Facebook’s Libra cryptocurrency: Experts break down privacy issues, threat to Bitcoin, and more

Now that Facebook, together with an army of partners, has entered the crypto space with Libra, the blockchain community is as polarized as ever. Some are merely brushing it off as just another coin; others think it will crush the major cryptocurrencies of today, and then there’s everyone in between. 

Since the announcement, I’ve spoken to some experts and tracked others’ comments on Twitter. Here’s what they had to say about Libra. 

On Libra’s blockchain tech

Director ofTendermint LabsZaki Manian, via a phone interview:  “Facebook has had the resources to start from scratch, and it’s not surprising that they’ve used a modern solution. They have a lot of very competent people working on this.” 

Blockchain researcherPeter Todd, onTwitter: “…basing your distributed database on a blockchain is best practice these days, as it makes auditability much easier internally. Especially when you’re running the database as a partnership.  Libra is doing that obvious thing right.”

CasaCTO Jameson Lopp, onMedium:“‘The Libra Blockchain’ is not actually a blockchain.” 

“Sounds like Facebook has not solved any of the massive problems that Ethereum has been working on for years.”

“I’m skeptical that developers will be able to run any technically valid app they can dream of on this platform.”

ShapeShiftCEO Erik Voorhees, onTwitter: “Libra deserves nuanced analysis, it is neither ‘great’ nor ‘horrendous.’ This brings up an important point too often missing in discussions of crypto: digital assets and blockchains have *many* attributes, optimizing for certain ones can detract from others, and that’s okay.”

“Libra is built on an actual blockchain (based on HotStuff BFT, similar but not identical to, and compatible with, Cosmos’ Tendermint protocol). Much/most of the important components are open-source and can be built on in a permissionless way.”

On Libra’s decentralization (or lack thereof)

Decredco-founder Jake Yocom-Piatt, via an e-mailed statement: “Libra goes against the central ideological underpinning of cryptocurrency — it’s not decentralized. Facebook has already garnered a reputation for questionable privacy practices. A trackable cryptocurrency from a ‘free’ network with a history of selling consumer data could just as easily track financial decision-making and sell it to third parties.”

Blockstream CSO Samson Mow, onTwitter: “Looked at the Libra white paper. It’s not very interesting. Just another centralized coin. You can’t start out centralized and ‘become’ decentralized.”