With the advent of blockchain technology, the financial industry has never been so impacted by a change from the status quo as the birth of the almighty bitcoin. The existing world financial institution is being threatened by this lightening fast blockchain driven new age financial structure, governments all over the world are trying their best to stifle the bitcoin, but because of the immense benefits that the technology has to offer to love it, hate it, the bitcoin has arrived and is here to stay.
For a long time, it was rumored that Facebook was coming out with its own cryptocurrency, and finally, it is no longer rumor because Facebook has launched its own cryptocurrency, the Libra.
However; what many do not know is that the Libra is not driven by the blockchain technology? What Facebook is trying to build is a global bank, it hopes to make the Libra a world currency that will be used by billions of people; it hopes to achieve this goal by structuring the technology behind the Libra such that it will have the support of numerous international institutions. If this expectation is actualized, then Facebook would have succeeded in redesigning the global banking infrastructure.
According to John deVadoss, a former General Manager at Microsoft, a computer scientist specialized in machine learning and neural networks and currently the development lead for NEO, a Seattle based IT company
“Libra is an attempt to build a global (central) bank that piggy-backs on existing central banks’ monetary policy, with the goal of taking over and eventually deprecating them.”
John deVadoss adds that
“A shift in monetary policy from public officials to private corporations has a huge impact on consumer rights and privacy. This raises serious questions around global exchange and trade.”
Calibra, that is the wallet which holds the cryptographic keys for the users of Facebook is structured to be able to move assets around for Facebook users. Experts say that the Calibra wallet is “walled in” at the moment, in other words, it is an old school-based, it is not altogether decentralized, however; with the Libra Association, Facebook can extend its reach beyond the regulated wall.
According to experts, the technology that drives the Libra is written by the ‘Move’ programming language, the Libra is not what one may call a decentralized platform, on the contrary, it is more of a distributed database which also allows the transfer of assets across Facebook users because of the distributed infrastructure inherent in the Calibra.
“It’s not much of a decentralized platform. It’s more of a distributed database. You have this distributed infrastructure to transfer assets, as indicated by its ‘Move’ programming language. But decentralization may not be the intent. They want to control this end-to-end.”
John deVadoss theorizes that Facebook may not have a desire or an intent to decentralize or to go beyond the financial scenarios:
“That is not their goal. This goal is not to build a platform, but to build a solution–one more Facebook app, or perhaps it is better to think of Libra as one more set of Facebook features.”
However; experts believe that the Libra is going to play a significant role in the crypto ecosystem.
“Libra is clearly competition for stablecoins. Bitcoin isn’t so much threatened, but stablecoins will have to ask themselves hard questions.”
“Libra provides new options for on-ramping. You can think of scenarios, where, for example, you sell your old bicycle on Facebook Marketplace—are you able to translate this to Libra directly? If so, this could accelerate mass adoption. This is good for Bitcoin and good for NEO.”
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