A Wake-Up Call Whether This Crypto Launches or Not

This plan could grow the crypto space up to 90 times... The second-best-known crypto in the world... Two reasons this crypto has already revolutionized the industry... 'This $20 bill doesn't discriminate'... A wake-up call whether this crypto launches or not...

Editor's note: Today, we're sharing an essay from cryptocurrency expert Fred Marion. Fred joined the Crypto Capital team last December after spending several years actively mining and investing in the crypto industry.

An early investor in Mastercoin – the world's first initial coin offering ("ICO") – and an angel investor in decentralized exchange BitShares, Fred believes the flood of money into cryptos is just getting started.

Prior to joining Stansberry Research, Fred worked as a reporter and tech columnist for the Palm Beach Post in Florida. He's also a self-trained web developer who has coded for start-ups and international tech companies.

These days, Fred travels to different cryptocurrency conferences around the world and draws on his technical background to help uncover investment opportunities for Crypto Capital subscribers. In today's essay, Fred explains how Facebook's libra cryptocurrency has already revolutionized the industry – whether it becomes a reality or not...

In early July, my colleague Alan Gula wrote an excellent Digest about libra, a brand-new cryptocurrency that Facebook is developing...

Today, I (Fred Marion) will explain how libra could cause the size of the entire crypto industry to grow by as much as 90 times... virtually overnight.

But as you'll see, even if Facebook's plan never comes to fruition, libra has already made a lasting impact on the crypto industry. And that's great news for investors in the space.

If I had to come up with a plan to grow the crypto industry up to 90 times, here's what I would do...

Find a global social media network with 2.7 billion monthly active users and give them a crypto that's resistant to inflation.

There's no single event that could possibly be bigger, at least short of a dollar collapse or a government adopting bitcoin. It would rewrite the rules of money.

That's exactly what Facebook wants to do with libra...

The company's proposed supercurrency would be 100% backed by fiat currencies and government bonds. Unlike fiat currencies, though, it would be run on a blockchain. (That's the public ledger technology that powers bitcoin.)

The company wants to roll libra out across all its social media platforms – Facebook, Messenger, WhatsApp, and Instagram. And its ambitions don't stop there...

Facebook has partnered with 27 other companies and nonprofit organizations to run the network through the Libra Association. You'll recognize many of the names... Mastercard (MA), Visa (V), PayPal (PYPL), Mercado Pago, Uber Technologies (UBER), Lyft (LYFT), Stripe, eBay (EBAY), Spotify Technology (SPOT), Vodafone (VOD), and more.

Many folks fixate on the fact that Facebook can promote libra to 2.7 billion monthly active users. But don't forget that the company's partners will do the same with libra, too...

Overall, libra's partner companies (excluding Facebook) serve at least 2.2 billion people.

Of course, we must acknowledge that significant overlap exists, too... If a customer uses eBay, he probably uses PayPal, too. And if he uses Spotify, he likely uses Facebook.

That doesn't change the main takeaway, though...

Libra's reach goes far beyond Facebook alone. With all its partners, libra could be advertising to as much as half the world's population in less than a year.

In fact, libra is already extremely popular...

A survey from retail brokerage eToro in July found 16% of American adults already knew about libra just a month after it was announced. That makes it the second-best-known crypto out of more than 4,000 in the world. (It trailed bitcoin, which came in at 58%.)

It's impossible to know exactly how many people own crypto, but the numbers are small...

Just 20.4 million bitcoin addresses (think of them like accounts) exist that are worth $1 or more. And only 7.7 million bitcoin addresses are worth $100 or more. Most estimates say there are anywhere from 30 million to 60 million active crypto holders in the world.

If libra launches, it could expose up to 90 times as many people to crypto almost overnight.

But here's the thing...

Regardless of whether libra ever launches or not, it has already revolutionized the industry.

That's true for two reasons.

First, it's forcing everyone – from world leaders to ordinary folks – to ask fundamental questions about money...

In July, members of both houses of the U.S. Congress grilled Facebook cryptocurrency chief David Marcus. And for the most part, the conversations weren't friendly... Lawmakers slammed Facebook on data leaks, censorship, and electoral interference.

It was political grandstanding at its finest. But some lawmakers got it, and the subtext of their questions was profound. The bitcoin community has been asking these questions for a decade...

Who should control the monetary supply? Why do the poor pay more in bank fees than the wealthy? Should bureaucrats be able to track every financial transaction we've ever made? Is inflation really required for growth? Or is it a way for governments around the world to quietly appropriate money from their citizens?

With the fiat monetary system showing cracks, these questions are only going to grow louder. And the answers will become even more important.

There's one major problem with libra, though...

Wisconsin Rep. Sean Duffy pointed it out at the congressional hearings when he held up a $20 bill.

"Everybody can use a $20 bill," Duffy said. "This $20 bill doesn't discriminate on anything. You can be a murderer, you can say horrible things, you can say great things. This $20 bill can be used by every single person that possesses it."

That's not true of libra. And that could be its undoing...

You see, libra is "centralized." Facebook and its 27 partners will run it like a crypto cartel. Only the "in" crowd can process transactions. And in theory, that means the association could block specific users. Even worse, it could potentially seize assets from people.

The Libra Association would wield tremendous power over its users. And if it reaches scale, the association would have tremendous power over governments, too...

That's because the association plans to back every libra with fiat currencies or bonds. If libra reaches scale, the association could one day control trillions of dollars.

With a honeypot that big, it could potentially sway lawmakers...

For example, the association could exclude (or promise to include) certain currencies as its backing. Or it might suddenly decide to buy German bunds instead of U.S. Treasurys. It could even blacklist a country from using libra altogether if it wanted to.

Lawmakers, economists, and bankers are nervous about that concentration of power. And in countries where inflation is a problem, libra could wipe out the local currencies altogether.

Governments will fight that tooth and nail.

That brings us to the second reason why libra is revolutionizing the crypto space...

It's highlighting bitcoin's benefits.

While governments might regulate libra into the ground, bitcoin will continue to thrive.

Unlike libra, bitcoin is "decentralized."

Sure, governments can stop companies from selling bitcoin to murderers. But they can't stop the murderers from using bitcoin altogether. Anyone can mine bitcoin (the process of creating new bitcoin). And once they have it, they can use it outside the banking system.

It's like that $20 bill. It's fungible. And that's a requirement for a good form of money.

(Of course, some third-party providers can refuse to serve clients with tainted bitcoin... but that's the same as cash. Banks can refuse to process cash transactions for criminals, but the criminals can take their money elsewhere.)

Decentralized networks are all-or-nothing. They don't discriminate... And that's why North Carolina Rep. Patrick McHenry called bitcoin an "unstoppable force."

Libra's future remains murky, but it should be a wake-up call for everyday investors...

Whether Facebook and its 27 partners ever launch libra or not, corporate money is coming.

Governments may be able to bully Facebook into backing down, but another corporation will pick up the pieces and try again. Maybe it will be Alphabet (GOOGL), Amazon (AMZN), Alibaba (BABA), Walmart (WMT), or someone else we're not even thinking about today.

Someone will learn from Facebook's approach, and come up with a new and improved one... one that satisfies federal regulators. And then, the world will see a wave of corporate money hit the market.

If libra does become a reality, its users will be able to easily buy it thanks to financial entities like PayPal, Visa, Mastercard, and Stripe. And that will cause a surge across the entire crypto space... Once you have one crypto, swapping it for bitcoin or another crypto isn't much harder than sending an e-mail.

Libra is just an idea today, but it has already upped the ante. It has taken the conversation from inside coffee shops and around water coolers to the great halls of power... U.S. Congress.

And the more you learn about crypto, the more you'll see the many benefits of bitcoin...

It's the backbone of the entire industry. It's decentralized. It's inflation-proof because no matter what, there will only ever be 21 million bitcoins. And it's one of the few cryptos that aren't in the crosshairs of the U.S. Securities and Exchange Commission right now.

Crypto isn't theoretical anymore. It's no longer a fringe experiment. It's knocking on the door of mass adoption. And bitcoin holders will be among the biggest beneficiaries.

I should mention one last thing...

While my colleague, Crypto Capital editor Eric Wade, and I believe bitcoin is the one cryptocurrency everyone should own, it's probably not the best opportunity in the space right now.

Instead, we believe your best shot at truly life-changing gains lies with one tiny crypto that most folks have never heard of. In fact, we believe you could easily make 10 times your money or more in a matter of weeks – or even days.

But if you're interested in learning more, please don't delay... We believe this tiny crypto could begin to soar as soon as this Thursday. Click here to learn more right now.

New 52-week highs (as of 9/9/19): Blackstone (BX), CBRE Group (CBRE), General Mills (GIS), Home Depot (HD), iShares U.S. Home Construction Fund (ITB), Nuveen Preferred Securities Income Fund (JPS), NVR (NVR), Sysco (SYY), and AT&T (T).

What do you think about cryptocurrencies – and libra, in particular? We'd love to hear your comments. As always, you can send them to us at feedback@stansberryresearch.com.

Good investing,

Fred Marion
Dayton, Ohio
September 10, 2019