Thoughts on Libra
Summarizing my thoughts about Libra within the Devcon V Scholar Program
The announcement of Libra made many people who were outside the crypto environment begin to be interested, although Libra does not seem to be consistent with the decentralized spirit.
Libra is the name of the cryptocurrency announced by facebook. This cryptocurrency seeks to allow the exchange of value between the users of the Facebook ecosystem.
Libra is developed in technology with blockchain-based features, with some differences. First, the structure used is a unique block with an initial status that is updated by groups of transactions. The network nodes process the transactions and are responsible for the creation and destruction of Libra coins. Cryptographic techniques (public key and private key) will be used for user accounts, but will not be used to generate blocks. On the other hand, the accounts of the users verified in the social networks will be able to carry out transactions through the Calibra wallet (Facebook property). Then, Facebook can link each wallet of the Libra network with the identity of a real person and thus the concept of anonymity disappears. These differences, make question the categorization of Libra as a traditional Blockchain.
Libra also has its own programming language: MOVE. Libra allows the programming of smart contracts and will allow each startup to develop business logic in Libra.
Libra will be controlled by a consortium of Fintech companies, so the concept of decentralized blockchain becomes centralized into a few actors. Libra will have its value backed in different currencies to make its value stable. Additionally, the global reach of Facebook will allow the free flow of money. This feature affects the control of money for a single state. This last characteristic is the main reason why the current states and traditional banks will try to prevent technology companies from becoming banks (governments don’t have issues with fin-tech to act like banks, as long as they have control over the local currency). Or they will try to control them in the strictest possible ways to ensure that their participation doesn’t eliminate them. The disadvantage of Libra being centralized in an association of companies is that states and banks have who to attack with regulations. This is impossible to exercise on Bitcoin and Ethereum.
Digital money has arrived since 2009 ;)...
But Facebook has the potential to update the traditional money system and make it reachable by everyone. Above all, for those who are not interested in learning the technical details of Bitcoin for greater security. Facebook has served as a good promoter of blockchain technology. In the near future, two different digital money systems will coexist. A centralized system, very similar to that proposed by Facebook, perhaps with greater participation from the states and traditional banks. On the other hand, the decentralized system we know with Bitcoin.
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Disclaimer: The views expressed by the author above do not necessarily represent the views of the Ethereum Foundation.
