So, I’m the guy who used to talk too much about Bitcoin and crypto-currencies. I had a mining operation in my garage for several years and I was a vocal advocate until I realized how obnoxious it seemed to everyone except the blockchain-initiated. That doesn’t prevent my friends from hitting me up for crypto-currency related opinions from time-to-time, which I’m more than happy to give.
So, after a colleague at work brought up Facebook’s Libra to me, it was a natural progression to read the non-technical white paper, which I did this morning. After reading it, it was another natural progression to give my opinion, as follows. The Libra white paper reads like a solicitation for giant financial players to hop aboard, although some of the big boys already have.
The technology definitely sounds evolved: a combination of Bitcoin and Ethereum with more dynamic scalability. It is both a store of value and a smart contract platform, with open APIs helping Libra masquerade as egalitarian.
It is however designed to be tied to current central banks assets and fiat currencies. It sounds like the same old game with a different tech stack.
…it will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks.
That last phrase “stable and reputable central banks” is code for: “Hey, we are trying to play along with the current financial system, not subvert it like Bitcoin. So please don’t come after us. We’re on your side, exalted leader.”
To that end, Libra will have absolute authority over the currency they’re creating, rather than being decentralized and market-driven.
The association is the only party able to create (mint) and destroy (burn) Libra.
The Libra Association sounds like an attempt at a payment processor for the World Bank (tangent: Visa’s revenue is $56.5 million/day; Mastercard makes a paltry $34.8 million/day). I wonder who stands to gain from Libra? That’s rhetorical, of course. It’s obvious.
Founding Members… Visa, Mastercard, PayPal, eBay, Facebook/Calibra, Lyft, Spotify AB, Uber Technologies, Inc., Vodafone Group, Coinbase, Inc…
Left Out… Again
You know who’s not on that list? You. Me either, but I’m not the audience of this blog entry. And you’re not the audience of the Libra white paper. There will be no garage mining operations for Libra.
So, touting Libra in the same sentence as Bitcoin is PR, not reality. They’re barely in the same business space. Therefore, there is in reality no challenge to Bitcoin’s ever-growing niche of “woke” distributed-authority believers. Libra will however likely be able to process payments/transfers across borders by way of blockchain tech. Perhaps you will be able to use Libra to buy Bitcoin from India.
In short, other than the underlying technology, Libra really bears no resemblance to the idea behind Bitcoin. Libra is not Bitcoin in the same way a Ruble currency exchange is not a block of gold.
