Facebook’s Libra announcement notwithstanding, a generational divide—attributed more to commercial interests than age—remains between Team Blockchain/Cryptocurrencies and Team Traditional Finance. Over and over at Fortune’s inaugural Brainstorm Finance conference in Montauk, N.Y., Wednesday the chasm was clear. One side believes nearly religiously in a future that is nifty but has demonstrated next to zero utility. The other side is happy to listen, thank you very much, but in the meantime intends to carry on with the business of lending, financing, facilitating payments and so on, all the better if digital tools can be cleverly applied to the task at hand.
Some examples, mostly from the don’t-fix-it-if-ain’t-broke crowd:
* Hikmet Ersek, CEO of Western Union, said of Facebook’s grand plans for a sort-of stable cryptocurrency: “It is only an announcement.” This was a common refrain. For all of Facebook’s bold vision, much is left to be determined. Even true believer Barry Silbert, CEO of Digital Currency Group, began his observations about Facebook by saying, “If it launches …”
*Walt Bettinger, CEO of Charles Schwab, isn’t anywhere near embracing cryptocurrencies. He says “affluent” millennials are using Schwab’s services but that the “economics of our business is driven by GenX and boomers.” Interestingly, he hasn’t closed the door on joining Facebook’s consortium, which counted zero banks in its debut. “Let’s answer that question out in the future a little bit.”
* Patrick Gauthier, vice-president of Amazon Pay, on why the innovative e-commerce Goliath didn’t do what Facebook has done first: “The fact that we can build something doesn’t mean that we should.” His business partner, Margaret Keane, who is CEO of credit card company Synchrony, on the need for cryptocurrencies: “I’m not 100% sure what problem we’re solving.”
* Hardly the only new-world-order booster in Montauk, Andreessen Horowitz’s Kathryn Haun, likened the upcoming meetings of the Facebook/Libra consortium to the original Constitutional convention: many voices with equal votes hammering out difficult issues. (Her venture capital firm is one of several founding members.)
My quick observations merely skim the surface of everything we discussed Wednesday. Please see the rest of the coverage here.
And please take a moment to read the cover story for the July issue of Fortune, a highly readable account by Aric Jenkins about what has gone wrong—and what may yet go right—with virtual reality.
Let’s talk Libra. The U.S. Senate Banking Committee is planning a hearing on Facebook’s new Libra cryptocurrency on July 16 at which the social network’s blockchain chief David Marcus is expected to testify, according to Reuters. Among the topics of discussion: digital privacy.
Wall Street chatter. Workplace chat app company Slack will begin trading on the New York Stock Exchange on Thursday, the Wall Street Journal reported. The startup, with a $15.7 billion valuation, joins Spotify as the second major company to forgo an IPO in favor of a so-called direct listing.
YouTube under fire. YouTube is feeling the heat from a Federal Trade Commission investigation over the video service’s alleged violations over children’s privacy, The Washington Post reported. The investigation was spurred by complaints from privacy advocates and consumer advocacy groups who were upset that YouTube possibly violated the Children’s Online Privacy Protection Act “that forbids the tracking and targeting of users younger than age 13.”
Light bright. Amazon unveiled a new version of its Kindle Oasis e-book reader that has a new adjustable lighting feature for day-or-night reading, reports CNET. An 8 GB version of the device will cost $250 while a 32 GB version will cost $280.
Oracle beats expectations. Database giant Oracle’s overall sales were up 1% year-over-year to $11.14 billion in its fiscal 2019 fourth quarter, which beat analyst expectations of $10.93 billion, CNBC reported. Oracle’s shares jumped nearly 7% as a result of the earnings beat.
FOOD FOR THOUGHT
It keeps getting worse. The Verge published a harrowing account of the abysmal working conditions at a Facebook content-moderation site in Tampa, Fl. The report details how the content moderators, who worked for the IT outsourcing company Cognizant, dealt with a litany of problems like bed bugs, sexual harassment, and physical fights. One worker died on the job from a heart attack:
Paramedics raced Utley to a hospital. At Cognizant, some employees were distraught — one person told me he passed by one of the site’s designated “tranquility rooms” and found one of his co-workers, a part-time preacher, praying loudly in tongues. Others ignored the commotion entirely, and continued to moderate Facebook posts as the paramedics worked.
Utley was pronounced dead a short while later at the hospital, the victim of a heart attack. Further information about his health history, or the circumstances of his death, could not be learned. He left behind a wife, Joni, and two young daughters. He was 42 years old.
IN CASE YOU MISSED IT
Tala CEO: How Facebook’s Libra Cryptocurrency Can Help Companies Scale by Robert Hackett
BEFORE YOU GO
Microsoft’s antitrust “tips.” Bloomberg News examines the epic antitrust case against Microsoft two decades ago, and some of the technology giant’s missteps fighting the charges and attempting to control public perception. Today’s tech titans like Facebook, Google, Amazon, and Apple that are under fire from regulators, could learn what not to do by studying Microsoft’s blunders.
Don’t deny the obvious.
Or don’t even put up a fight about whether you have a monopoly. Microsoft, whose Windows software accounted for about 90% of the market for PC operating systems, opted to argue that the space was actually competitive. Parts of the argument included videos where Microsoft employees offered a straight-faced marketing pitch for the benefits of rival Linux programs with a tiny share of the market. The impulse is understandable — monopoly sounds like a dirty word. But U.S. antitrust law doesn’t expressly forbid having a monopoly; it outlaws doing certain things to establish, maintain or extend one.