Do you believe in Facebook's Libra coin?

What too many people don't quite get is that money isn't really real.

I mean, it's real in that currency exists. You can open your wallet and pull out some fiat currency if you haven't gone totally cashless. Worst case, you can see it in the tips jar at the coffee shop.

But what makes it so that you can pull out that $10 bill and buy a coffee? Why does the electric company accept a check, bank transfer or credit card payment and keep your air conditioning on?

Currencies, you see, are belief systems - so explained Paul Johnson, an adjunct professor at the Fordham Gabelli School of Business in Manhattan. He was one of the speakers at "Understanding the Libra Coin" at Fordham, hosted by Blockchain NYC.

Once President Nixon moved the U.S. dollar off the gold standard in the 1970s, the dollar became an article of faith. It's not backed by anything. The government says a dollar is worth a dollar, and we accept that - so it is, therefore, worth that dollar. Even when the copper in pennies was worth more than one cent, those coins still only represented that one cent of value. No store or vendor was going to accept a penny as being worth any more than a cent.

So, back to Facebook's Libra coin - in order for it to become an actual currency, Facebook will have to boot up an entire belief system, Johnson explained. That's not impossible, but it's also not as easy as convincing people to connect to their best friend from kindergarten.

Some in the audience at the event disagreed and pointed out how bitcoin has become a currency - something Johnson disputed. He had some compelling arguments for that: The volatility of Bitcoin makes it so that people want to hodl. If you believe bitcoin is going to be worth $20,000 in a few months, why would you spend any of it now to, say, buy a pizza?

Bitcoin ATMs are more a curiosity than an actual way people seek to withdraw money.

Can that change in the future? Of course. Will it as long as people believe Bitcoin will be worth more tomorrow, next week, next month than it is now? Probably not.

Facebook is in the enviable position of being able to create the killer payments app - with more than 2 billion users worldwide, the ease of being able to send money to a friend via Facebook is a no-brainer. If Facebook were to usurp Venmo, Zelle, PayPal - maybe even Apple Pay, Google Pay and Samsung Pay - then its creation of a cryptocurrency might make more sense, Johnson said.

So can Facebook build that belief system? Despite the fact that the overwhelming majority of those who attended the event indicated they do not trust Facebook, most seemed very intrigued by and hopeful about the Libra coin.

So maybe that answer is yes.

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