Congressman implies Facebook’s Libra is a ‘shitcoin’

Congressman Warren Davidson really wants to talk about shitcoins.

The representative from Ohio took pains Wednesday to make that clear during a congressional hearing examining the potential ramifications of Facebook’s proposed Libra digital currency. Over the course of the hearing, Davidson highlighted all the perceived benefits of bitcoin and laid out how “shitcoin” — like, he implied, Libra — fundamentally differ.

In questioning Meltem Demirors, CoinShares’ chief strategy officer, Davidson first introduced his likely befuddled colleagues to the crypto term of art. 

“A lot of people in this space will use a phrase that you may be familiar with: ‘there’s bitcoin, and then there’s shitcoin,'” noted the congressman around the 2:49:40 mark in the below video. “Are you familiar with that phrase, and what people might mean by that?”

“I am,” replied Demirors. 

Essentially, a so-called shitcoin is an altcoin — that is, something other than bitcoin — that is perceived to be without value. Bitcoin maximalists believe every cryptocurrency that isn’t bitcoin is a
shitcoin,” while others reserve the pejorative term for truly the worst of the worst alts. 

This brings us back to Libra, and how it differs from bitcoin. Davidson emphasized that there is no central authority that can filter bitcoin transactions or unilaterally dilute its value — unlike with Facebook’s proposed digital currency. 

“All these features are different from many of the things people call colloquially ‘shitcoin,'” continued Davidson. “Because the value can be distorted by a central authority, so people do really have their assets at risk.”

Notably, Libra will most certainly be governed by a central authority — the Libra Association — which has the power to control supply. In other words, Davidson appeared to specifically frame the definition of shitcoin to include Libra. 

It’s not hard to imagine the congressman’s thoughts on the proposed digital currency, and unfortunately for Facebook they don’t appear good.