Facebook Betting Big On Naive Crypto Fans
“Libra Explained”
Last week’s hottest story for crypto fans was Facebooks release on Libra, a cryptocurrency of their own which will be like a combination of Bitcoin and PayPal.
One of Facebook’s child companies, Calibra is building an open-source cryptocurrency to compete with the likes of Google Pay and WeChat but this hot news was extensively criticized by Crypto experts and Blockchain Developers for many reasons. The main accusation being, building a non-inclusive money transfer app and selling it under the pretext of decentralized cryptocurrency.
Many puritanical blockchain developers don’t consider private or permissioned blockchain network real blockchain, mainly because it’s not really a decentralized network if you are regulating who can be part of the network and who cannot be. Then it definitely hurts the fundamentals of blockchain technology. But people who build decentralized applications or any other product based on blockchain(decentralization) like me consider that for both consortiums and individual organizations private blockchains are the halfway between two completely opposite ends, centralized and decentralized authorities.
A public/permissionless decentralized network is resilient and requires consensus from the majority of the peers participating in the network to have any effect on the network. Data can be accessed by anyone who is having the internet and anyone can look at data but will not be able to recognize or understand it because of the very high level of encryption techniques used in the implementation. The anonymity of the participants is maintained and even app creators need consensus from all peers and they cannot compromise the app data after it is deployed, let it be Bitcoin, Ethereum or any other cryptocurrency based on public/permissionless network the developers or owners of the network cannot alter the data. On the other hand, private/permissioned networks provide all the features but they skip out the consensus part. Owners/authorities can form consensus without asking any peers. This is exactly what I was talking about and it is the main reason for all the hate against Libra.
All the uproar started when people first, observed the conflict between details in the white paper and that on the Calibra website. The website clearly states that a government-approved identification card will be mandatory to participate in Libra which firstly goes against Libra’s very own white paper and secondly it is a direct violation of the fundamentals of blockchain to provide anonymity to the users.
Corporates prefer private blockchain over a public blockchain because they have a certain amount of authority over the network and hence it is termed as middleware of blockchain and traditional networks. Having a private network is one thing and masquerading it as a public network is another, people are angry at this point and they have all the rights and reasons to blame corporates who blatantly lie, especially Facebook which recently had a huge scandal regarding its shady data sales.
To sum up, Libra provides a very high scale of risk and opportunities both. In my personal opinion, chances for anything good for blockchain or crypto community are slim but Facebook has a higher probability in making a fortune by fooling naive crypto fans who are definitely a large portion of their market share. But the chances for Facebook to succeed in this domain is mainly dependent on whether the government will try to regulate this thing or not, especially when many countries are against cryptocurrency and some are even against Facebook.
Facebook has always been accused of robbing user data and using it for their personal gain. The lower bound of this personal gain is just that they are using personal information for prioritizing advertisements but the upper bound could be very severe. Now imagine doing all your transactions on that very same platform’s service which is arguably not even fully decentralized. Just imagine all your transactions are being observed and recorded which can potentially end up with any third party.
To use Libra people are required to have one government-affiliated identification card and bank details, to add regular currency in exchange for libra coins and these are supposed to be extremely private data and customers require security for such data. Even if Facebook doesn’t sell out this data they will definitely have a track of all your transactions from beginning to end. Now, this is the scary part of Libra which the majority of customers will not even be aware of.
In a nutshell, Libra will use blockchain but it will be a public network hence no possibility of unbiased consensus, no anonymity and the government can track down your data. Facebook can literally look in your data and then a customer can only pray for them to be discrete. By this term, Libra is a cryptocurrency without any major customer based advantages of cryptocurrency. It’s basically a pseudo cryptocurrency built just to be like normal currency but to attract naive blind followers of blockchain and cryptocurrency.
Blockchain is anticipated as the next big thing after the steam engine, telephone, and email but the reason blockchain is considered high and mighty is because of security, anonymity, resilience and a network which is not bound to geographical boundaries, Gas price(term usually used for transaction cost in the blockchain) will be same irrespective of your class, status and your location in world. But for libra services will vary according to geographic location and in some countries, Libra will not provide any service.
Now, these crypto things look somewhat like a modern rebel of general/common people who want to defeat big centralized corporate giants. Cryptocurrency has always been under red lights from corporates and it is difficult for them to appreciate anything which has the potential to kill a complete domain.
Emails will fail — Post Offices
Internet will fail — Newspapers
TV will fail — Radio stations
Crypto is going to fail — Central banks
Bitcoin has achieved the main purpose of its existence which was to provide financial transactions not governed by anyone, can be performed between untrusted and unknown people without the chance of getting hacked or even getting looted by online predators but the problem is that Bitcoin is providing all these stuff to the dark side of the internet and to be fair it is majorly visible on almost all onion websites but Bitcoin has terribly failed to attract honest people on internet. Many people don’t understand the technology and many feel its risky. In my opinion, I think the tools to build blockchain applications are not mature enough to provide a fancy application which has the capacity to attract hogs of customers hence it is limited to the dark web.
A major consumer demographic of crypto are those who consider it an investment. Keeping all other cryptos aside Libra is clearly not an investment option, it’s just a currency just like dollars and euro, it’s market value will be dependent on your local currency, unlike other cryptos.
Blockchain is a very new technology and it is dealing with the problems which are usual for any growing modern technology, one of these issues being scalability and Ethereum is trying its best to solve scalability issue in their next upgrade with the second layer of Ethereum. When Facebook jumps in the game with an open source platform then the scope of solving these issues increases to a greater extent.
This open source platform means that any developer can create a wallet to handle transactions from Libra. Now at this point, it is said that any wallet built anywhere other than Facebook will not be needing any government-approved identification card but right now no one knows where it is going to end up, let’s just hope for good.
