A U.S. Congressman, Warren Davidson, has recently implied Facebook’s cryptocurrency Libra is a ‘shitcoin’ after revealing he knows what he’s talking about when it comes to the cryptocurrency space.
Facebook has recently had to answers a few tough questions about Libra before a U.S. Senate Committee and while there were various memorable moments in the event, a Congressman implying Libra is a shitcoin has to be one of the most notable.
The representative from Ohio, while questioning CoinShares’ chief strategy officer Meltem Demirors, started by separating bitcoin from shitcoins, noting that people in the space are familiar with both terms.
A ‘shitcoin’, as most cryptocurrency enthusiasts know, is usually a term used to define cryptocurrencies that have no specific use case and should have no value. While some Bitcoin maximalists call everything that isn’t BTC a shitcoin, most use the pejorative term on the worst altcoins out there.
Through his questions, Davidson emphasized bitcoin has no central authority that can dilute the flagship cryptocurrency’s value, nor is there an authority that can censor BTC transactions. As Demirors noted, only the products and services people use can do that, but transactions on the blockchain are permissionless.
“Shitcoin” is not profanity. It is a highly technical term in monetary economics.
I sincerely thank @WarrenDavidson for introducing such an important concept to the rest of the members of the US Congress. pic.twitter.com/0S7NVjn4AH
— Michael Goldstein (@bitstein) July 17, 2019
With Bitcoin, the Congressman added, users can engage in peer-to-peer transactions as if it were cash. Davidson added these features differentiate bitcoin from “many of the things people call colloquially shitcoin, because the value can be distorted by a central authority, so people do really have their assets at risk.”
The implication here is Libra, which will be governed by a central authority, the Libra Association, is a shitcoin because there’s a central authority able to artificially dilute its value and censor transactions. The social media giant’s cryptocurrency is set to be launched next year, and will reportedly be backed by a basket of various fiat currencies and U.S. treasury securities.