Upon the launch of the highly anticipated Facebook Libra, which was unveiled yesterday, the entire cryptocurrency space has been left in a state of complete chaos as cryptocurrency users continue to air their numerous opinions on the latest digital currency.
While the entire public is eagerly awaiting the future performance of Libra, traders and investors are paying more attention to what some consider a “major problem” with the coin, which stems from its proposed intrinsic value.
A quick look at Libra’s whitepaper reveals what traders consider a “decentralized facade”, as the structure of Libra may exhibit a few attractive decentralized qualities, it goes on to maintain its position in the world of centralization, which “goes against the original idea of cryptocurrency as seen presented by other cryptocurrencies such as Bitcoin and Ethereum”.
One of the most recognized examples of what is considered as the “decentralized facade” is evident in the structure of Libra’s blockchain. Despite an assured presence of a network of nodes, Libra’s blockchain restricts node accessibility for non-members of the Libra association.
Not only is this a big difference between Libra and the likes of Bitcoin and Ethereum, it fuels significant criticism and uncertainty amongst the cryptocurrency community being that it is still in its early infancy.
Furthermore, the current members of the Libra association which includes Stripe, MasterCard, Visa, and 25 more associates have very little inclusion of any cryptocurrency related-firm and even goes on to state that the possibilities of an external user running its node will be considered over a period of five years.
The Libra Association
The association of Libra also makes up the authorized lists of resellers which poses as a “regulatory forum”, which once again opposes the intent of decentralization. Whenever a transaction is made in the aspect of exchanging Libra for another fiat currency, it is expected that the associate bodies place an order for an equal amount of the exact figure exchanged through fiat currencies. This goes on to birth a level of stiffness, such that upcoming individual financial firms must work hand in hand with a permitted reseller in order for Libra withdrawals.
Although these factors are drawing in more and more criticism, Zhao Changpeng of Binance is rather focused on the level of influence the US will have over the world, with the presence of Libra. “Countries should encourage their tech gains to issues their own crypto token”, he tweeted.