Ever since Facebook announced its upcoming cryptocurrency,tech geeks have been curious to get their hands on the whitepaper to know moreabout this thrilling project. Recently, Facebook ended the anxiety by rollingout a 29 pager, explicitly showing off the talent onboard and making anelectrifying entry in the crypto niche.
Of course, the paper also aims at explaining the protocolbehind the venture and discusses the goal of its launch as well, whichevidently favors low volatility and ability to offer extreme efficiency whileconnecting billions of people.
It is worth mentioning that the whitepaper loudly talks aboutdecentralization and in order to defend the stance, Facebook has established anew organization, the Libra Association. The core members of this organizationwill have certain privileges (e.g. tokens) to govern the network and reachconsensus.
I know you might have developed some concerns after readingthe last paragraph, but please be advised that the blockchain technical lead atFacebook clarified that with the passage of time, the decision making powerwill gradually shift from a few selected members to the entire network. So inthe long run, it is definitely going to be an ‘utterly decentralized’ project.
After the crypto hype in 2017, we saw many ICOs and otherventures covering a variety of use cases in order to serve a larger audience.However, as Libra’s whitepaper mentions, this cryptocurrency is specificallyaimed at making financial transactions more efficient. It also goes on topraise Facebook’s efforts to prosper the science behind decentralizedtechnologies.
Of course, the social media giant is after ‘something big’and therefore, it has announced a programming language, called Move, tointeract (programmatically) with the chain. In other words, you need to learnthis language in order to write smart contracts on Libra’s blockchain.
The ‘mingling’
It is worth mentioning that Facebook has not created a‘unique’ solution. In fact, they are quite vocal about it and their actionsalso prove that the plan is to use the most robust concepts and procedures froma variety of existing chains.
BTC’s anonymity
One of the major motives for rolling out the BTC was toanonymize the real World identities of its users. Your public and private keyshappen to be the only references pointing towards your wallet. Libra followspretty much the same procedure and hence, allows its participants to havemultiple accounts as well. Therefore, even if you run 10 accounts on Libra’sblockchain, there will be no connection between them since your ‘real’ ID ishidden and every wallet will operate as a standalone instance.
ETH’s programmable currency
At various points, the whitepaper advocates about the extentof liberty provided to the developers and other entrepreneurs who want to buildtheir use cases on top of Libra. It also allows you to create a replica of theblockchain, without voting permissions, of course. This concept is exclusivelyderived from Ethereum and the creators were also inclined towards introducing afee (aka gas) for the execution of transactions. This is vital for running andscaling the blockchain.
However, it’s not entirely the same and Libra has made twocrucial distinctions:
- They have not fully revealed the list of features orrather ‘extent of customization’ that the developers can leverage on theplatform. It implies that the Libra Association somehow wants to restrict thecommunity in its initial stages
- A smart contract can be pointed towards any set ofresources or rather assets on the blockchain. It makes things easier foreveryone and facilitates collaboration
ETH’s Proof of Stake
Libra’s whitepaper also mentions that in the long run,memberships will be awarded after considering stakes of the users. It also goeson to discourage the approach used by Bitcoin’s PoW algorithm which is highlyinefficient in terms of energy consumption and performance.
Hyperledger’s permissioned nature
In the last year, we have seen how rapidly Hyperledger’sacceptance has advanced in the industry and the primary marketing point forthem is the chain’s permissioned nature. It is quite evident that in order topropel things in the beginning, Libra is also keen to adopt such a model. Theinitial consensus algorithm would take input from multiple organizationsrunning full nodes on the network. As soon as the voting process ends, a leaderwill be selected at random to count the votes and add the new block.
It is worth mentioning that in its early days, Libra is more interested to ‘handpick’ the trusted members for reaching a consensus, rather than implementing a democratic procedure. The whitepaper states that since all of the founding members of the association happen to be trusted names in the industry (e.g. eBay, Lyft, Mastercard, etc.) it is highly unlikely that they would act ‘unethically.’
Tezos’s on-chain governance
Since Libra’s founding members possess respective investmenttokens, they happen to be the only ones eligible to participate in any votingevent. As you must have understood by now, only they can implement a change oradd new members in the foundation. However, it must be noted that even thoughthis governance model will be coded initially, the foundation plans to make itmore generic in the long run.
BNB’s burning
In 2018, we saw that the tokens which burnt a specificcirculating supply became incredibly popular and Binance’s native coin happensto be one of them.
However, it is worth noticing that BINANCE used it as astrategy to surge the value of its coin, but Libra does not plan to burn thetokens for this purpose. In fact, they would do this for catering to the shiftsin reserves.
Conclusion
From what we have discussed in the light of Libra’swhitepaper, it is quite evident that the venture is aimed at facilitating thepotential users who are either underbanked or are affected by the ‘greedy’nature of centralized banks.
It seems quite a decent move that the core team decided tostrengthen the existing models in order to yield the best results for the endconsumers. It is no secret that cryptocurrencies, like the BTC, allowed peopleto be a part of International transactions and enjoy efficiency at practically‘zero’ cost. Given the influence of Facebook, the launch of Libra may open aplethora of doors and eventually, haunt the banking industry as well.
However, in order to hit that level, the association needs to work tirelessly, as there are still a couple of undecided matters. For instance, the whitepaper accepts that when the network scales up in the near future, the storage would become a huge concern. However, it has not pointed out a strategy for storing the data.
Featured image via BigStock.
