We Have More Questions Than Answers About Facebook’s Libra And The Future Apps Being Built
The world stopped when Facebook decided to reveal the white paper of its Libra project. However, as soon as everybody read it, the first impression was that there were more doubts than actual certainty about the future of the project.
Many regulators have openly criticized the project, but they are not alone. In a considerably rare move, the crypto community has agreed with regulators: yes, the project is somewhat inconsistent in some points and it seems that it may lack actual decentralization.
While many people in the community were happy to see Facebook becoming a part of the crypto world, this is far from what most of them actually expected. Libra can be good for the image of the crypto world, but it just looks way too centralized.
Another important issue is that the project talks a lot about its humanitarian aspirations and not so much about how it will work. Obviously, there is still the need to pass all the regulatory issues before the project is approved, so this may be why Facebook is still somewhat secretive about this project.
Will Libra Be Used For Criminal Activities?
Perhaps it is a cliché, but the truth is that most people were very worried that Bitcoin would be used for crime (and some still are). If Libra has the potential to even surpass Bitcoin and to become even more centralized, can it be used for crimes?
Facebook and the Libra Association want everybody to use Libra, obviously. So there seem to be some doubts about how the Libra-based projects will actually be used.
Will there be any kind of protection for the consumers? Will there be Know Your Customers to ensure that people are not using the platform for fraudulent activities?
As pointed out by some experts, Facebook did not keep the information of its customers very well, so we have our doubts about leaving money on their accounts. Digital currency theft is, unfortunately, very common, so what will Facebook do about it?
All these governance questions were not addressed by the white paper, so we can only wonder what will happen if a developer steals money from the users on the platform.
Will Libra Try To Replace Fiat?
Everybody knows that Bitcoin wants to replace fiat. So far, it hasn’t been able to, mostly because it lacks adoption. Libra will certainly not lack adoption since Facebook is already huge. So, will Libra try to achieve Bitcoin’s dream but in a way more centralized way?
Many people accuse Libra of trying to replace fiat, as it wants to be a global coin and it affirms that it wants to “help” people in countries in which they need to rely on weak fiat.
Also, not a lot was actually affirmed about how the token will maintain its allegedly stable price. The white paper affirms that fiat from developed countries and government bonds will be used as collateral, however, the controllers of the fund can buy whatever they like.
Will It Be Really Decentralized?
If you have been reading with attention, you might have noticed that a major problem looms over Libra: the company is just not decentralized.
Facebook has chosen 100 companies to be the nodes of the network. Is this decentralization? It is worse than EOS, which is repeatedly criticized for lacking decentralization. It will work just a central bank, an actually private central bank.
The value of the Libra will have a direct relationship with the ability of its managers to maintain the value of the money and the blockchain will not be validated by unknown individuals but by large institutions which were selected by a single company. This gives them too much power, especially when it will be a conflict with their interest.
Some crypto fans are not too fond of governments, but at least they were elected. Who elected Mark Zuckerberg, soon to be the world’s most powerful unelected dictator, according to CNBC’s Ran NeuNer?
While some non-crypto folks have been praising how decentralized Facebook’s Libra is, we are still calling it Facebook’s Libra, aren’t we? The truth is that decentralization is not real if people cannot be a part of the democratic process.
If anyone can create a node, then at least anyone can participate and this is why Bitcoin is way more decentralized than Libra will ever be.