Understanding Libra, the Facebook Cryptocurrency
Is Facebook’s Libra good, bad, or simply an indicator of what the future holds?
Blockchain technologies have proof their impact and increasing interest in the population, surviving in the ecosystem and rising adoption from multi-stakeholders in spite of bad use and practice of those gray zones that have not been patched, characteristic of disruptive models.
Facebook, has resumed many unsolved issues and accepted by the majority and has proposed a new blockchain ecosystem, that of course, is extremely debatable, primarily due to one of the principles of blockchain, decentralized. Its mission proposes a simple global currency and financial infrastructure that empowers billions of people. To elaborate on its ecosystem I will divide into three parts:
Advisory Board
The Libra Advisory Board is comprised of Social Impact Partners SIP, which are organizations for educational institutions that have a social impact. Each organization has to pay an entry ticket of $ 10 million dollars and this amount go to the Libra Reserve. Every organization who participate in the Libra blockchain must interact with the Libra Core Software.
In this topic, the question is, who decides who become a SIP? What are the metrics on social impact to select one? Or it is just an entry ticket payment capacity?
Libra Network
The second part of the Libra Ecosystem is the Libra Network, Permission Consortium Blockchain Network proposed by Facebook, for security and regulatory business all traffic in the network is directed by a group of validator nodes which initially comprise by the founder members.
Within the Libra network, users are represented very similarly to the way that they are in Ethereum and Bitcoin (Hexadecimals addresses) and one important difference is that there will be no third-party smart contract in the Libra Network.
Stablecoin & Libra Reserve
They present a mechanism to deal with money laundry and bad usage of these payment mechanisms, which consist of local intermediaries that would serve as resellers of these tokens, but neither the mechanism on how it will operate nor the way they will deal with local policies are yet clear.
Conclusions
Around the Libra Ecosystem are important doubts that are currently being debated and have not an answer, some of them are:
Moving a characteristic of the blockchain (decentralization) from the white to the gray zone (from the clear to the unclear) is the best way to foster the adoption of technology? Because the propose is to move from complete decentralization to centralization of power by privileges entities that will know what’s best for its members. Isn’t a Dejavu of current society?.
How will the coin be stable and how the money will move from a local transaction to the blockchain reserve? Because even though partnerships and anti-laundry mechanism could be well elaborated and signed, the deal would need to be done at some point with governments, and currently, there are many countries that don’t want this kind of open technologies, cause its procedures and corruption implications, so they won’t put the intermediary institutions between a rock and a hard place?
To conclude, nothing is written in stone and we will see in the near future how these questions are solved.
Disclaimer: The views expressed by the author above do not necessarily represent the views of the Ethereum Foundation.
