So the crypto world is abuzz this morning as we get some insight into Facebook’s crypto project, called Libra.
Here’s the generic whitepaper:
And it’s an interesting read.
Basically what they are creating is a hybrid between Ethereum (ETH), Ripple (XRP), and Tether (USDT) with default integration into Facebook, WhatsApp, Instagram, and whatever else is in the Facebook ecosystem.
Only approved parties will be able to run nodes, and these are all large institutions.
The coin will be backed by assets in order to give Libra value. So this is where the USDT inspiration comes in. I have to give them credit here in that I have a lot more belief in the ability of say, MasterCard or Visa, to run an investment portfolio of cash and near-cash equivalents than I do the guys who run Tether.
Supposedly the interest on the account reserves will help pay the node operators and keep transaction costs low. I’ve seen some popular articles say that transactions are going to be free, and that is not the case. There are gas charges built into the blockchain.
Accounts are going to be
And that’s where I really start to get skeptical. Because we have this from the paper:
Some projects have also aimed to disrupt the existing system and bypass regulation as opposed to innovating on compliance and regulatory fronts to improve the effectiveness of anti-money laundering. We believe that collaborating and innovating with the ﬁnancial sector, including regulators and experts across a variety of industries, is the only way to ensure that a sustainable, secure, and trusted framework underpins this new system. And this approach can deliver a giant leap forward toward a lower-cost, more accessible, and more connected global ﬁnancial systemhttps://www.scribd.com/document/413733914/LibraWhitePaper-en-US
So make no mistake about it. This is going to be a full KYC system. Other users might not know who is behind an account, but the governments certainly will.
Libra is not really a cryptocurrency in the sense of an alternative to fiat. It’s a payments blockchain technology run by financial institutions (Ripple) using fiat instrument backing (Tether) that hopes to bring the 1.7 billion “unbanked” into the financial system. The overall blockchain model functions much like Ethereum and they hope that smart contracts will be built on top of the blockchain (read
Oh, and side bonus, you’ll be able to tip your favorite Insta thot to send you nudes.
Also, if you’re curious, the technical paper is here: https://developers.libra.org/docs/assets/papers/the-libra-blockchain.pdf