The centralized nature of Facebook’s Libra has been a major cause for concern for most people in the cryptocurrency community. Joseph Lubin, Founder of ConsenSys, an ethereum-based technology company and co-founder of Ethereum, said in an article published by Quartz, “Facebook’s cryptocurrency is a centralized wolf in decentralized sheep’s clothing”.
The social media behemoth unveiled the whitepaper for its digital coin, Libra, on 18th of this month. Upon this launch, there has been a mix of reactions from cryptocurrency enthusiasts, traders, investors, and government regulatory bodies.
Lubin notes that Libra whitepaper expresses ideas shared by most cryptocurrency supporters. He reiterates what this whitepaper states saying, “Sending money across the globe should be as simple and as inexpensive as sending a message on your phone.” He adds, “Financial infrastructure should be globally inclusive and governed as a public good.”
Joseph pointed out that Facebook Inc. receives little mention on the whitepaper mostly because it acknowledges the fact that the public does not have full trust in it. Facebook, however, goes ahead to ask users to trust Libra.
Cryptocurrency users will have to trust that Libra will receive strong backing from different currencies as well as government bonds. Also, Facebook will require trust from merchants that it will run responsibly.
How Pivotal is Decentralization For Libra?
In the article, Joseph noted that for Libra to gain traction amidst the sea of other cryptocurrencies, Facebook will have to fully assure the users of a smooth transition to a decentralized model.
Crypto traders and investors are more attracted to digital coins that are not governed from a single point as they believe that such coins are more resilient to market swings. He, therefore, insists that there is a dire need to decentralize the model now as compared to doing it in the future.
Lubin states, “Perhaps most importantly, it requires our trust that Libra will eventually transition to a more ‘permissionless,’ decentralized system, whereby anyone can validate the network, rather than the restrictive member evaluation criteria keeping control in the hands of the initial 28 firms.”
It’s Not All Gloom And Doom For Libra
Facebook’s huge user base may come into play in this Libra venture. In a few years to come, Libra may have at least 2 billion users. On top of that, UX designers could streamline the cryptocurrency user experience.
“In a few years’ time, there may be as many as 2 billion new users onboarded to Facebook’s Libra crypto wallet. In one fell swoop, talented UX designers could reduce the current friction of using cryptocurrency. Managing private keys, understanding ‘gas payments’ and installing crypto browser plugins could be as simple as pressing ‘send’ in WhatsApp, another Facebook-owned entity.”
More Hope For Libra
Joseph noted that Facebook made the first precise step by releasing the technical documentation and allowing access to the codebase, if Libra is to become a decentralized digital token.
Lubin went on to mention that ConsenSys’s developers had checked out the code for Libra. What they then realized was that Libra borrows many creative ideas from ethereum and other blockchain-based platforms.
This gives hope to the eager public awaiting Libra’s stellar execution and Facebook fulfilling its promise of a more decentralized model.