When it comes to privacy, Facebook can be compared to a creepy stalker who doesn’t know the boundaries. While Facebook will have every information about a person, what it still lacks is the financial transaction of every person. Enter Libra, Facebook’s ambitious plan to know every transaction taking place.
Libra project is a stable coin by Facebook to facilitate real-time cross border payments. Facebook has developed an open source blockchain to support Libra. Libra, similar to Tether, is fully backed by reserved funds. The project was rumored in 2018 and has been confirmed today.
Facebook’s idea is that the new stable coin will be used to pay for services and transfer money to one another alike. Libra project just released its whitepaper. The whitepaper talks about Facebook’s plans to launch a cross border payment service with its existing services. According to the whitepaper, the main mission of Facebook’s Libra Token is,
“Enable a simple global currency and financial infrastructure that empowers billions of people”
which is similar to their every other mission statement (Example, Facebook mission is to empower and connect 1 billion people, Free Internet: empowering billions of people by free internet). In my opinion, Facebook desperatly needs a new copywriter.
According to Facebook, Libra is “decentralized” but in reality it is semi-decentralized, that is it is controlled by a handful of corporations. The founding members of the Libra association includes,
Payments: Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa
Technology and marketplaces: Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, MercadoPago, Spotify AB, Uber Technologies, Inc.
Telecommunications: Iliad, Vodafone Group
Blockchain: Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited
Venture Capital: Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures
Nonprofit and multilateral organizations, and academic institutions: Creative Destruction Lab, Kiva, Mercy Corps, Women’s World Banking
However, the Whitepaper mentions that their ultimate goal is to become a permissionless blockchain, so that anyone can join and run the validation node. But before that Facebook and its affiliates will setup the validators to ensure monopoloy over the network. Currently. any company with a $1 billion valutation can join Libra’s affiliation.
Similar to Tether, Libra’s token creation is centralized – people exchange their dollars for an equivalent amount of Libra tokens. The new token is minted by Libra and the organization expects the people to trust them.
Facebook’s Libra is a classic example of a centralized cryptocurrency which adds no value to the blockchain space, apart from making a handful of people richer.
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