Why Libra Won’t Simplify The Global Economic System.
What seemed like the best solution for a global currency, might become the worst nightmare.
As you might have heard recently, Facebook is launching what it wants to be the revolution of the financial industry, Libra.
As we have already seen with ReactJs and Go language, both supported by Facebook and Google respectively, it is inevitable to admit that Libra has a lot of potential because it is being supported by such big players.
Libra, like any other decentralized system, can lower the costs of movement of money, and bring financial services to almost anyone in the world. But unless they have a master plan, not everything that Libra Association promising is actually achievable.
We believe that people will increasingly trust decentralized forms of governance.
How Decentralized Is Libra?
Libra carries characteristics that don’t comply with the principles of blockchain and cryptocurrencies.
To become a member of Libra Association, the initial investors must spend at least $10 million. This severely reduces perceived decentralization as it centralizes the power in an elite group with the same concerns.
Libra Association will have no choice but to comply with regulatory entities, as their white paper makes it clear.
There is a belief that Libra Association will be able to freeze accounts.
“Facebook is aware of the gulf of trust between itself and the public. And that’s likely why Facebook itself is hardly mentioned anywhere in the Libra Association.”
We believe that a global currency and financial infrastructure should be designed and governed as a public good.
Don’t get me wrong, Libra will be of public usage (maybe permissioned in the future though). Therefore, it will be regulated by both the authorities and the Association.
Libra will probably launch with KYC, which will give the Association a tremendous amount of easy to trace, spending information, about every blockchain user. I will leave up to you if you believe whether Facebook is trustworthy or not.
Libra’s mission is to enable a simple global currency and financial infrastructure
Libra won’t fix the problem of having a universal coin which, by the way, its concept isn’t even real. The mass adoption of blockchain will develop in many tokens and alternative coins which literally ANYONE can create. That way, what it wanted to be the first and only global currency, will become the seed for a sea of thousands of coins.
