complete accountability for keeping its users safe. This kind of monopoly cannot exist morally without transparency.

Libra & Calibra Will Launch in 2020

While there’s no specific release date, Facebook’s cryptocurrency is expected to be launched within the next year or so. Its mission statement is to create a global currency that’s accessible for everybody.

Unfortunately, due to backlash, there will likely be delays. Some are even questioning whether it will get off the ground at all. One thing is for sure, government commissioners want proof of privacy before they sanction the use of Calibra. 

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Must Read