Nir Vulkan lifts the lid on the cryptocurrencies’ favourite technology
The news that Facebook is planning to release a new cryptocurrency, Libra, via a non-profit consortium, has sent politicians and regulators into a spin. The G7 countries are setting up a working group to examine the risks; the French finance minister has warned against Libra’s becoming a ‘sovereign currency’; and Maxine Waters, chair of the House Financial Services Committee in the US, has asked Facebook to pause its development, ‘given the company’s troubled past.’ Only the Bank of England’s Mark Carney seems to have responded with anything less than a furious backlash, and his backing can only be described as ‘cautious.’
For Oxford Saïd’s Nir Vulkan, Associate Professor of Business Economics, the announcement manages to be both one of the best and one of the worst developments for blockchain, the technology that underpins cryptocurrencies.
‘It shows that blockchain has moved into the mainstream,’ he says. ‘People need to know about it and understand it. It can have many benefits for a range of businesses and it’s positive that more people are waking up to it. But the association with Facebook has tapped into a widespread fear of complicated and opaque technology. People are already suspicious of what Facebook might be doing with our data: do we want to give them oversight of our spending too?’