Speaker 1: Welcome to Tech Stuff, a production from iHeartRadio. Hey there,
Speaker 1: and welcome to tech Stuff. I'm your host, Jonathan Strickland.
Speaker 1: I'm an executive producer with iHeart Podcasts and how the
Speaker 1: tech are you? So? The day that this episode goes
Speaker 1: out here in the United States is Labor Day. That's
Speaker 1: a holiday, which means our office is closed. But I've
Speaker 1: brought you a couple of reruns recently and I didn't
Speaker 1: want to do that again, so I thought, why not
Speaker 1: talk about, you know, some tech projects that never quite coalesced.
Speaker 1: And I'm still going to do that, but you know,
Speaker 1: I've done it a couple times before. I've talked about vaporware.
Speaker 1: Vaporware refers to a project that at some point is
Speaker 1: announced but it fails to manifest. That doesn't mean that
Speaker 1: all projects that are called vaporware will always be vapor
Speaker 1: where sometimes they do emerge, not always for the better.
Speaker 1: For a very long time, I think sort of the
Speaker 1: poster child of vaporware for many years was a video game,
Speaker 1: and it was titled Duke Nukem Forever. This was considered
Speaker 1: vaporware for more than a decade. The company behind it,
Speaker 1: three D Realms, formerly known as Apagee Software announced Duke
Speaker 1: Nukem Forever way back in nineteen ninety seven. It would
Speaker 1: not emerge from development hell for more than a decade.
Speaker 1: It did finally come out in twenty eleven to much
Speaker 1: critical disdain. But for this episode, I'm actually going to
Speaker 1: talk about a single tech project that got the acts,
Speaker 1: it did not ever emerge from development, and to talk
Speaker 1: about why that is. And in future episodes I am
Speaker 1: going to talk about other tech projects that did not
Speaker 1: quite make it to market. There's one from Atari in
Speaker 1: particular I want to talk about because it was one
Speaker 1: of those projects that sounded really interesting, but the closer
Speaker 1: you looked at the more you realized, huh, this this
Speaker 1: doesn't seem to be quite the same thing that was
Speaker 1: marketed to me. But we'll save that for another episode instead.
Speaker 1: In this one, I want to talk about a cryptocurrency
Speaker 1: that ultimately was called dm but formerly was called Libra.
Speaker 1: Now to do this, let's quickly have a refresher on
Speaker 1: what cryptocurrency is. Specifically, we're talking about a digital currency
Speaker 1: and it relies on encryption methodologies in order to track
Speaker 1: and process transactions and payments. So this system has to
Speaker 1: one be able to ensure that the currency is linked
Speaker 1: to specific accounts belonging to specific people or entities. Otherwise,
Speaker 1: if you can't establish that, then you can't be sure
Speaker 1: that any transaction is legitimate. So it has to be
Speaker 1: able to verify that any given account actually possesses the
Speaker 1: funds needed for a transaction. That's first and foremost. Secondly,
Speaker 1: the system has to be able to verify that a
Speaker 1: transaction actually takes place. That is, it has to be
Speaker 1: able to register that funds have changed hands from one
Speaker 1: account to another. It has to be able to ensure
Speaker 1: that no copies of that currency used in the transaction
Speaker 1: have been created. Otherwise you could spend the same digital
Speaker 1: dollar or whatever multiple times, the whole system would collapse
Speaker 1: in short order. Of Essentially, there'd be no protection against
Speaker 1: digital counterfeiting, and obviously that's a huge concern, right, Like
Speaker 1: digital files are different from physical goods. We've talked about
Speaker 1: this numerous times, particularly in the world of piracy. Like
Speaker 1: it's one thing if you were to go to like
Speaker 1: a big box store and shoplift a DVD, like you've
Speaker 1: clearly stolen a copy of that thing, and it's a
Speaker 1: copy that the store could have sold and now they're
Speaker 1: at a loss. They have one fewer unit in their
Speaker 1: inventory because you stole it. It's different if it's a file.
Speaker 1: If you make a copy of a file, well, the
Speaker 1: original file still exists, it hasn't been deleted, it doesn't disappear,
Speaker 1: and maybe you wouldn't have purchased this digital file otherwise,
Speaker 1: So there's no loss in sales because all you did
Speaker 1: was make a copy. So like there are fundamental differences
Speaker 1: between digital goods and physical goods, well, the same thing
Speaker 1: is true of digital currency and physical currency. Right, Like
Speaker 1: you can't easily duplicate a dollar bill, you could try
Speaker 1: to counterfeit one, but it's hard to do. It's hard
Speaker 1: to do well, at least, I guess technically it's easy
Speaker 1: to do if you're doing a really crappy job. But
Speaker 1: you're you're probably gonna get found out if you do that,
Speaker 1: So you got to figure out ways to make that
Speaker 1: difficult or preferably impossible to do on the digital scale,
Speaker 1: or else the whole system doesn't work. So digital currencies
Speaker 1: are tricky. The blockchain has been and sort of the
Speaker 1: foundation for many digital currencies ever since it was introduced
Speaker 1: in a white paper for Bitcoin way back in the day.
Speaker 1: And I'm not going to go into full detail about
Speaker 1: what the blockchain is, but just know that the blockchain,
Speaker 1: the design of the blockchain was meant to solve some
Speaker 1: of these issues, to be able to serve as a
Speaker 1: record of transactions and a means of verifying transactions, and
Speaker 1: to make sure that nobody is trying to, you know,
Speaker 1: get a little creative and be able to exploit the
Speaker 1: system by hacking it or whatever. Now, some digital currencies
Speaker 1: are inherently volatile, which means their value can change wildly
Speaker 1: in a relatively short amount of time. It's great to
Speaker 1: talk about that because when I started working on this episode,
Speaker 1: bitcoin's value was at sixty thousand dollars about six three
Speaker 1: hundred and seventy bucks right around that area. Days before
Speaker 1: I started working on the episode, it was trading at
Speaker 1: more than sixty four thousand dollars per bitcoin. So a
Speaker 1: single bitcoin's value changed by around four grand in just
Speaker 1: five days, which is wild. Today, as I record this,
Speaker 1: the value is below sixty thousand dollars, so it's changed
Speaker 1: even more now. A little less than a year ago,
Speaker 1: bitcoin was valued at around twenty five thousand dollars per bitcoin,
Speaker 1: so the value has doubled in less than a year,
Speaker 1: but then in the course of a week it is
Speaker 1: dropped by five thousand dollars. That's crazy volatility, and it
Speaker 1: makes it really hard to use the currency as an
Speaker 1: actual currency because the value of the currency changes so
Speaker 1: dramatically and so quickly, even though you're talking about fractions
Speaker 1: of a bitcoin per transaction, unless you're moving massive amounts
Speaker 1: of wealth around, it could mean that what looks like
Speaker 1: a bargain one day could turn out to be a
Speaker 1: case where you're dramatically over paid for something just a
Speaker 1: couple of days later. Right if it turns out the
Speaker 1: nickel you used to buy a candy bar the following
Speaker 1: day could have bought you a Chevy that you're gonna think, Wow,
Speaker 1: that was the most expensive candy bar I've ever bought.
Speaker 1: And it's not really that I guess that the value
Speaker 1: has changed over the course of those days, but it
Speaker 1: does mean that if you had held onto that nickel,
Speaker 1: you could have bought a lot of candy bars just
Speaker 1: a couple of days later. This is one of the
Speaker 1: big reasons why I'm not a fan of bitcoin. Just one.
Speaker 1: There are periods where bitcoin's value is a little more stable,
Speaker 1: but it's always somewhat volatile. However, there is an alternative
Speaker 1: to this kind of cryptocurrency. Bitcoin isn't tied to any
Speaker 1: other assets. It is its own thing, But there are
Speaker 1: subsets of cryptocurrencies called stable coins. Now, these currencies link
Speaker 1: their value to stable assets such as the US dollar.
Speaker 1: The value of the currency fluctuates with the value of
Speaker 1: those assets, but otherwise it's far less volatile than other types.
Speaker 1: So you know, the US dollar, obviously we have inflation.
Speaker 1: That's been an issue for the last few years, and
Speaker 1: that would affect stable coins that were tied to the
Speaker 1: US dollar. But even that volatility is nothing compared to
Speaker 1: what you see in a cryptocurrency like bitcoin. So your
Speaker 1: typical cryptocurrency also has a system that to some extent
Speaker 1: democratizes things. Traditional currencies come from established financial institutions, typically
Speaker 1: ones that have to obey strict regulations. Cryptocurrencies eschew this
Speaker 1: centralized financial system to some degree or another. With bitcoin,
Speaker 1: all the computers that connect to the Bitcoin ecosystem are
Speaker 1: technically they're part of this, so it's democratized across all
Speaker 1: of them. There's no centralized bank or anything like that. Now,
Speaker 1: Libra would be a little bit different. Its network would
Speaker 1: be limited to approved partners, So it's not just any
Speaker 1: Yahoo who could join and become part of the Libra association,
Speaker 1: but anyone could presumably at least participate in the ecosystem
Speaker 1: through the buying and use of digital currency, you know,
Speaker 1: converting other currencies or what I sometimes refer to. This
Speaker 1: is not accurate, but it is sometimes how I find
Speaker 1: myself accidentally referring to them as real currencies and then
Speaker 1: digital currencies. That's reductive. It shows a real bias in
Speaker 1: my perspective, but it is something I fall into accidentally,
Speaker 1: so it could happen in this episode. Just a heads up.
Speaker 1: So let's talk about Libra. So, Facebook, which had not
Speaker 1: yet rebranded itself as Meta the company itself was called
Speaker 1: Facebook at this time, announced Libra in the summer of
Speaker 1: twenty nineteen. They published a white paper about it, and
Speaker 1: that document opens by saying, quote Libra's mission is to
Speaker 1: enable a simple global currency and financial infrastructure that empowers
Speaker 1: billions of people. End quote. By the way, if you
Speaker 1: want to read this white paper, I actually recommend using
Speaker 1: archive dot org because I mean, just from the topic
Speaker 1: of the episode, you already know Libra doesn't exist anymore.
Speaker 1: Even DM, the rebranded version of Libra, doesn't exist anymore.
Speaker 1: So the assets online that were records of this are
Speaker 1: largely gone because it's it's kind of it's a dead project.
Speaker 1: It's moot. But if you use archive dot org you
Speaker 1: can go back and read those papers. I recommend you
Speaker 1: do it if you want to learn more about what
Speaker 1: it was trying to be. So the concept was Libra
Speaker 1: wouldn't just be a cryptocurrency ecosystem, but also one that
Speaker 1: would support smart contracts. Smart contracts can be pretty much anything, really.
Speaker 1: It's meant to be like a thing built on top
Speaker 1: of blockchain that allows for different types of transactions. Those
Speaker 1: could be things like the deed to real estate. It
Speaker 1: could be a smart contract for a purely digital asset.
Speaker 1: It could be all sorts of stuff. But it would
Speaker 1: also enable people who might otherwise have little to know
Speaker 1: options to bank their money as a way to store
Speaker 1: and move money around, because not everyone in the world
Speaker 1: has access to a bank, but a lot of people
Speaker 1: do have access to a smartphone. And I genuinely believe
Speaker 1: that most of the people who are actually working on
Speaker 1: the nuts and bolts of Libra were doing so with
Speaker 1: this ideal in mind, that this could be a system
Speaker 1: that could empower people, particularly people in developing countries, and
Speaker 1: to remove barriers that otherwise make it really difficult to
Speaker 1: deal with money across borders. Transferring money is often hard
Speaker 1: or impossible, or at the very least very expensive, particularly
Speaker 1: when you want to move money from one country to another.
Speaker 1: So Libra could potentially open up opportunities for billions of
Speaker 1: people to be able to do this in a way
Speaker 1: that wouldn't represent a huge hardship. That I think is
Speaker 1: a fairly noble ideal. The problem is bringing that ideal
Speaker 1: in to reality, because that was going to take a
Speaker 1: lot of work and a lot of luck, and Libra
Speaker 1: would find problems with both of those things. I'll explain more,
Speaker 1: but first let's take a quick break to thank our sponsors.
Speaker 1: Before the break, I was talking about how Libra was
Speaker 1: going to encounter some hurdles in its path toward empowering
Speaker 1: billions of people and also in the process generating a
Speaker 1: a heck ton amount of revenue for the various partners
Speaker 1: in the Libra Association, particularly Facebook. Well. For one thing,
Speaker 1: one of the challenges that they faced right away was
Speaker 1: a matter of trust, so there was no single company
Speaker 1: serving as the governing body that was controlling the Libra network.
Speaker 1: But the fact that Facebook was spearheading this effort gave
Speaker 1: a lot of people pause because this is the same
Speaker 1: company that has built a multi billion dollar business that
Speaker 1: centers around the collection and commoditization of user data. Most
Speaker 1: of the time, when Facebook is in the news, it's
Speaker 1: not positive for the company. It's usually some story about
Speaker 1: how the company is aggressively finding new ways to generate
Speaker 1: enormous amounts of revenue by trading and user information in
Speaker 1: some way, or trying to find new ways to attract
Speaker 1: more users in order to sell their information, or how
Speaker 1: they are a bad steward of information, or how they
Speaker 1: are aware of the potential negative impact their product has. Really,
Speaker 1: I shouldn't say their product that their various platforms have
Speaker 1: on their product, because we're not really the users. We're
Speaker 1: the product here because it's our information that's being bought
Speaker 1: and sold. So Facebook's customers aren't its users. Facebook's customers
Speaker 1: are advertisers. We're the product, right Anyway, that's not something
Speaker 1: that is great pr if you're also trying to push
Speaker 1: out a digital currency, So there were real worries that
Speaker 1: a digital currency introduced by Facebook would primarily be meant
Speaker 1: as a way of generating yet more wealth for the corporation.
Speaker 1: Anything else would just be of secondary importance. Could it
Speaker 1: empower billions of people? Maybe, but that wasn't really what
Speaker 1: it was about. That was the perception. Now that might
Speaker 1: be an unfair assumption, but I would argue it's also
Speaker 1: an understandable one based upon Facebook's long history. Now, for
Speaker 1: the record, Facebook from the beginning, at least based on
Speaker 1: the white paper, envisioned a consortium of organizations that would
Speaker 1: serve as the governing entity over the blockchain and currency,
Speaker 1: and this was initially called the Libra Association, which in
Speaker 1: itself was designated as a not for profit organization that
Speaker 1: would be headquartered in Geneva, Switzerland. There were twenty eight
Speaker 1: founding members listed and it included companies like MasterCard, Visa, PayPal, eBay,
Speaker 1: Stripe and more. Though later on some of these organizations
Speaker 1: would say that they had never signed any kind of
Speaker 1: official agreement and so calling them a founding organization would
Speaker 1: be misleading. It was more like they were interested, but
Speaker 1: they never committed to it. In fact, between June twenty
Speaker 1: nineteen and the first meeting of this association in October
Speaker 1: of that same year, seven of the twenty eight companies
Speaker 1: withdrew their names from the proverbial hat. So PayPal was
Speaker 1: the first to hit that eject button on October fourth,
Speaker 1: and on the eleventh, several companies, including Visa, Stripe, and
Speaker 1: MasterCard all bailed in a matter of just a couple
Speaker 1: of hours. So, according to the Verge, by the time
Speaker 1: the meeting happened on October fourteenth, every major US payment
Speaker 1: processor that had been announced as part of this association
Speaker 1: had abandoned it. So they were all out before the
Speaker 1: first meeting happened. That's a big problem, right. The payment
Speaker 1: processing companies certainly would lend legitimacy to, if not actual
Speaker 1: process and structure to the Libra Association, but they all left.
Speaker 1: Why though, Well, perhaps a big part of that was
Speaker 1: the first meeting would include deciding what roles and responsibilities
Speaker 1: each member of the association would actually be responsible for,
Speaker 1: and some of these companies had leaders who were likely
Speaker 1: saying something like, Yeah, I'd rather bounce now rather than
Speaker 1: face obligations that I'm not ready or able to meet.
Speaker 1: But perhaps more importantly, governments in general, and regulators in
Speaker 1: particular around the world, including the United States, were starting
Speaker 1: to scrutinize digital currencies in general, cryptocurrencies in particular, and
Speaker 1: there were serious concerns that, you know, these currencies could
Speaker 1: be used by say, criminals and terrorists to launder money
Speaker 1: and to move it around the world in ways that
Speaker 1: would be difficult or impossible to detect and track and
Speaker 1: police and big established companies aren't typically not very keen
Speaker 1: on being associated with systems that potentially could facilitate the
Speaker 1: funding of say, a terrorist action or whatnot that is
Speaker 1: very bad pr so this project represented far too great
Speaker 1: a risk. Besides, Facebook already had a really bad reputation
Speaker 1: with regulators as far as protecting user information went, so
Speaker 1: having a project that emerged from a company with such
Speaker 1: a bad reputation was kind of a huge detriment from
Speaker 1: the start. That just got worse as government officials became
Speaker 1: very interested in Facebook's operations following a whistleblower coming forward
Speaker 1: with internal documents showing some extremely unflattering stuff about the company.
Speaker 1: So Facebook, as partly a result of this, or I
Speaker 1: would argue as a result of this, underwent a name
Speaker 1: change to Meta and backed away from Libra as well.
Speaker 1: I think the name change to Meta was largely to
Speaker 1: distance itself from those accusations that were made by the whistleblower,
Speaker 1: and that this was an attempt to kind of like
Speaker 1: wipe the slate clean of kind of a desperate attempt. Now.
Speaker 1: I think Meta would say the rebrand was because the
Speaker 1: company was so much more than just Facebook, and there
Speaker 1: was this new focus on creating the metaverse, something that
Speaker 1: continues to be kind of a well, joke is too
Speaker 1: strong a word. It certainly mocked the concept of the
Speaker 1: metaverse and Meta's continued dedication to trying to bring that about.
Speaker 1: I think a lot of people are kind of just
Speaker 1: not sold on the metaverse idea at all. Anyway. As
Speaker 1: part of this effort, Facebook, I guess, sensing that this
Speaker 1: was kind of a non starter, backed away from Libra,
Speaker 1: and that's when Libra had its own rebranding and became DM,
Speaker 1: partly in an effort to provide a little more distance
Speaker 1: between the association and Facebook slash Meta Plus. At this point,
Speaker 1: like most of the founding companies were no longer part
Speaker 1: of this association and the plans had changed quite a bit,
Speaker 1: So instead of offering a single stable coin currency tied
Speaker 1: to lots of different assets. The plan shifted to offering
Speaker 1: different digital currencies, each one anchored to a different real
Speaker 1: world asset. However, regulators were still concerned about how this
Speaker 1: could potentially disrupt the financial infrastructure of various countries, including
Speaker 1: the United States, and it became clear that any path
Speaker 1: forward was going to be extremely challenging and time consuming.
Speaker 1: And it just turned out the Association wasn't willing to
Speaker 1: stick it out, that there was too much uncertainty about
Speaker 1: what would or would not be allowed, that the vision
Speaker 1: was just going to be compromised multiple times in an
Speaker 1: effort to be able to meet whatever regulations would emerge.
Speaker 1: And so in early twenty twenty two, the DM Association
Speaker 1: announced it was actually selling off all assets to Silvergate
Speaker 1: Capital Corporation for the princely sum of one hundred and
Speaker 1: eighty two million dollars. So you might think, oh, well,
Speaker 1: maybe Silvergate would make something of it, except that the
Speaker 1: following year Silvergate Capital liquidated. That was the bank that
Speaker 1: in March twenty twenty three went out a business and
Speaker 1: liq Quid dated largely because of the spectacular collapse of FTX,
Speaker 1: So that was the sad but short Tale of Libra.
Speaker 1: I hope all of you had an amazing weekend. For
Speaker 1: those of you in the United States, I hope you're
Speaker 1: having a great Labor Day and I will talk to
Speaker 1: you again really soon. Tech Stuff is an iHeartRadio production.
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