The moment Facebook released the whitepaper for its planned Libra coin, social media was flooded with claims about Zuckerberg’s new drive to take over the cryptocurrency market, with some even calling it a Bitcoin killer. However, looking at the actual details of the plan, it has little to do with cryptocurrency and is in fact more of a threat to government fiat.
Libra Wants to Be a New Global Fiat Currency, Not a Cryptocurrency
Without getting into deep technical arguments about what is a real blockchain, it is easy to see that Libra will hold little appeal to cryptocurrency purists as it is neither decentralized nor permissionless. This is plainly obvious to the people behind Libra, as the whitepaper’s writers take considerable efforts to try and obscure these two critical issues with the project.
In order to claim that its new venture is decentralized, Facebook has surrounded itself with other companies and organizations that will serve as founding members of the association governing Libra and be the network’s first validator nodes when it launches. These will be the players who get to decide how the project is run as well as who can join it later on. Imagine a politician handpicking all the members of some important committee and then saying its decisions will be totally independent. It seems to be stretching credulity.
As for being permissionless, Facebook is not even trying to hide that Libra isn’t going to be built this way. Instead, it just pays lip service to the idea and states its aspirations for a “journey toward building a permissionless system.” It only plans to begin this within five years of the public launch of the ecosystem,